What Is Power Of Attorney For Property Registration And Its Types?

Power Of Attorney - Namma Family Builder
  • To manage your property, medical, or financial affairs on your behalf, a Power of Attorney (POA) is a legally enforceable instrument that names someone to manage it.
  • Although it may be unsettling to consider the possibility of requiring one, a Power of Attorney (POA) is a crucial aspect of your estate strategy.
  • In the event that you are unable to manage your own affairs, a POA is frequently employed.
  • Each form grants varying levels of authority to your attorney-in-fact—the person who will make decisions on your behalf.
  • Some power of attorney for property registration goes into effect right after you sign them, while others don’t take effect until you’re incapacitated.
  • Real estate has traditionally been one of the most popular asset sectors for hiding unexplained funds.
  • Various methods, such as the sale and purchase of property were devised over time to make the investment appear lawful (PoA).
  • if you purchase a property from someone who has a (POA), As a result, the former owner will continue to be regarded as the titleholder.
  • In addition, the Supreme Court determined that sales made under a general power of attorney are not protected by the law.
  • In this post, we’ll look at what an attorney actually does and what authority power of attorney (POA) gives them.

When Should You Use a Power of Attorney For Property Registration?

  • A Power of Attorney is a legal typically signed by someone who is unable to carry out their transactions in person for a variety of reasons.
  • Some of the many reasons why someone would delegate authority to someone else to accomplish a task are as follows:
  • If the principal is based in another country and cannot be present for the obligation,
  • Furthermore, if the principal is ill and confined to his or her bed,
  • If the principal is an elderly citizen with health issues, or if the principal is
  • If the principal has another legitimate reason for being unable to carry out their responsibilities independently.

In India, There Is a Connection Between The Power of Attorney (POA) in Real Estate,

  • We can proceed to the following step now that we understand what a power of attorney for property registration is and how the legal procedure works.
  • When purchasing or selling a property, a POA for property registration is not a legitimate instrument for transferring property titles.
  • However, in Indian cities, selling a property through a general power of attorney is a legal has become normal practice due to the financial benefits it provides to both the buyer and the seller.
  • A sale deed must be completed to transfer property titles, following which the buyer must pay stamp duty and registration fees.
  • Furthermore, the seller will be subject to capital gains tax on the transaction.
  • By transferring property title through a general power of attorney, these charges can be avoided.
  • The sellers can finalize the purchase using a general POA even if they don’t have a clear title to the property.
  • From the standpoint of the buyer, they can afford a property at much cheaper prices than those on the market.
  • Agricultural land could not be sold for residential use without altering the land use, according to the law.
  • To avoid the “legal bother” of conversion, the majority of landowners sell their land parcels using a general POA.
  • Furthermore, most government-sponsored housing plans have a stipulated gestation time during which units are granted on a leasehold basis.
  • It is not common place for the owner to execute a POA for property registration on their agent before moving away, preventing the supposed resident from selling the property to another party.
  • To get around this, such units are regularly transferred using a general power of attorney, which was also considered as a vehicle to invest unaccounted funds in real estate.
  • Using a general POA, members of a family can sometimes award each other property rights.
  • In many situations, homebuyers are duped and invest in property without realizing the transaction is illegal.

Power of Attorney For Property Registration,

  • Real estate has traditionally been one of the most popular asset sectors for hiding unexplained funds.
  • Various methods, such as the sale and purchase of property through the power of attorney, were devised over time to make the investment appear lawful (PoA).
  • Property sale via create a power of attorney for property registration is a contract entered into primarily between two persons with the intent of skirting the law.
  • If a POA is performed for the sale of a property, it must be registered.
  • Also, a notarized POA for property registration would be accepted as evidence in a court of law.
  • However, depending on the state in which the instrument is being drafted, the rules may differ.
  • Beginning in the 1990s, the rise in popularity of this strategy coincided with the expansion of the real estate market.
  • So much so that the Supreme Court (SC) was forced to take notice of the situation and issue a landmark ruling in 2011, declaring property sales via the power of attorney to be illegal.
  • In India, the Powers of Attorney Act of 1882 and the Indian Stamp Act of 1899 have both examined the concept of POA.
  • These statutes defined power of attorney as “any instrument authorizing a named person to act on behalf of the person carrying out the transaction.”
  • In essence, a person grants another person the legal authority to represent him and undertake particular responsibilities on his behalf.
  • Non-resident Indians (NRIs) frequently use this tool because they may not be able to visit their country of origin at any one moment due to their professional or personal obligations.
  • A POA is especially useful for extremely busy persons, such as businessmen and those who are unable to undertake numerous personal and professional obligations, due to the convenience it gives.
  • When a person buys an immovable property, he or she must register it with the Sub-office Registrar and pay the required fees, which vary based on the property’s value.
  • For example, Mr. A wants to sell his house but hasn’t been able to find a suitable buyer to present in that situation for property registration charges and details.
  • He is unable to find a buyer and will not be able to file the sale deed at the Sub-register office due to personal reasons.

