Executive power of attorney

Executive power of attorney / Durchführungsvollmacht

February 09, 2023

The granting of executive powers in notarial deeds is common practice. It authorises the notary's employees to carry out acts of a formal or substantive nature. It is possible to make, amend or withdraw declarations to the Land Registry or the Registry Court, or to obtain authorisations, certificates, attestations and declarations. In particular, in the case of the sale of a property, the employees should be empowered to carry out all actions necessary for the execution of the contract. There is a practical need for this instrument, as otherwise the notary would regularly have to summon all parties to the contract to his office in order to record changes. In this way, the procedure can be completed more quickly and easily, objections from the Land Registry can be resolved and errors can be corrected. Power of attorney may also be granted to the notary himself, known as power of execution. It should be noted that acts performed on the basis of the powers of attorney granted constitute "self-dealing" pursuant to Section 181 of the German Civil Code (BGB), which is generally invalid. An exception to this rule must therefore be expressly stipulated in the agreement.

The scope of the power of attorney depends on the individual case. It is often formulated in such a way that it is limited to "useful acts necessary for the execution of the contract of sale". In any case, it is unobjectionable if it is granted to employees for execution, e.g. to remove procedural obstacles to registration. Caution should be exercised when making substantive declarations. For example, a declaration of transfer after completion is permissible. However, it is not permissible to create a mortgage or to change the purchase price. In the case of consumer contracts, Section 17a (2a) sentence 1 of the Beurkundungsgesetz (German Notarisation Act) must be observed, according to which declarations must always be made in person. For the protection of the contracting parties, the power of attorney may be limited in time until the transfer of ownership in the land register.