A “power of attorney” (POA) is a legal instrument whereby one person gives another person the authority to act on his or her behalf as his legal representative, and to make binding legal and financial decisions on your behalf. In Stroud’s judicial dictionary “power of attorney is defined extensively as an authority whereby one is set in the stead or place of another to act for him”. In Blacks dictionary it is described as the instrument by which a person is authorized to act as an agent of the granting it. It is pertinent to mention here a person need not be a lawyer to hold a Power of Attorney as an agent for someone else.
The power of attorney can grant considerable power to a third party to act on your behalf. Therefore, before you sign your name to legal contracts, you should give careful consideration to the person to whom you choose to grant those powers, and whether any limits should be imposed in the time the power of attorney will last, or in its scope. Granting a Power of Attorney is a legal process that involves the drafting of a document which assigns to another person the power to act as your legal representative.
Every adult has day-to-day affairs to manage. Many a times even when joint ownership situations exist it is not possible for a spouse or child to act for in the event of catastrophic illness or injury them. .The lack of properly drafted and executed power of attorney can lead to a lot of complications when an individual is incapacitated due to severe illness or injury rendering him/her unable to make decisions or manage financial and medical affairs.
It often happens that, due to ignorance of law, people fail to make a proper power of attorney. It must be remembered that it is preferable that one should make a power of attorney to avoid the inconvenience and expense of legal proceedings. It must be done while the principal is competent, alert and aware of the consequences of his/her decision.
Every act performed by your agent within the authority of the Power of Attorney is legally binding upon the persons granting it. A power of attorney should be given only to a trustworthy person, and only when absolutely necessary. The person who empowers is the Principal and the person to whom the power is conferred is the Agent
there are two types of power of attorney; “general” and “special” (or limited).
A general power of attorney:
- The principal empowers the agent with the right to carry out all legal acts on his behalf without restricting it to a particular transaction or act,
- Gives the agent very broad powers to act on behalf of the Principal
A special power of attorney:
- The authority is restricted to act only on certain matters or only a particular kind of transaction or to carry out a specific legal transaction for the Principal.
- The agent’s power of attorney expires on the completion of the transaction
POINTS TO REMEMBER
- The general rule of power of attorney is that it should be strictly construed.
- Unless an express power is conferred on an agent to enter into contracts of guarantees on behalf of his principal or to execute or negotiate , negotiable instruments for his principal jointly with others
- An agent cannot by his acts bind the principal to a larger extent than he is empowered to do under the power of attorney.
- Fraud by the power agent does not bind the principal. He cannot be sued or otherwise held responsible for fraud by the agent
- If the power does not authorize the agent to carry on a business except with limitations any act done by him in excess of such power will not bind the principal.
- For example power to dispose of property does not confer a power to mortgage the property.
- Power to manage immoveable property cannot permit principal’s ornaments which are a moveable proper
IMPORTANT RULES FOR CONSTRUCTION OF POWER OF ATTORNEY
- The operative part of the deed is controlled by the recitals
- Where authority is given to do a particular act, followed by general words, the general words are restricted to do what is necessary for the proper performance of the particular acts.
- General words do not confer general powers, but are limited to the purpose for which the authority is given, and are construed as enlarging the special powers only when necessary for that purpose
- The deed must be construed so as to include all powers necessary for its execution
REVOCATION OF POWER OF ATTORNEY
Power of Attorney can be revoked or would stand revoked if:
- Revoked by the principal himself
- The principal dies or becomes insane or becomes bankrupt
- The business for which the agent was appointed is over
- Mutually agreed upon by the principal and agent
- The right under the power of attorney is renounced by the agent
REGISTRATION OF POWER-OF-ATTORNEY
- Registration of power of attorney is not compulsory. it is optional
- In India, where the Registration Act, 1908, is in force, the Power of Attorney should be authenticated by a Sub Registrar only, (Whenever a person signs the document and his attorney presents/ admits execution).