What is expected to do in this situation?

  • “A” can approve an agent through a limited powers of attorney, which is the easiest answer to the situation.
  • That Mr. A is compensated for it, The POA would ensure that the property is sold at a fair price.
  • There are two types of events that could occur now –
  • In the first scenario, Mr. A gives any trusted individual a general POA for property registration to ensure the property’s sale and present and execute the sale deed in front of a Sub-registrar.
  • In this case, Mr. A’s attorney will sign the selling deed on his behalf.
  • Because the power of attorney holder is the executant, it does not need to be attested, but it does need to be registered because it involves the transfer of immovable property.
  • A executes the selling deed documents and receives the consideration in the second case.
  • However, he is unable to produce the sale deed to the Sub-registrar for execution.
  • He will employ an attorney just to present the sale deed to the Sub-registrar in this circumstance.
  • This power of attorney must be attested by a Sub-registrar in the jurisdiction where the property is located under the Registration Act.
  • In addition, if Mr. A lives outside of India, the POA deed must be attested by a Notary Public of that nation or by a Council or Vice-Council of India.
  • Please keep in mind that attestation and registration are two separate things that cannot be swapped.
  • It is not possible to accept a document that requires attestation but is instead registered.
  • The sale of a property through a power of attorney is not legitimate, according to the Supreme Court.
  • The Supreme Court ruled that property transactions carried out under a general power of attorney (GPA) lacked legal sanctity and that only registered sale deeds could give such sanctity.
  • What is a power of attorney, and how is the property sold with it?
  • The next sections discuss a POA, how sales were made using this instrument, and why these are illegal.
  • In India, the Powers of Attorney Act of 1882 and the Indian Stamp Act of 1899 both discusses the notion of power of attorney (POA).
  • These statutes defined power of attorney as an instrument allowing a designated person to act on behalf of the person carrying out the transaction.

Powers of Attorney (POA) Comes in Different Types,

  • There are two types of powers of attorney,
  • General Power of Attorney (GPA)
  • Special Power of Attorney (SPA)
  • While a General Power of Attorney (GPA) allows an agent to execute normal tasks on one’s behalf, it is not the same as a Durable Power of Attorney (DPA).
  • In order to complete certain responsibilities, a special power of attorney (SPA) is provided.
  • According to, a Supreme Court lawyer, “if you give someone a (GPA),
  • They can pay your utility bills, collect rent on your behalf, handle and settle disputes, or carry out all bank-related tasks while serving as your representative.
  • On the other hand, if an NRI needs to sell his property in India, he says, he will do it through a local agent using a (SPA).
  • Both the General Power of Attorney (GPA) and the Special Power of Attorney (SPA) must be registered in order to be legally legitimate.
  • A Special Power of Attorney (SPA) loses its power after the task for which it was created is finished.
  • The executor can revoke a General Power of Attorney (GPA) at any time during their lifetime.
  • The (GPA) loses its legal validity if they die.
  • The most recent supreme court decision on POA for the year 2021
  • The decision, which came after interpreting numerous aspects of the legislation relating to property sales and took effect retroactively, stated that it would not affect the validity of sale agreements In actual transactions, Limited Powers of Attorney are used.
  • To clarify genuine cases, the Supreme Court cited specific instances for the family relatives, son, daughter, or life partner.
  • For example, it noted as a POA for property registration to handle his affairs or execute a deed of conveyance,”.
  • It clarified that existing records should not be affected because of the ruling while saying that municipal bodies should not entertain mutation claims for properties that changed hands through GPAs.

What Is The Process For Creating A Legally Valid Power Of Attorney?

  • An attorney can be appointed by anyone above the age of 18 who is of sound mind.
  • A minor cannot be named as an attorney’s power of attorney holder.
  • To be legally valid, create a power of attorney must be signed by both the principal and the attorney and two witnesses.
  • The deed is then signed and stamped on Stamp Paper of the appropriate value for the state in which it was created.
  • It is not necessary to register a power of attorney for property registration deed unless it contains the transfer of property rights/titles, etc.
  • Both parties to a power of attorney deed should be aware of their rights and obligations under the document and act in accordance with those rights and responsibilities.
  • The attorney’s acts undertaken in the course of his or her obligations as an attorney must be ratified, or agreed to, by the principle.

Conclusion

  • A power of attorney for property registration (POA) is a legal document that grants an agent the ability to make decisions on behalf of the principal.
  • The agent might be given limited or complete authority to act on behalf of the principal in matters of health, property, and finances.
  • When a person is unable to make their own decisions, a POA is commonly used.
  • Before choosing an agent to represent you in any of these circumstances, you should consult with a lawyer.
  • Also, it’s a good idea to have your lawyer lead you through the process of notarizing your power of attorney and what to put in each document.

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