Can I buy the house if I have POA?

A fellow caregiver asked...

My fiancee died a little over two years ago. His mother has been in ill health for over two years. She has been in and out of nursing homes and hospitals. She asked me to be her POA health care agent along with her niece, who also holds the Durable POA, and she now resides out of state with her niece. The niece wants to sell the aunt's house because it is empty and in need of repair. Would it be a conflict of interest if I, as the health care agent POA, purchased the house? How could this be done legally?

Expert Answer

You can legally buy a house when you are the owner's POA health care agent"”if you pay the fair market price for the house. As agent, you have a duty of loyalty to the principal"”here, your former fiancee's mother. That loyalty naturally means that you cannot take advantage of her by buying the house at a discounted, below-market price. Also, if there is a specific provision in the POA health care document that prohibits you from buying any of the principal's property, that provision would settle things. But there rarely is such a provision in a POA for health care. So, if you pay a fair price for the house, you are OK.

To be safe, you should document what is a fair-market price for the house. Obtaining an appraisal from a reputable realtor is the simplest way to do this.

I cannot tell if the mother is currently legally competent to sell the house to you. If she is competent, she can sell you the house directly. If she is not competent, her niece would have to make the sale"”if the niece has authority to do so under the (financial) Durable POA. You would need to examine the (financial) Durable POA document. In some (financial) Durable POAs, the agent is expressly prohibited from selling the principal's home.