The Attorney Signing the Sale Was Married to the Buyer

The situation

The closing was scheduled for the Tuesday after the civic holiday long weekend, and by the Thursday before it, the file was frozen. Shira, an air traffic controller who owned a three-unit rental property in Napanee, was recovering from surgery out of province and had signed a continuing power of attorney for property naming her sister Niloufar before she left. Niloufar had listed the property, accepted an offer, and was set to sign the closing documents on Shira's behalf, as the power of attorney permitted her to do. Shira had chosen Niloufar specifically because she trusted her more than anyone else to make sensible decisions about the units and the tenants while she was away and unreachable for stretches at a time.

The buyer was Azadeh, a professional engineer who had made a strong, clean offer on the triplex roughly three months earlier. Nobody on Shira's side had flagged a problem through the listing, the offer, or the conditional period, and Niloufar had handled the negotiations competently, fielding two lower offers before accepting Azadeh's. The issue surfaced only when the buyer's lawyer, preparing the closing package during the long weekend, noticed that Azadeh and Niloufar shared a surname and asked a direct question: was the attorney signing this sale related to the purchaser.

She was. Niloufar and Azadeh were married. Niloufar, acting under a power of attorney meant to manage Shira's property while Shira recovered, was also the spouse of the person buying it. Nothing in the file disclosed that relationship, not out of any intent to hide it, but because nobody involved, including Niloufar herself, had thought to raise it as something the buyer's lawyer would need to know. The buyer's lawyer would not release funds or close on schedule without an independent legal opinion confirming the sale was fair to Shira and that Niloufar had not used her authority to benefit her own household.

Shira called our office from her recovery bed two days before the scheduled closing, with the long weekend sitting directly in the middle of whatever time was left. She had trusted her sister completely and had not known Niloufar and Azadeh's relationship would matter to the sale at all, and her first question to us was whether her sister was now in some kind of legal trouble, a worry we had to address before we could even get into the closing mechanics.

What was actually at stake

A power of attorney for property gives the named attorney real legal authority to act, including signing a sale of real estate, but that authority comes with a duty to act in the interests of the person who granted it, not the attorney's own. When an attorney is on both sides of a transaction in substance, even through a spouse rather than personally, the risk is that the terms of the deal favour the attorney's household over the person who granted the power. That risk exists whether or not anything improper actually happened, which is why the buyer's lawyer was right to stop and ask the question rather than close and hope. A conflict of interest is a structural problem, not an accusation, and treating it that way from the outset kept the conversation with Niloufar calm rather than defensive.

What was actually at stake for Shira was not just this closing date. If the sale went through without addressing the conflict and it later came out that Niloufar had sold the property to her own spouse using Shira's power of attorney, Shira could have faced a real dispute over whether the sale price reflected fair market value, whether she had validly consented to a transaction she did not fully understand the shape of, and whether the power of attorney itself had been used properly. Undoing a completed real estate closing months later is far harder and more costly than pausing one before it happens, and it can drag in tenants, mortgage discharge timing, and land transfer tax filings that are much simpler to unwind before they are finalized than after.

The purchase price itself was not obviously unfair on its face. It sat within the range comparable properties in the area had sold for, and Azadeh's financing was in order. The concern was not that the number looked wrong; it was that nobody independent of the family relationship had confirmed it, and a power of attorney does not get to skip that confirmation just because the underlying terms happen to look reasonable. A reasonable-looking price agreed between spouses, one of whom is acting as attorney for the seller, is still a transaction that needs an outside check, because the appearance of fairness is not the same as a confirmed, independent fairness assessment.

There was also a narrower, practical question: did the power of attorney document itself permit Niloufar to enter a transaction where she had a personal interest, or did it require Shira's specific authorization for exactly this kind of situation. Some powers of attorney address conflicts of interest directly; many do not, leaving the general duty of loyalty as the only guide, and Shira's document, like most standard forms, fell into the second category.

