Power of Attorney for Israeli Real Estate: When and How to Use It
You've found the perfect property in Israel, the contract is ready to sign, but there's one problem: you're in New York and the closing is scheduled for next week in Jerusalem. What do you do?
This is where a Power of Attorney (Yiפuy Koach in Hebrew) becomes essential. It's a legal document that allows you to designate someone else—typically your Israeli lawyer—to act on your behalf for the real estate transaction.
For American buyers purchasing Israeli property from abroad, understanding how Power of Attorney works is critical. Used correctly, it's an incredibly useful tool. Used incorrectly or carelessly, it can create serious problems.
What is a Power of Attorney?
A Power of Attorney (POA) is a legal document that grants another person (called your "attorney-in-fact" or "agent") the authority to perform specific actions on your behalf. In the context of Israeli real estate, this typically means authorizing someone to:
- Sign the purchase contract
- Sign mortgage documents
- Make payments
- Represent you at closing
- Sign documents for the Tabu (Land Registry) transfer
Think of it as temporarily giving someone your legal signature for very specific, defined purposes.
Types of Power of Attorney for Israeli Real Estate
There are two main types of POA, and understanding the difference is crucial:
1. General Power of Attorney (Yipuy Koach Klali)
This grants broad authority to your agent to act on your behalf for a wide range of matters. While this sounds convenient, it's actually quite risky for real estate transactions because it gives your agent extensive power without specific limitations.
- When to avoid it: For real estate transactions, a general POA is almost never recommended. It gives your agent too much discretion and could theoretically allow them to make decisions you wouldn't approve of.
2. Limited (Specific) Power of Attorney (Yipuy Koach Mezumtzam)
This grants authority only for specific, clearly defined actions related to a particular property transaction. This is the right tool for real estate purchases.