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In Lebanon an irrevocable power of attorney is used to transfer ownership of a property in place of the inscribed authentic deed. Two questions recur about it: is this power of attorney valid, and does it remain binding on the principal? And is it caught by prescription, so that it would lapse with the passage of time? This guide sets out the rule in the light of the Code of Obligations and Contracts and the Lebanese Code of the Land Registry (Decree No. 188 of 15 March 1926). It is an orientation guide and does not dispense with advice on the particular transaction.

Arabic version: الوكالة غير القابلة للعزل لبيع العقار في لبنان: حدودها ومرور الزمن عليها

French version: La procuration irrévocable de vente immobilière au Liban : ses limites et la prescription

The Principle: The Mandate Is a Revocable Contract

The mandate is a contract by which the principal charges the agent with performing an act or a set of acts on the principal’s behalf (Article 769 of the Code of Obligations and Contracts). Now the sale of a property is among the acts of disposition, not of administration: a general mandate does not suffice for it; an express special mandate to sell is required (Articles 777 and 778 of the same Code).

The principle is that this contract is not irrevocable on the principal’s side: the principal may revoke the agent whenever the principal wishes, any clause to the contrary is of no effect either between the parties or as against third parties, and the stipulation of a remuneration does not bar the exercise of that right (Article 810 of the Code of Obligations and Contracts). Revocation is therefore, in principle, an absolute right of the principal.

When Does the Mandate Become Irrevocable?

One essential exception tempers this principle: where the mandate is concluded in the interest of the agent or in that of a third party, the principal may not withdraw from it except with the consent of the party in whose interest it was constituted (Article 810, final paragraph). This is where the legal basis of the irrevocable mandate lies: it is not a departure from the law by a mere contractual clause, but a mandate established in the interest of the beneficiary and not in the sole interest of the principal.

The mandate to sell a property falls within this exception when it is given in the interest of the buyer: the buyer who has paid the price and received the mandate to transfer the property into their own name is the true party interested in it, so that it escapes the power of the principal alone. It is settled case law that a mandate given to inscribe a perfected sale, where the principal has acknowledged receiving the price, binds the wills of both parties by a bond that forbids the principal from withdrawing without the beneficiary’s consent.

The mandate is not deemed irrevocable merely by the label its heading gives it. What counts is its substance, not its wording, and the real intention of its authors, not the appearance of the term (Article 366 of the Code of Obligations and Contracts). It is settled, in doctrine as in case law, that the mandate is irrevocable and produces its effects once its content reveals that it was concluded in the interest of the agent or of a third party — which is inferred from one of the following two elements:

1. The principal’s acknowledgment of having received the price in full, or the unconditional discharge of the agent — including the agent’s exemption from the obligation to render account that normally weighs upon them (Article 789). This is the sign that the agent acts for themselves and not on the principal’s behalf, so that the mandate is concluded in the agent’s own interest.
2. The express naming of the third-party beneficiary, where the mandate is concluded in another’s interest.

It suffices that one of these two elements be established. It is not necessary to designate the agent or the third party expressly, once the content — through the acknowledgment of receipt of the price and the full discharge — reveals that the mandate is concluded in the agent’s own interest. By contrast, a mandate that merely confers on the agent powers of execution, without agreement on the price, acknowledgment of its payment, or discharge, remains an ordinary mandate that the principal may revoke at will, whatever else it may be called.

The Mandate in the Buyer’s Interest Does Not End on the Principal’s Death

The mandate ends, in principle, for several causes, among them revocation by the principal, renunciation by the agent, the death of one of the parties, and the loss of capacity (Article 808 of the Code of Obligations and Contracts). Yet the mandate concluded in the interest of the agent or of a third party escapes the effect of death: the death of the principal or the change in the principal’s status does not extinguish the mandate, once it was given in the interest of the agent or of a third party (Article 818 of the same Code).

This is a practical consequence of the first importance for the buyer holding an irrevocable mandate: it does not disappear on the death of the seller-principal, unlike the ordinary mandate which lapses on death. The interest for which it was established keeps it in force against the heirs, within the limits for which it was concluded.

The Prescription of the Irrevocable Mandate

Here two different things must be distinguished, which the mind may conflate: the prescription of the mandate as a legal relationship, and the rule of the freshness of the mandate at the moment of inscription.

First — the relationship itself does not lapse by the mere passage of time. The mandate ends only by one of the causes enumerated in Article 808, among which the mere lapse of a period does not figure so long as no term has been expressly fixed for it (Article 771 of the Code of Obligations and Contracts). As for the obligations born of the mandate contract — such as the rendering of account between principal and agent — prescription begins to run on them only from the extinction of the mandate, not from its constitution: the prescription period does not run on a relationship still in force.