What we did

1. Reviewed the power of attorney document itself first, to determine whether it contained any restriction on Niloufar transacting with a related party, since that single question would have resolved the matter immediately either way rather than requiring a broader fairness review. It was a standard continuing power of attorney with no conflict-of-interest clause at all, which told us within the hour that the sale could still proceed, but only with an independent check standing in for the safeguard the document did not provide.
2. Reached Shira directly by phone that same afternoon rather than working through her sister, reading her the relevant terms of the sale in plain language and confirming, in her own words and while she was lucid and not medicated, that she understood who the buyer was and wanted the sale to proceed on those terms. Speaking with Shira personally, rather than accepting Niloufar's account of her wishes secondhand, was the only way to be sure the consent on file was genuinely her own.
3. Obtained an independent property valuation opinion on an expedited basis, using a local appraiser who had no connection to either family, to confirm the agreed price sat within a fair market range rather than relying on comparable listings alone, since an opinion from someone with no stake in the outcome carried far more weight with the buyer's lawyer than anything either family member could offer.
4. Documented Shira's informed, contemporaneous consent in writing, through a short signed letter separate from the power of attorney itself, setting out that she knew Niloufar's spouse was the buyer and approved the sale on those specific terms. That record mattered because the power of attorney only proved general authority to sell; it said nothing about this particular conflict, so a record tied to this transaction specifically was the only thing that would stand up regardless of what either sister later recalled about the phone conversation.
5. Prepared a short independent legal opinion for the buyer's lawyer, addressing the conflict directly rather than avoiding it, and confirming that the sale price was fair, that Shira had given informed consent, and that nothing in the power of attorney barred the transaction, so the buyer's side had a professional basis to release funds rather than simply taking Niloufar's word for it.
6. Coordinated with the buyer's lawyer to compress the remaining steps into the two business days available around the long weekend, since both sides wanted the sale to close and neither side wanted a rushed process to create new risk. We agreed on a shared checklist covering the valuation, the consent letter, and the legal opinion, with a deadline against each item, so nothing about the file was left informal or open to being discovered at the last minute a second time.
7. Confirmed the rental units' tenancies and existing leases transferred cleanly, a routine step on any income property sale that still needed doing despite the more urgent conflict issue, checking notices to tenants, the status of security deposits, and that no rent was in arrears. Handling this in parallel meant the closing package would be complete the moment the conflict was resolved, rather than surfacing a second, unrelated delay just as the first one was finally cleared.
8. Closed the transaction two days later than originally scheduled, coordinating the mortgage discharge, land transfer tax filing, and disbursement of funds so the short delay did not cascade into further complications for Shira, who was recovering out of province and had specified in writing where her share of the proceeds should be sent. That brief delay was far preferable to closing on the original date without the review in place, or to walking away entirely from a sale Shira genuinely wanted to complete.
9. Advised Shira on updating the power of attorney going forward, recommending she add an explicit provision addressing related-party transactions if she planned to keep Niloufar as her attorney for any future dealings, since the general duty of loyalty an attorney owes does not by itself flag a conflict for a future buyer's lawyer to catch in advance. Building that disclosure requirement into the document meant a similar question would not need to be resolved under time pressure again, protecting both Shira's assets and her relationship with her sister.

The outcome

The sale closed two days after the original date, once the independent valuation and Shira's documented consent were in hand. Azadeh's lawyer accepted the opinion, the closing proceeded on the agreed price, and Shira received the sale proceeds without the transaction ever being challenged. The short delay turned out to be the entire cost of resolving the issue properly, and the two extra days were absorbed without penalty on either side since both lawyers had agreed to the revised date in writing before the original one passed.

What made this a clean result rather than a costly one was that the underlying transaction was, in fact, fair. Niloufar had not used her authority to benefit her household at Shira's expense; she had simply failed to recognize that her relationship to the buyer needed to be disclosed and addressed rather than left for someone else to discover during closing week. Had the price been off-market or the terms unusual, the review could have gone very differently, and the deal might not have closed at all, or might have required renegotiating the price before any lawyer would sign off on it.

Shira kept both relationships intact through the process, with her sister and with the sale itself, because the conflict was handled directly rather than minimized or argued away. She later said the hardest part had been the two days of not knowing whether a sale she needed, recovering from surgery and managing a rental property from a distance, would fall apart over something she had not even known was a problem until the buyer's lawyer asked the question. Once the independent opinion was in hand, she said, the rest of the closing felt almost anticlimactic compared to those two days of uncertainty.

What you can learn from this