Special power of attorney vs. general power of attorney in the Philippines

What a power of attorney is

Under the Civil Code, agency is a contract where one person, the agent, agrees to do something on behalf of another, the principal, with the principal's consent or authority (Art. 1868). A power of attorney is the document that sets out that authority, and the agent is often called the attorney-in-fact.

The wording matters because the agent must act within the authority given (Art. 1881). A contract made in your name without authority, or beyond it, is unenforceable unless you ratify it (Arts. 1317 and 1403).

General vs. special power: the legal difference

An agency is either general, covering all of the principal's business, or special, covering one or more specific transactions (Art. 1876).

Under Article 1877, a power written in general terms covers only acts of administration, even if it says you withhold no power, lets the agent do whatever the agent considers appropriate, or grants general and unlimited management. Writing "full powers" into a general power does not let the agent sell your property.

Article 1878 lists the acts that need a special power of attorney (SPA). The ones people run into most often are:

• Any contract that transfers or acquires ownership of real property, such as selling, buying, or donating a house or lot (Art. 1878(5))
• Creating or conveying real rights over real property, such as a mortgage (Art. 1878(12))
• Leasing real property to someone for more than one year (Art. 1878(8))
• Lending or borrowing money, unless borrowing is urgent and indispensable to preserve things under administration (Art. 1878(7))
• Making gifts, except customary ones for charity or to employees in the business the agent manages (Art. 1878(6))
• Making payments that are not usually considered acts of administration (Art. 1878(1))
• Compromising, submitting a dispute to arbitration, giving up the right to appeal, or waiving an obligation for free (Art. 1878(3) and (4))
• Binding you as a guarantor or surety, or in a partnership (Art. 1878(10) and (11))
• Accepting or repudiating an inheritance (Art. 1878(13)), and any other act of strict dominion (Art. 1878(15))

Selling land or a house through an agent

When land or any interest in land is sold through an agent, the agent's authority must be in writing; otherwise, the sale is void (Art. 1874). In a 2023 decision, the Supreme Court repeated that a power to sell real estate must state that power in clear and unmistakable language (G.R. No. 217111).

Even a special power is read strictly: a special power to sell does not include the power to mortgage, and a special power to mortgage does not include the power to sell (Art. 1879). Name each act you want to allow.

If you are married, the Family Code gives spouses joint administration of community or conjugal property and does not allow a disposition or encumbrance of it without the other spouse's written consent or court authority (Arts. 96 and 124). Talk to a lawyer before a land sale, especially if the property is inherited, co-owned, or disputed.

Which one to use in common situations

Banks, government offices, and buyers set their own requirements and may ask to see the power of attorney before dealing with your agent (Art. 1902). They may want their own form or an SPA naming the exact account or transaction. Ask before you sign. As a general guide:

• Selling a house or lot: a notarized SPA that identifies the property by its title and location and expressly authorizes the sale.
• Selling a car: a sale transfers ownership, which goes beyond administration, so use an SPA that identifies the vehicle and authorizes the sale. Check the LTO's current requirements.
• Bank transactions: borrowing, lending, and payments outside ordinary administration need a special power (Art. 1878). For routine banking, follow the bank's own rules.
• Claiming documents or items: an authorization letter may be enough if the office accepts one.
• Processing government papers: ask the agency what authority and IDs your representative needs.
• Managing rentals while you are abroad: a general power can cover ordinary management such as collecting rent, paying bills, and arranging repairs, but a lease of more than one year, a sale, or a mortgage needs a special power.

Authorization letter or SPA?

An authorization letter is a short, usually unnotarized letter letting someone run a limited errand for you, such as picking up a document. The Civil Code allows agency without a special form unless the law requires one (Art. 1869), so a letter can work for simple tasks when the office accepts it.

It is the wrong tool for the acts listed in Article 1878; for those, sign a special power that spells out the act. A sale of land needs written authority (Art. 1874), and a power for an act that must appear in a public document must itself appear in one (Art. 1358). A document acknowledged before a notary public is a public document (Rules of Evidence, Rule 132, Sec. 19).

Notarizing your SPA, in the Philippines or abroad

A power of attorney is notarized by acknowledgment: you appear in person before the notary with the complete document, are identified, and declare you signed it voluntarily (2004 Rules on Notarial Practice, Rule II, Sec. 1). The notary may not notarize if you are not personally present or not identified through competent evidence of identity, such as a current official ID bearing your photo and signature (Rule II, Sec. 12; Rule IV, Sec. 2(b)).

If you are abroad, you can have the SPA acknowledged before a consular officer at a Philippine embassy or consulate; the Philippine Consulate General in Houston, for example, said it would continue doing so after the Apostille Convention took effect. Or you can have it notarized under local law and then apostilled by that country's competent authority, since the Convention covers notarial acts (Apostille Convention, Arts. 1 and 3).

The Convention took effect for the Philippines on 14 May 2019. According to the DFA, public documents from member countries no longer need authentication by a Philippine embassy or consulate once apostilled, while documents from non-member countries still do. The DFA's 2019 advisory excluded Austria, Finland, Germany, and Greece at the time, so check current rules with the embassy or consulate that covers you and ask the recipient in the Philippines which route it accepts.

How a power of attorney ends

You can revoke a power of attorney at will and require the agent to return the document (Art. 1920). Appointing a new agent for the same business revokes the old one once the former agent is notified (Art. 1923), and an SPA given to another agent revokes a general power as to that matter (Art. 1926). Some agencies cannot be revoked at will, such as one a bilateral contract depends on (Art. 1927).

Tell everyone who has a copy. If the agency was for contracting with specified persons, revocation does not prejudice them if they were not notified (Art. 1921). For a general power, revocation does not prejudice third persons who acted in good faith without knowing of it, and notice in a newspaper of general circulation is a sufficient warning (Art. 1922).

Death generally ends the agency, with narrow exceptions: an agency constituted in the common interest of the principal and agent, or in the interest of a third person who has accepted the stipulation in his or her favor, continues (Art. 1930), and acts of an agent who did not know of the death remain valid as to third persons in good faith (Art. 1931). Talk to a lawyer if the principal has died or may no longer be of sound mind.

Article 1919 lists these causes of extinguishment:

• Revocation by the principal
• Withdrawal of the agent
• Death, civil interdiction, insanity, or insolvency of the principal or the agent
• Dissolution of the firm or corporation that gave or accepted the agency
• Accomplishment of the agency's object or purpose
• Expiration of the period for which the agency was constituted

Common questions