- In other areas, attestation should be by a Notary or diplomatic agents
- In case an attorney under a valid Power of Attorney himself signs a document, he may, as an executing (signing) party present/admit execution of a document though it is attested by a Notary, unless the text of the power specifically excludes such powers
- Foreign Power of Attorney should be got stamped by the Collector after its receipt in India within prescribed time of 3 months
- Registration of power of attorney authenticates the deed of power of attorney
- Power of Attorney shall be attested by two or more adult independent witnesses who are of sound mind
- If a power of attorney is in respect of an immovable property of value more than Rs100 it must be registered.
Usual conditions for giving power of attorney are; if you are an NRI having real estate property in India. You give the power of attorney to any of your family member or trustworthy person to rent or sale of your property. Also for e.g. If you have a flat in Pune and you are working in Bangalore or any other city as the case may be, if you want to rent out your property in Pune in your absence you give the power of attorney to your family member or trustworthy person thereby giving the nominated person to take care of legalities related to your property in your absence as mentioned power of attorney is the authority to act on his or her behalf as his legal representative.
Power of attorney for real estate:
- To execute all contracts, deeds, bonds, mortgages, notes, checks, drafts, money orders.
- To manage, compromise, settle, and adjust all matters pertaining to real estate.
- To lease, collect rents, grant, bargain, sell, or borrow and mortgage.
4 of us: Myself, my mom, my aunt (Uncle’s wife of paternal side) and my elder sister haave entered into a sale of property agreement with a purchaser for selling our ancestral property (where we reside) in lieu of an advance money of 3 Lakhs thereby giving him a power of attorney (registered) to undertake few processes like mutation, dealings with tenants, etc. on behalf of us till the time (within 4 months of signing agreement with him) we receive the balance money from him and handover possession to the said person. Now due to some family disputes we wish to turn around and cancel the whole agreement process thereby wishing to retain our property. It is almost three months have passed from the date of agreement but the purchaser is not willing and pressurising us and asking for a huge money to wind up the process.Is it possible that we go for revoking the POA? Can the agreement be cancelled? What exactly is the process for winding up the story? What are the legal consequences of such wind up? What if the purchaser doesn’t want to take/accept the refund of advance amount which he’s paid us? Can we get relief from him at this situation? Please guide.
Regards,
Simon
Dear Sir/Mam,
The answer for your legal query is as follows:
The Power of attorney can be revoked in certain circumstances.But its consequences can be discussed only after going through the terms and conditions of the Power Of attorney. Do not take any decision in a hurry, do not pay huge amount of money to terminate the contract.
Regards,
Adv. Mrs. Mrudula Prasad Chitale
BA, LLB, LLM
http://www.bharatestates.com/blog/index.php/authorcontributor-for-bharatestates-com/
Hi,
this is the story in 2003/2004,my uncle had sold our land at very low rate. but due to certain reasons till today our land is still on our name only.so i just want know that after how many years, the agreement can cancel if it is not executed,
@ Yogesh
Sir,
1) Firstly whether the document is registered ? (you have mentioned that it is not executed- what does that mean?Execution and Registration are totally different issues.
2) We can challenge the Sale deed within the period of three years from the date of knowledge.
3) Sale deed can be challenged, we have find out the grounds for that.
4) whether the land was ancestral property? ( this is imp issue)
5) who is in possession of the land?
Regards
Adv. Mrs. Mrudula Prasad Chitale
BA,LLB, LLM
http://www.bharatestates.com/blog/index.php/authorcontributor-for-bharatestates-com/
Dear Sir,
I have made an agreement to purchase a complex in India. Made the agreement and registered in registration office also.
By mutually both parties agreeing, I want to cancel the agreement. As I am working out of India I want to give my brother a POA to cancel the agreement.
Kindly explain the procedures to be followed.
Regards
Sadakka
@ Sadakka
Dear Sir/ Madam,
Cancellation of the agreement totally depends upon the terms mentioned in the agreement. So to give you the proper advise I need to see the agreement. Normally the cancellation is made after giving notice to the other party stating therein the reason and if the other party agrees then we have to execute and register the Deed Of Cancellation also because then only the builder is empowered to entered into the agreement with another person in respect of the same complex.The notice of cancellation is imp here as sometimes in the agreement “Forfeiture of the amount in case of agreement ” is put.But the same is not valid.
