Decision making is considered as one of the supreme skills of humankind. According to scientists the number of decisions made by an average human being ranges from a couple of hundred to several thousands! Decisions could be more consequential when it comes to properties, bank accounts, possessions etc. But what if you are in a situation of not being able to make these vital decisions in life ? It could be either due to you not being physically present at a specific location like being abroad or ill, old etc. What can be done in such a situation? This is where a Power of Attorney or POA enters the picture. It is common to give the rights to a dependable person to bear the registrations, sale, rent out, etc. if you are busy with your daily activities.
Power of Attorney (POA)/General Power of Attorney(GPA)/Specific Power Of Attorney(SPA): It is a legal document whereby the Principal or Executant appoints an agent or attorney to do and execute certain acts or deeds on his/her behalf.
Principal (Executant): An Executant is a person who is executing the POA and is authorizing an agent to do something on his/her behalf. He/she should be careful while authorizing an agent and the power given to the Agent/Attorney.
Agent (Attorney): The person to whom such powers are granted and the one who is authorized to act on the principal’s behalf is the Agent or the Attorney holder.
Execution of Power of Attorney:
Draft Document: Power of Attorney is taken very lightly but it has a grave impact. It should be drafted by legal experts clearly defining its scope and objectives. Proper and complete address of the property should be present along with the name of the Principal and Unique Identification of Attorney must be there. Original POA/SPA/GPA needs to be handed over to the Attorney. One important thing to note is that, In ONE POA/GPA/SPA, one principal can appoint only one attorney.
When you decide to go ahead with the process, you might come across a few terms like Notarisation, Apostilling, Registration, Adjudication etc. Let’s see in detail what these terms mean.
Notarisation: A Power of Attorney must be signed and executed before a certified notary officer in your city who shall also notarize it.
Apostilling: A Power of Attorney must be apostilled for NRI in the USA. This step is not required for domestic POA. An apostilled copy is a certificate from the State officials verifying that the notarized copy of the power of attorney is valid. This is done by the Authentication Division in the State Department. Once the document is apostilled, there is no need to get it attested from the Indian Embassy.
- In many places in India, they would easily recognize the attestation by the Indian Embassy/Consulate and hence may ask for attested copy despite the document already being apostilled. Hence, to avoid any inconvenience, if you wish to have the apostilled document also attested by the Consulate, you may apply to the Consulate.
- The Consulate will attest the documents only after they have been first apostilled by the state authorities concerned in the US. Apostilling is done at the offices of the Secretary of State where the applicant resides. For details, please check the state government’s websites. For example, residents of California may check the website www.sos.ca.gov
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Attestation by the Indian Consulate is optional. You may do so as explained above. Once the POA is apostilled and/or attested by the Indian Consulate, it has to be registered in India.
Registration: POA has to be registered so that the Attorney can execute Buy/Sale of immovable property on behalf of Executant. It must then be Adjudicated by the District Registrar.
Adjudication and Stamp Duty: Stamp Duty must be paid by the Attorney in the jurisdictional District Registrar’s office where the Property is located preferably. Stamp duty varies depending upon the relationship of Executant and the Agent. This process is called adjudication of POA as per the Indian Stamp Act. POA issued in the USA must be adjudicated by Attorney Holder to make it legally accepted POA in the Sub Registrar office.
KEY Points to consider for POA:
- When it comes to the sale of property i.e power of attorney to sell real estate, POA should be given to blood relatives only. In all other cases blood relation is not required. In cases, where it cannot be given to blood relatives, it may attract higher stamp duty which will approximately be up to 5% of the prevailing guideline value/circle rate of property. We suggest consulting your legal advisor in such cases.
- For executing Rental Agreement, POA can only be notarized instead of getting it registered. Your legal expert would be able to guide you in such a scenario. Adjudication of POA is required only for Registration of POA of NRI.
- Special Power of Attorney is recommended for property related matters. Seller must hand over the Original POA/GPA to the current Buyer. When the current buyer sells the property in future, the new buyer will get original POA for his records.
- For POA for Home loan purposes, KYC (PAN Card, Indian Passport, Visa, Passport Size photo) of Principal must be notarized.
- Hire a legal expert for POA of Buy/Sale of property as its impact is huge.
- POA holds a high impact in any transaction. Your registration of sale deed could be postponed if POA is not properly executed and stamped. Invalid POA may cost you an additional trip from your hometown to the location of property for sale. If for any reason, the POA is found to be invalid post registration of sale deed, you have to once again execute a Rectification Deed.
Having a power of attorney for real estate management can be especially useful if you are unable to manage your affairs for any reason. It enables you to appoint someone you trust to take care of important decisions and transactions, such as banking, investments, property management and more. Therefore it is important to understand the full scope of what a power of attorney can do and how it works. At Agarwal Estates, we swear by Trust & Transparency. We are here to help explain all the details about power of attorney for land or any concerns you have in real estate service so that you can make an informed decision.