Second — the five-year rule targets the ordinary mandate. The Code of the Land Registry lays down a particular temporal restriction: whoever requires an inscription in the capacity of another’s agent must justify the mandate by producing an authentic power of attorney; and where the application bears on the inscription of a real right, the agent must produce a power of attorney whose date is not more than five years old (Article 50 of Decree No. 188 of 15 March 1926, as amended by the Law of 19 February 1953). The purpose of this restriction is to protect the principal who might reconsider the idea of selling during the long period separating the date of the mandate from the agent’s appearance before the Land Registry to carry out the transfer, so that the power of attorney is not used after the principal has changed their mind without informing the agent. Accordingly, once five years have elapsed on an ordinary mandate intended for inscription, the agent can no longer use it in support of the inscription of the real right, and cannot be compelled to proceed.

Third — the irrevocable mandate is not caught by the five-year limit. Where the mandate is irrevocable — that is, concluded in the interest of the agent or of an expressly named third party — it is settled case law that it is not subject to the condition of renewal every five years, and that the agent may present it to the competent Registry to carry out its content even after that period has elapsed. The reason is that, in such a mandate, the principal has renounced the right of revocation: the doubt about the persistence of the principal’s will to sell — for which the five-year limit was instituted — thereby disappears; and when the cause disappears, the restriction disappears with it. This is where the great practical advantage of the irrevocable mandate lies: it escapes the term that strips the ordinary mandate of its fitness for inscription.

This advantage nonetheless remains subject to what precedes: that the mandate be irrevocable in reality and not by mere label, through the designation of the beneficiary made within it (Article 810). Failing that, it remains an ordinary mandate caught by the five-year limit, whose effect at inscription lapses on the expiry of that period.

It Remains a Mandate, Not a Sale That Transfers Ownership

However strong the irrevocable mandate, it remains a mandate and not a contract of sale that transfers ownership. It is settled case law that it does not turn into a sale, for want of gathering the elements of one, and that the sale it might conceal — firm though it be between the parties — does not transfer ownership so long as it has not been inscribed at the Land Registry on a definitive basis (Article 393 of the Code of Obligations and Contracts). The buyer who settles for the mandate remains the holder of a personal right against the seller, and not an owner holding a real right opposable to third parties.

If the seller or the heirs refuse to complete the inscription, the buyer may compel them to it in court. The buyer’s right to demand inscription is itself subject to prescription, but it is settled case law that prescription is interrupted where the buyer establishes, by an unregistered deed, that they received the thing sold and disposed of it in a public, continuous, and uncontested manner. The peaceful and public possession of the property thus preserves the buyer’s rank and interrupts the prescription of the right to demand inscription.

Common Mistakes to Avoid

• Taking the mandate for a completed sale: relying on the irrevocable mandate as though it transferred ownership of itself; it does not, because ownership passes only by inscription (Article 393 COC).
• Label over substance: taking comfort in a mandate labelled “irrevocable” which contains neither an acknowledgment of receipt of the price, nor a discharge of the agent, nor the designation of a beneficiary, and merely confers powers of execution; it remains in law an ordinary mandate, revocable and caught by the five-year limit at inscription (Article 810 COC and Article 50 of Decree No. 188 of 15 March 1926).
• The general mandate to sell: settling for a general mandate that does not expressly stipulate the sale, when the act of disposition requires a special mandate (Articles 777 and 778 COC).
• Neglecting possession and its proof: failing to record the receipt of the thing sold and the public disposition made of it, when this interrupts the prescription of the right to demand inscription.

Summary Table

Synthesis

The irrevocable mandate for the sale of a property is a valid instrument in Lebanese law once it is concluded in the buyer’s interest, by their designation: it then escapes the power of the principal alone and does not lapse on the principal’s death. Its essential advantage is that it is not caught — unlike the ordinary mandate — by the five-year limit at inscription: its content is executed even after that period has expired, because the principal has renounced the right of revocation and the cause for which the restriction was instituted has disappeared. It nonetheless remains a mandate, not a completed sale: it does not transfer ownership, which passes only by inscription at the Land Registry; and if the seller or the heirs refuse the inscription, the buyer keeps the right to compel them to it in court — a right that the buyer’s public and continuous possession preserves. The essential thing is to draft the mandate so as to protect the buyer’s interest, then to proceed without delay to inscription.

Each transaction keeps its own particularity: legal advice before relying on a mandate to transfer a property offers a surer guarantee than dealing with the dispute after it has arisen.

Related Articles

• How to Buy Property in Lebanon: The Legal Steps from Verification to Inscription
• The Promise of Sale, the Right of Pre-emption, and Acquisitive Prescription
• The Land Registry in Lebanese Law
• Definition of Real Property and Types of Ownership