Secondly POA in the name of your brother, you have to sign it before the Notary in the state where you are living and send it here in pune( if the brither is in Pune) and then we have to get the same adjudicated from the authority appointed for the said purpose.To complete the procedure you need not be in Pune and your brothers presence is also not necessary in the office. But then he has to give the Authority to the advocate .The POA is also required to be registered.
Regards
Adv. Mrs. Mrudula Prasad Chitale
BA,LLB, LLM
http://www.bharatestates.com/blog/index.php/authorcontributor-for-bharatestates-com/
I am one of the legal heirs ( out of six) to my fathers residential landed property in Chennai. My father died in 2005 without making a will. Hence the property is undivided. Can we sell this property jointly as legal heirs on Power of attorney basis to one buyer. what are the likely complications / risks that can arise. Why would the buyer want to buy this property on power of attorney basis when we are all ready to sell it out right by means of sale deed.
@ Uma,
Madam,
Actually if all are ready then it is advisable to execute the document by all the heirs. If POA is given then the dis-advantage is that the pOA holder can change the terms and there will not be transparency in the dealing.so actually for the Purchaser also it is better that he takes the signatures of all the heirs.
Regards
Adv. Mrs. Mrudula Prasad Chitale
BA,LLB, LLM
http://www.bharatestates.com/blog/index.php/authorcontributor-for-bharatestates-com/
Dear Sir,
If i want to buy a house on power of attorney In Bangalore, Can i do that legally? What are the risk involved to purchase a house on Power of Attorney.
As far as i have information that purchasing a flat on power of attorney does not come under law. Does this means this is illegal?
Thanks in advance of reply.
~Ajeet S Sachan
Dear Sir,
I am buying a piece of land in Bangalore and the owner is an elderly person residing in Kerala. This elderly person owns that land in Bangalore and he has given a power of attorney (which is not registered) to sell this piece of land to a broker in Bangalore six months ago.
Now I have agreed a price with the broker to buy that land and we are in the process for registration.
Since the POA was not registered on the broker’s name, the sales deed is going to be between me and the seller who is in Kerala. Since he is an elderly person and he is not able to travel to Bangalore for registration, the seller is preparing another POA on her daughter’s name which will be registered in Kerala in a sub-registrars office, so that the owner’s daughter can travel to Bangalore and sign the sale deed in a sub-registrars office in Bangalore for me.
I have been asked to make demand drafts for the agreed amount split between the seller and the broker.
I am bit concerned about the POA registration in Kerala in my absence!
Also I am concerned about the POA on the brokers name; the seller would have created 2 POAs, one on the Brokers name which was created 6 months ago and the other is on his daughter’s name which will be registered in Kerala.
What are the checks I need to do as a buyer to safe guard my interests?
Is the process okay or do I need to change this in a way which is safer to me.
Regards
Subramaniam S
Sir,
My father owns a small construction firm based in Delhi and having contracts in Sikkim. Two persons have been given POA for a particular project site. Until now it has never been a problem but now the concerned government department (BRO) insists to withdraw one of the POA, claiming that legally it is possible to grant only one POA on any project. They are ready to backtrack their decisions if we can give them the reference to any law or guidelines stating that it is allowed to grant more than one POAs. Could you please provide any reference in this regard. Any help of yours in this regard will be greatly appreciated.
Regards
Varun
@ Varun
Sir,
I am out of station and therefore not able to give you the legal reference. But let me know whether the POA given is one or it is separately executed. The problem is that there should not be conflict in the decisions of two persons.
Regards
Adv. Mrs. Mrudula Prasad Chitale
BA,LLB, LLM
http://www.bharatestates.com/blog/index.php/authorcontributor-for-bharatestates-com/
My parents are planning to buy a plot in jaipur. They are planning to take POA from the person who is selling and then do the registry (as it is not yet done for this plot). Kindly point the potential risks during the process and also i want to know if that person will still posses powers after signing the POA.
