Key Points on the Validity and Regulations of Power of Attorney (PoA) in Property Transactions
- Validity of POA: A general Power of Attorney is justifiable for the lifetime of the grantor (the person who gives the POA). A special POA for a specific transaction is valid only for that transaction. This is particularly relevant for NRI Power of Attorney and POA for NRI property transactions in India, ensuring the scope and duration are clearly defined.
- Restrictions on POA: The Power of Attorney holders cannot transfer the property to themselves or their relatives. The transfer has to be to the person specified in the POA document. This restriction applies strictly under the Power of Attorney rules for NRIs to prevent misuse, especially in the case of NRI Power of Attorney to sell property in India.
- Registration of POA: A POA used for immovable property transactions must be registered with the sub-registrar's office. An unregistered POA is not legally valid. For NRI POA registration in India, the grantor must comply with local laws, especially when giving Power of Attorney from abroad to India.
- Stamp Duty: The stamp duty for registering the Power of Attorney is around 1% of the property value in most states. This is in inclusion to the stamp duty payable on the actual property transfer. Understanding these costs is vital for NRI Power of Attorney to buy property in India or for property-related transactions.
- Revocation of POA: The grantor can rescind the Power of Attorney at any time before the transaction is completed. The durable Power of Attorney holder has no legal right to the property in such a case. This provision is essential under the Power of Attorney new rules in India, ensuring transparency and control.
- Risks for Buyer: The buyer should thoroughly verify the Power of Attorney holder's authority and the grantor's ownership to avoid potential legal issues in the future. For NRIs, ensuring proper Power of Attorney issuance from overseas to India and verifying documentation can mitigate risks.
Also Read: Notarisation and Apostille of Power of attorney in Country of residence