Any adult citizen can use the power of attorney (PoA) instrument to conduct various real estate transactions. Under this legal arrangement, one can entrust anyone to represent them, in order to conduct property businesses on their behalf. With PoA instrument, you can conduct various real estate related businesses, including sale, purchase, renting, leasing, mortgaging, dispute management, etc. Also, if a property is jointly held, it might be difficult for all the co-owners to present themselves and complete a transaction. By way of granting a PoA to one person, the joint owners can get past any hassles.
Types of power of attorney (PoA)
There are three types of PoA – general power of attorney (GPA), special power of attorney (SPA) and durable power of attorney (DPA). Under a GPA, your representative is given general rights to make decisions on your behalf, while the SPA is granted to conduct specific businesses. A DPA, on the other hand, remains valid for the entire lifetime of the executor. Also, while the SPA loses its legal validity as soon as the task is performed, a GPA can be revoked by the executor as and when he wants.
How to draft a power of attorney deed?
You could make the draft of the content for the PoA on your own, but hiring a legal expert with specialisation in sale/purchase of properties, is preferable. Irrespective of who is doing it, be certain to include these details in the draft:
Your details: Name, age, overseas address, Indian address and occupation.
Your signature: The principal has to sign on each page of the PoA draft.
Your representative’s details: Name, age, address and occupation.
Purpose of the POA: State the specific purpose for which the PoA is being created.
Validity period: The time when the POA comes into force and when it is terminated.
To give it a legal validity, the draft will now have to be authenticated by the local authorities.
PoA execution
Step 1: Draft the POA on a non-judicial stamp paper of Rs 100.
Step 2: Visit the sub-registrar’s office in the area concerned, along with the legal representative and two witnesses. Each party must carry their ID proofs and photographs.
Step 3: The sub-registrar’s office will collect the PoA document, photos and fingerprints of each party, along with other papers and the stamp duty for PoA registration.
Step 4: The registered POA could be collected on the due date. This could typically take a week.
Note here that the Indian Registration Act, 1908, doesn’t make it compulsory for a PoA to be registered. However, the Supreme Court, in 2011, ruled that registration of PoA is mandatory if it is executed for the sale of a property.
How to revoke a power of attorney?
As and when the executor thinks he must revoke the PoA, a due process has to be followed to perform that task. If the PoA was registered at the sub-registrar’s office, for instance, it has to be cancelled from there. A PoA is also revoked, when the grantor dies, becomes insane, or is declared insolvent.
Before revoking the PoA, the executor must inform all parties concerned and do the cancellation as per the terms and conditions specified in the document. This information must also be published in the local media, depending on the size of the property and impact of the decision. A notice in this regard should also be posted on the said premises, for informational purposes.
Important facts about power of attorney
- You have to be mentally stable to execute a PoA.
- A notarised PoA does not have legal validity as a registered PoA.
- The PoA loses validity after the death of the executor.
- Any errors in the draft would render it null and void.
- You cannot transfer ownership of the property through a PoA.
- You have to provide an address in the country of your current residence in the PoA draft.
- Any misuse of the PoA by the attorney might land you in trouble.
- You can ask their attorney to accept payment on his behalf. However, the attorney cannot receive the payment in his account.