Regards,
Snigdha
@ Snigdha,
Madam
Pl clarify the query. Who is the owner? Is the owner giving the POA to the purchaser?
Regards
Adv. Mrs. Mrudula Prasad Chitale
BA,LLB, LLM
http://www.bharatestates.com/blog/index.php/authorcontributor-for-bharatestates-com/
Hello Mrudula,
Yes the owner is giving the POA and the land has no registry till date ..so my parents are planning to take the POA from the owner and then getting it registered on their name.
Regards,
Snigdha
Hello Team of BharatEstates,
my father is Indian and is living since 30 years in Europe. He is owner of real estate in India. Due to a quarrel with the neighbours he has given a power of attorney to his brother. He did not know, that this power of attorney givs him a general power of attorney and that he can give the real estates as a present. His brother gave away anything to his wife and now they are the owners of everything. What can we do? Can we change back the present? It was a breach of trust. In Europe there does not exist general power of attorneys. Thanks for your support.
@ Charles
Sir,
Need to see the Copy Power Of attorney Urgently. It seeems he has mis-used the POA. Whether the POA was registered ? Contents of POA are imp. we can ceratinly do something to get back the property.
Regards
Adv. Mrs. Mrudula Prasad Chitale
BA,LLB, LLM
http://www.bharatestates.com/blog/index.php/authorcontributor-for-bharatestates-com/
Dear Team Bharat Estates
My healthy father age 62 owns one of the plot alloted by DDA since 1993. We are five sons to him. The eldest son & youngest son looked after him while the three other sons involved in domestic troubles & troubling him for money. He planned to give this plot to two of his eldest & youngest son in future. The two sons with fathers consent have constructed the plot in 2011 now to one floor with their hard earned money. How can the father safeguard the two sons to give them this property against the future claim of share raised by the three other brothers . My Father is confused in the choices whether to
1. Execute a joint power of attorney(poa) in the name of two brothers
2. Execute a Will – May be challenged
3. Execute a sales deed ( gift) in the name of two brothers – costly stamp duty need to be paid
4 Execute a lease/rent agreement with the two brothers
He is going to give the other three brothers share from his other properties except from this plot.
Plz suggest the solution for him.
Warm regards
Veer Kumar (Youngest Son)
@ Veer
Sir,
What do you mean by DDA ? Making a gift Deed will be more proper. 2% stamp duty on plot value will be attracted.And in the Will he can mention this that the constructed floors are owned by the two sons. Proper documentation needs to be done carefully considering the chances of others raising objections in future.
Regards
Adv. Mrs. Mrudula Prasad Chitale
BA,LLB, LLM
http://www.bharatestates.com/blog/index.php/authorcontributor-for-bharatestates-com/
20 years ago my father gave POA to 2 different people(my uncles). In 2000 my father revoked 1 uncle’s POA thru lawyer in it he also used the language “any other person who has my POA will also be revoked”. My father mailed the doc’s to all local registar offices. However he failed to put in Newspaper Public notice. In 2002 my other uncle used father’s POA and sold some land and removed my father name from other land which they are trying to sell currently. After finding, my father revoked 2nd uncle POA to prevent further fraud. They haven’t sold the land yet and what r the chances for my father to claim his part. Do you have to submit in Public Notice? Did all POA got revoked in 2002? Does revoked POA as any timeline validity or does it gets cancel immediately?
@ Veer
Sir,
In your case your father can execute Gift Deed in their Life Time by paying Proper Stamp Duty, and he can also execute a Will, willing to give the Property as per his wish.
Regards
Adv. Mr. Pankaj Wankhade
B.A. LLB, GDC & A
@ Bran N.
Sir,
You are on the right track get it cancelled immediatly and intimate concern talathi and registrar office and publish the same in newspaper about cancellation.
Regards
Adv. Mr. Pankaj Wankhade
B.A. LLB, GDC & A
http://www.bharatestates.com/blog/index.php/pankaj-m-wankhade-legal-content-contributor
Attractive part of content. I simply stumbled upon your site and in accession capital to say that I get actually enjoyed account your blog posts. Any way I will be subscribing to your augment and even I achievement you access persistently fast.