Types of Power of Attorney and When a Notary Is Required

Contents
1. What is a power of attorney under the law?
2. What are the main types of power of attorney?
3. When is notarization of the signature and content mandatory?
4. Power of attorney for a vehicle – when do you actually need one?
5. How is a power of attorney terminated?
6. Sources

A power of attorney is a document by which one person, called the principal, grants another person, called the agent (or attorney-in-fact), the right to act on their behalf. It may take the form of a simple written document, a document with a notarized signature, or a document with both a notarized signature and notarized content. The choice among these three forms depends on the type of transaction for which the document will be used. The involvement of a notary is required when the law imposes specific requirements on the transaction itself—for example, in cases involving the disposal of real estate, the creation of a mortgage, or the transfer of shares in a commercial company.

What is a power of attorney under the law?

The legal framework governing the power of attorney is set out in Articles 36–43 of the Obligations and Contracts Act (OCA). It is a unilateral legal act—it is sufficient for the principal (the person granting the power of attorney) to express their intent; the consent of the agent (the person receiving the power of attorney) is not required for it to take effect. It is important to note that granting a power of attorney does not deprive you of the right to personally perform the actions for which you have issued the authorization.
The agent is not permitted to enter into a transaction with themselves or with a third party whom they also represent, unless you have explicitly consented to this in writing. Any transaction concluded in this manner to your detriment shall not produce legal consequences for you.

What are the main types of power of attorney?

The form of the power of attorney depends on the requirements applicable to the transaction or action for which it is issued. Let us examine the three forms, ranked by the strictness of their requirements.

Simple written power of attorney

This is a written document that you sign without the involvement of a notary. It is used for actions where neither the law nor the relevant institution requires notarization—for instance, in certain administrative procedures.

Power of attorney with notarized signature

In this form, a notary certifies that the signature on the document was affixed by you. It is used when the specific action requires authentication of the signature, including in certain banking and administrative procedures.

Power of Attorney with Notarized Signature and Content

This is a stricter form of authorization. Pursuant to Article 37 of the Obligations and Contracts Act (OCA), when a contract must be concluded in a notarial form, the power of attorney may be in writing, with simultaneous notarization of both the signature and the content [1].
The choice between these three forms is not a matter of personal preference; rather, it is determined directly by the type of transaction that the authorized representative will carry out on your behalf.

When is the notarization of both signature and content mandatory?

The law mandates this stricter form to prevent abuse in transactions involving significant property value. Here are the instances where it is mandatory:

• disposal of real estate – sale, exchange, donation, or transfer;
• creation of a mortgage on real estate;
• establishment of a right to build or a right of use over a property;
• transfer of company shares in a limited liability company (LLC/OOD);
• conclusion of a lease agreement via a proxy.

For these transactions, the notary requires two identical copies of the power of attorney to be presented; the principal must personally sign both copies. Failure to follow this procedure renders the power of attorney void for the specific transaction, even if it has been notarized solely with respect to the signature.

Power of Attorney for a Vehicle – When Do You Actually Need One?

Situations involving motor vehicles often cause confusion because the requirements vary depending on the specific action:

• Driving a vehicle in Bulgaria. The mere act of driving a vehicle belonging to someone else does not strictly require a notarized power of attorney. The driver must have the necessary documents for driving and for the vehicle. 
• Driving a vehicle abroad. When traveling abroad, it is advisable to check in advance the requirements of the countries you will be passing through or where you will be using the vehicle. These may vary and could include additional documents. 
• Sale of a registered motor vehicle. When selling a registered vehicle, the law imposes specific requirements regarding the form of the contract. If the transaction is to be carried out via an authorized representative (proxy), the power of attorney must also comply with the applicable legal requirements.
• Representation before the Traffic Police (KAT), an insurance company, or the tax authorities. The required form depends on the specific action being taken and the requirements of the relevant institution. In some cases, a simple written power of attorney suffices, while in others, notarization may be required.

Before having a power of attorney for a vehicle notarized, verify the exact requirements of the institution to which you intend to submit it—the specific conditions may not always align with the general legal rule.

How is a power of attorney terminated?

A power of attorney is not perpetual; the principal (the person granting the authority) may revoke it at any time—any waiver of this right is invalid. Termination occurs on any of the following grounds:

• express revocation by the principal;
• renunciation by the authorized representative (agent);
• death or placement under legal incapacity (guardianship) of either the principal or the authorized representative;
• dissolution of a legal entity, where such entity is a party to the power of attorney.

For a revocation to take effect, it must be brought to the attention of the authorized representative— The mere decision to revoke it is not sufficient; the agent must also be notified. If the power of attorney was notarized, it is best practice to carry out the revocation before a notary, as both notarized and revoked powers of attorney are recorded in the "Edinstvo" (Unity) electronic register maintained by the Notary Chamber. Any institution before which the agent presents the document may verify its status in this register.
If you have not specified a validity period, the power of attorney remains in effect as long as the principal is alive and it has not been revoked. Therefore, it is good practice to always include a specific timeframe, especially when granting authority for a one-time action.
Before issuing a power of attorney, check the requirements for the specific action in question and clearly define the rights you are granting. This will help avoid ambiguity and ensure that the document can be used for its intended purpose.

Sources

[1] Obligations and Contracts Act (OCA)