In India’s dynamic real estate landscape, certain property deals are settled through a legal instrument called Power of Attorney (PoA). You might be an NRI managing assets from a distance, an older person entrusting responsibilities, or merely seeking convenience; awareness about the Power of Attorney in real estate will enable you to make wiser, legally valid decisions.
This article describes how a Power of Attorney is applied in property, its legal aspects, how much it costs, and why it remains a continuing feature of property transactions in every part of India.
(This blog is written by Nikhil Mawale, the best property advisor in Pune understands your dreams, offering expert guidance, exclusive deals, and smart plans for homebuyers and investors.)
What is a Power of Attorney in Real Estate?
Power of Attorney (PoA) is a legal form that gives someone else (the agent or attorney) the authority to act on behalf of another person (the principal) in legal, financial, or property transactions. In property transactions, the agent can purchase, sell, lease, or manage property on behalf of the principal.
Types of Power of Attorney in India
There are primarily two types of PoA utilized in real estate:
- General Power of Attorney (GPA): Authorize general powers to the agent, e.g., sale or transaction in other properties.
- Special Power of Attorney (SPA): Restricts the agent to one particular act, e.g., sale of a particular property.
SPA is generally used in property transactions to prevent misuse.
Power of Attorney Format
- The correct Power of Attorney format should include:
- Principal’s and agent’s full name, age, address, and ID proof.
- Description of the authority being granted.
- Details of the property involved.
- Duration of validity (if applicable).
- Two witnesses’ signatures.
- Attestation by a notary or registered with the Sub-Registrar (if applicable).
Legal Backbone: Power of Attorney Act in India
Power of Attorney Act, 1882 regulates the making and utilization of PoA in India. The Act lawfully declares the type of authority to be conveyed and up to what level the attorney can act. In spite of the compactness of the Act, it operates alongside other Indian legislation such as:
- The Indian Contract Act, 1872
- The Registration Act, 1908
- The Transfer of Property Act, 1882
A registered PoA is more secure legally, particularly for high-value property sales.
Power of Attorney for Sale of Property
In case you are selling property under a PoA in India, remember:
- The PoA should have the express authority to sell.
- It has to be registered in the local Sub-Registrar’s office.
- Notarized PoA would not hold in courts for legal transfer of property; registration is required to make a sale transaction valid.
- Stamp duty is charged according to the state government’s laws.
Key Point: According to the Supreme Court judgment (2011), a property cannot be transferred through GPA alone. Sale deed must be executed and registered for legal transfer of ownership.
Cost of Power of Attorney in India
Preparing and registering the fee of a Power of Attorney is based on:
- Stamp Duty: State by state. For instance, Maharashtra is ₹500 for SPA and ₹1000+ for GPA.
- Registration Fee: Typically ₹100 to ₹1000.
- Notarization Fee (optional): Approximately ₹100–₹300.
- Legal Drafting Charges (if on the payroll): ₹1000 to ₹3000 based on complexity.
Tip: Get your PoA drafted or vetted by a legal professional to prevent mistakes or abuse.
What is Lasting Power of Attorney?
While not widely used in India, the Lasting Power of Attorney (LPA) is very common in the UK and other nations. It provides for the ability to provide instructions regarding healthcare, finances, or property in the case of mental incapacity of the principal.
In India, though LPA is not a legal term, parallel power can be conferred by a well-drafted PoA document. However, it’s always subject to judicial review, particularly in cases of disability or mental incapacity.
Why Power of Attorney Is Important in Property
- Convenience: Useful for NRIs or where the person cannot commute or cannot travel.
- Time-Saving: Facilitates easy property transaction.
- Legal Safety: Properly written and registered PoA provides legal acceptance before courts.
- Flexibility: Can be limited in terms of scope and duration.
Final Thoughts
Power of Attorney is a strong legal tool in Indian property, but be cautious while using it. Whether you are granting power or serving as an agent, make sure the paper is well written, registered, and used legally. As property laws change, particularly in metropolitan areas such as Pune, Mumbai, and Delhi, keeping up to date and legally equipped is the best means of safeguarding your investment.
Also Read : 1) Understanding Power of Attorney: A Comprehensive Guide
2) Affordable Housing in Pune: The Next Frontier of Indian Real Estate?
FAQ
Q.Power of Attorney vs Vakalatnama
Power of Attorney (PoA) authorizes a person to perform legal or financial tasks on someone else’s behalf, whereas a Vakalatnama is specifically used to authorize an advocate to represent someone in court.
Q.Power of Attorney vs Board Resolution
A Power of Attorney (PoA) grants authority to an individual or company to act on someone’s behalf. A Board Resolution, on the other hand, is an official decision passed by a company’s board, authorizing a specific employee or director to carry out certain actions.
Q.Power of Attorney vs Executor
A Power of Attorney is only valid during the lifetime of the person granting it. An Executor, however, is appointed through a will to manage and distribute the estate after the person’s death.
Q.Power of Attorney vs Registry
A Power of Attorney only grants the authority to perform actions on someone’s behalf. A property registry, however, is the official legal proof of ownership transfer. Buying or selling property through PoA is not considered legally valid without proper registration.
