If you hold a Power of Attorney, if you are a mandatary under a Protection Mandate, if you are a liquidator (executor) of an Estate or even if you simply keep an eye on your friends’ house while they are on vacation in Australia, you are, by the Civil Code, an administrator of the property of another. This comes with certain rights to make decisions on behalf of the actual owner, but also with certain obligations and accountability. The time will come for an account rendering: a more or less formal report of your actions and documents to justify the money spent and the property lost.
What is account rendering?
From just an Excel sheet to a formally registered notarial document, account rendering can be presented in many forms, but the gist is there: it should show details about the profits received and the expenses borne, with dates, particular amounts and documentary justification for each of them.
The report is provided to the mandator (in case of a PoA), to the tutorship council (in case of a protection regime), to the liquidator of the Estate (in case of a Protection Mandate) or to the heirs (beneficiaries) in case of the Estate liquidation.
There might be situations where the same person had a PoA or was a mandatary under a Protection Mandate and then became the Estate liquidator. A common mistake is to think that there is no need in the account rendering in such a situation. In the eyes of the law this makes the account rendering even more important, as a conflict of interest is presumed, and the task of protecting one’s responsibility becomes even more crucial.
When the mandator is alive and legally capable, regular annual account rendering might be done in an informal way or the mandator can even release the PoA holder of such an obligation. Yet preparing no regular reports might make it harder to provide the final account rendering (particularly, in case of the mandator’s death), and such a final financial report is not optional, it is required by law.
A potential grey area is if you — out of goodness of your heart — was taking care of someone’s property, while the owner — for whatever reason — was not able to be there. For example, your lonely neighbour was hospitalized, and you did your best to maintain his house from getting into disrepair. Let’s imagine now that the neighbour did not make it from the hospital and one day his heirs came. They saw you removing the snow or cutting some broken tree on your neighbour’s land. Later they came after you, pretending that your work was not sufficient or even caused some damage to the property. On your side, you could pretend that your taking care of the property was a work worth paying and also you could ask for a compensation for the materials used (like paint, for example). Even in the absence of a formal contract both the rights and the obligations related to administration of the property of another might come into play, complicating your life significantly. Particularly, because the accounting for your administration may be requested.
Therefore, whenever you administer someone’s property — whether formally or informally, one day you might need to provide the account rendering. Prepare in advance, keep all your invoices, receipts, cheques and estimates. And, to be on the safe side, also keep electronic copies!
Allen Madelin Lawyers provide consultations and representation in a variety of legal cases, including those related to PoA, Protection Mandates, Estate liquidation and administration of property of another. In need, please contact us by phone: 1 514 904 4017 or by email: [email protected].
