Preparing a Special Power of Attorney for Property Purchase in India

Preparing a Special Power of Attorney for Property Purchase in India

A power of attorney (POA) has to be prudential, practical, and sensible. NRIs must assign it to execute financial deals when they are unavailable in India.

Three Types of POAs

In India, three kinds of POAs are typical. They differ in the legal power designated to the assigned. They are:

  • General Power of Attorney: This POA is generally risk-ridden and can be misused for fraud. With a general power of attorney, the holder has substantial control over your financial affairs. The holder may operate your bank accounts, issue checks from your account, sign tax forms, etc.
  • Special Power of Attorney: A special power of attorney limits the ability of the holder. Popular among NRIs, this POA defines the role(s) and the limits of execution on your behalf. This power of attorney can avoid any issues at the time of execution of a deed.
  • Admit Power of Attorney: This is very limited in scope. As per this power of attorney, the holder’s authority is limited to representing the grantor at the registration office. This could be used for some minor clarifications raised by the registrar.

POA For Property Matters

In property matters, a power of attorney should be registered to give it legal validity. The NRI should sign the document at the Indian consul in the country of residence. Later, send it for registration in India with the relevant sub-registrar of assurances.

Registering Power of Attorney

Suppose you are a resident of a country that is a signatory to the Apostille convention, for example, the U.S. Then there is no need for a consul attestation of the power of attorney document. As per convention, a public document executed in a signatory country is valid in other contracting countries.

It is better to certify the power of attorney at the local Indian consul. Sometimes, ignorance of the convention at local governance levels in India can cause problems when executing a deed. The local administrators would recognize an Indian embassy seal.

The Indian consulate certifies only after the resident country administrators apostille the document. In the U.S., the Secretary of State offices where the applicant resides is in charge of apostilling.

  1. The applicant and two witnesses should sign a power of attorney.
  2. Get it apostilled by the local authority in the resident country.
  3. Send it to the local Indian embassy office.

Remember, the name and address of the two witnesses should be clear in the application.

General Embassy Requirements

For attestation purposes, the embassy would need the following documents:

  • Originals of all the supporting documents
  • If originals are unavailable, bring their legible notarized copies
  • The passport and the apostilled document
  • Proof of visa status
  • Proof of residence in the resident country

Registering in India

The holder should register a power of attorney at the registrar’s office within 90 days of its receipt. Two witnesses with their address proof should be with the holder during registration.

Revoking Power of Attorney

Apart from the earlier classifications based on the authority of a power of attorney, a POA is further classified into:

  • Revocable: You can revoke a revocable power of attorney via two newspaper notifications. Also, you must send a copy of the revocation to the holder.
  • Irrevocable: Only a judicial court can upend an irrevocable power of attorney. Let your lawyer approach the court and apply for adjudication against the power of attorney holder.

Finally, the power of attorney ceases with the death of the grantor. But, this does not apply to an irrevocable power of attorney (see revoking a power of attorney above).

If the power of attorney holder is a spouse, then a power of attorney is revoked upon divorce.

Points to Consider

  • It is better to mention the details of the property in the power of attorney document.
  • Have a time frame for the validity of the power of attorney.
  • Have an indemnity clause.
  • Have all sorts of payment procedures directed to your NRO account.

Payment Process on The POA Document

Agree on the payment process for all the deals under the purview of the relevant power of attorney. The deed must ensure that payments are made to your NRO (non-resident ordinary) accounts only.

A power of attorney is the most practical and cheapest way to ease an NRI’s financial deals. Its flip side is the potential for fraudulent use by the holder. However, the precautions mentioned above can help you make the most of your power of attorney.

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