What is the Power of Attorney in India?
Purchasing a property is quite a lengthy process. Besides knowing the elaborate process involved in purchasing and registering a property, it is also essential to keep in mind the documents required. One of the essential documents needed as a property owner is the power of attorney (PoA). PoA is essential when you are unavailable and want a trusted party to make decisions on your behalf on financial and legal affairs. In general, signing a PoA document with a trusted party helps a great deal. Read on to know more about the Power of Attorney in India, the types of Power of Attorney and the latest rules for PoA in India.
What is the Power of Attorney for Property?
Power of attorney is one of the comprehensive legal property documents, that allows the property owner to appoint another individual to manage the property in the absence of the property owner.The designated person is referred to as a Power of Attorney holder, and the property owner is referred to as the principal or donor. Power of Attorney is one of the notable legal documents required for purchase of property.
Types of Power of Attorney
1. General Power of Attorney
General Power of Attorney, also called the conventional Power of Attorney, is the most common type of Power of attorney in India. This is signed to give the power of attorney holder the right to make decisions on behalf of the principal in numerous affairs. This can be legal affairs, business transactions or even medical decisions. It is essential to sign a general power of attorney for all purposes, with a trusted party.
2. Special Power of Attorney
The special Power of Attorney is also called a limited Power of Attorney. As the name itself suggests, in this type of power of attorney, the PoA holder gets to exercise only limited powers. The PoA holder can exercise the right to make decisions for a specific time period and for certain responsibilities assigned by the principal, like signing a specific deal.
3. Durable Power of Attorne
The durable Power of Attorney comes into effect from the time it was signed till the principal’s death or till the principal decides to cancel it. This is the kind of Power of Attorney in India, in which the Power of Attorney holder gets to make decisions on behalf of the principal when they are indisposed or unable to make decisions for themselves.
4. Financial Power of Attorney
The financial PoA is the practice of appointing a person to make financial decisions with regard to your business and property. This Power of Attorney in India is divided into categories like general PoA, limited PoA and durable PoA, where the rights and responsibilities are exercised accordingly. In the financial PoA, the holder gets to practise various financial activities like making deposits, signing checks, making withdrawals, etc.
How to choose a PoA?
- The PoA holder has to be a minimum of 18 years.
- Appoint a trustworthy person who does not misuse the power for personal benefits.
- The PoA should have the capacity to function rationally with regards to matters of finance and property management.
How to revoke a PoA?
- A PoA can be revoked by the principal whenever they wish to.
- It can be revoked by signing a revocation letter in the notary public or the recorder’s office.
PoA in Real Estate Industry
In real estate transactions, PoA is a crucial document crafted to appoint a trusted person to manage the property on behalf of the principal. Especially for NRIs who would like to purchase a property in India, signing a PoA can greatly aid in making informed decisions on behalf of the principal who is not available in the country.
Power of Attorney Sample Format: Below is a Power of attorney Sample format where all the details regarding the principal and the PoA holder are mentioned. The agreement also contains the rights that the designated person can practise.
KNOW ALL MEN BY THESE PRESENTS THAT I, __________ S/o. / W/o. aged ______ about years, residing at No.___________ do hereby nominate, appoint constitute and appoint Sri./Smt______________________ S/o. /W/o. aged about _____ years residing at ______________________as my true and lawful power of attorney holder to do the following acts, deeds and things on my behalf and in my name in respect of the schedule property.