A housing registration company may require a notarized power of attorney from a third-party buyer

In a new judgment, the District Court held that a housing registration company that has not yet registered the condominium must obtain a notarized power of attorney from anyone buying an apartment from the original purchaser.

The claim was brought by a person who had purchased an apartment from a company that developed a residential project and wished to sell it to Amidar. Since the subdivision had not yet been registered and his ownership rights in the apartment were still unregistered, he received instructions from the housing registration company on transferring his rights to a third-party buyer. These instructions stated, among other things, that the third-party buyer must provide the company with a notarized power of attorney, enabling it to carry out the registration procedures.

The claimant argued that Amidar refused to sign a notarized power of attorney because it acted for the Ministry of Housing, which itself did not agree to sign one. In its defense, the housing registration company argued that the requirement arose both from the apartment sale agreement and from the law.

The court dismissed the claim and ordered the claimant to pay costs. The judgment explains that a “housing registration company” is effectively any development company that contracts with state authorities, usually through a development agreement, under which it assumes full responsibility for registering the land, the condominium and the apartments in the heirs' names. The term may also be used in relation to privately owned land. The court held that the company was a housing registration company and owed registration obligations to a third-party buyer as well. Consequently, to enable the company to fulfill those obligations, the third-party buyer must provide a notarized power of attorney under section 20(a) of the Notaries Law, which provides that a power of attorney for a real estate transaction is invalid unless drawn up or authenticated by a notary. The exception is section 91 of the Israel Bar Association Law: a power of attorney given to an attorney does not require notarization.

In conclusion, the court held that, given the importance of registration, the legislative purpose, the duties imposed on the housing registration company and the other applicable legal provisions, the company may generally require a notarized power of attorney from the third-party buyer, and that this requirement is reasonable.

(Civil Case 9254-03-23)