To handle your property, medical or other financial issues on your behalf, a Power of Attorney (POA) is a legally binding document that appoints a person to manage it. While it might be upsetting to think about the possibility of having to obtain one in the future, a Power of Attorney (POA) is a vital element of your estate strategy.
If you're not able to manage your own affairs, then a POA is usually employed. Each form grants varying levels of authority to your attorney-in-fact, who will make decisions on your behalf. Some power of attorney to register property goes into effect after signing the documents, while others don't take effect until you're incapacitated.
The real estate industry has traditionally been among the most sought-after asset sectors for concealing unexplained money. Many methods, including the purchase and sale of property, were devised over time in order to make the investment appear legal (PoA).
If you purchase a property from someone who holds a (POA). As a result, the previous owner will be considered the title holder. The Supreme Court also determined that the law does not protect sales made under a general power of attorney.
In this article, we'll examine what an attorney does and what authority power of attorney (POA) confers on them.
When should you use a Power of Attorney for Property Registration?
A Power of Attorney is a legal document typically signed by a person who cannot carry out their transactions in person for various reasons.
Some of the reasons why you should give authority to someone else to complete a task are as follows:
- If the principal is located in a different country and cannot be present in the country for the obligation,
- In addition, if the principal is ill and confined to their bed,
- If the principal is an older person with health issues,
- If the principal has another legitimate justification for not being able to carry out their duties independently.
In India, There is a Connection Between The Power of Attorney (POA) in Real Estate,
We can now proceed to the next step to understand the meaning of a power of attorney for property registration and how the legal process is carried out. In the event of selling or buying a property, it is important to note that the POA for property registration is not a valid instrument to transfer the title of the property.
A sale deed has to be signed to transfer the title of the property, and the buyer must pay stamp duty and registration fees. In addition, the seller will also be subject to capital gains tax on the transaction. These fees can be avoided if you transfer title to property through a general power of attorney.
The seller can finalize the purchase by executing the general POA even without having a clear title to the property. From the consumer's perspective, they can purchase a property at much lower prices than those on the market.
Cultivated land cannot be sold to residential buyers without changing the land's use in accordance with the law. To stay clear of the "legal trouble" of conversion, Most property owners sell their land parcels using the general POA. In addition, many government-sponsored housing plans require a specified period of gestation in which units are given on a leasehold basis.
It's not common for the property owner to issue a POA for property registration on their agent before moving away and preventing the claimed resident from selling the property to a third party.
With the general POA, family members may sometimes grant each other property rights.
In many cases, buyers are deceived and make investments in the property without realizing that the transaction is unlawful.
Power of Attorney For Property Registration
The real estate industry has been among the most sought-after asset sectors to conceal unexplained funds. Many methods, including the sale or acquisition of property through a power of attorney, were devised over time in order to make the purchase appear legal (PoA).
Selling property through a power of attorney for property registration is a legal contract made primarily between two parties to evade the law. If a POA is used to sell a property, it needs to be legally registered. Additionally, a notarized POA for property registration could be used as proof in a court of law. However, based on the state where the instrument is drafted, the rules might be different.
In the early 1990s, the rise in popularity of this strategy coincided with the development of the real estate market. This was so significant that the Supreme Court (SC) was called upon to look into the issue and make a significant judgment in 2011, declaring the sale of property through a power of attorney to be illegal.
In India, The Power of Attorney Act of 1882 and the Indian Stamp Act of 1899 have both looked at the concept of POA. The statutes defined the term "power of attorney" as "any document that authorizes the person named in it to perform the act on behalf of the individual carrying out the transaction." Essentially, a person grants another person the legal authority to represent him and undertake specific obligations on his behalf.
Non-resident Indians (NRIs) typically utilize this tool since they may be unable to travel to their home country at any time due to professional and personal commitments.
A POA is particularly useful for busy people such as businessmen or those unable to fulfill a variety of professional and personal obligations because of its ease.
When someone purchases an immovable property, they must register it at the Sub-office Register and pay the required fees depending on the property's value.
Powers of Attorney (POA) Come in Different Types,
There are two kinds of powers of attorney-
- General Power of Attorney (GPA)
- Special Power of Attorney (SPA)
Although the General Power of Attorney (GPA) permits an agent to perform regular tasks on behalf of a person, it's not the same as a Durable Power of Attorney (DPA).
To fulfill certain obligations, a special power of attorney (SPA) is required.
According to a Supreme Court lawyer, "if you give an individual a (GPA), they can pay your utility bills, collect rent on your behalf, manage and resolve disputes, or perform the bank-related duties while acting as your representative.
The General Power of Attorney (GPA) and the Special Power of Attorney (SPA) must be registered for them to be legally valid.
A Special Power of Attorney (SPA) is void when the purpose for which it was created is completed.
The executor can cancel the General Power of Attorney (GPA) at any point throughout their lifetime.
The (GPA) loses its legal validity if they die.
Conclusion
A power of attorney for property registration (POA) is a legally binding document that gives an agent the power to make decisions on behalf of the principal. The agent might be granted limited or complete power to represent the principal in matters of health, property, and finances. If a person cannot make decisions on their own, A POA is often employed.
Before deciding on an agent to handle you in any of these situations, it is recommended to consult an attorney. It's also an excellent idea to ask your lawyer to guide you through notarizing your power of attorney and what you should include in each document.
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