Did You know that Selling Property through GPA is Illegal?
Nov 24, 2018 Legal Guidance
The Supreme Court passed an order in 2011that transferring any property title through general power of attorney (GPA) will Np not be considered as valid. Here are some pointers about GPA.
Types of power of attorney
Power of attorney (PoA) is the right given to a person by someone to execute specific legal as well as financial business on their behalf. NRIs use it commonly to represent someone and execute activities on their behalf.
There are two types of PoA
- A general power of attorney (GPA): This is on a broader aspect, for instance, the representative can pay your utility bill or collect rent in your behalf.
- Special PoA (SPA): This gives specific power to the representative, for instance, on legal aspects in a particular case.
Points to remember
- A PoA must be registered at the Sub-Registrar’s Office for legal validity.
- A PoA is valid until the life of the principal.
- A PoC can be revoked within their lifetime.
- In case of an SPA, it gets revokes on its own when a specific transaction for which it was executed is done.
PoA and the real estate
It is commonly observed that people are transferring property title through GPA in India. For any property title transfer, a sale deed is a must, and the buyer must pay the stamp duty and registration charges. The seller will have to bear the capital gains tax on the transaction. All these can be avoided through GPA, and that’s why it is illegal.
You can also see the use of GPA to sidestep a process: there is a gestational period for an allottee of a government house scheme to sell the property. Besides, GPA has also become a mode to invest accounted money in real estate.
You can also see the use of GPA to sidestep a process: there is a gestational period for an allottee of a government house scheme to sell the property. Besides, GPA has also become a mode to invest accounted money in real estate.
Supreme Court order of 2011
According to this order, “a power of attorney is not an instrument of transfer in regard to any right, title or interest in immovable property”. However, any genuine transactions executed through GPA would be valid. Also, registration of properties that are sold through GPA in banned. The Delhi government has allowed registration in favour of spouses, kids, siblings and any other relative or person of trust by registered owners.
In case you have already purchased a property through GPA
If you own property without a sale deed, then in that case you are not a legal owner of the property. Without a clear property tile, in future, it would become almost impossible to sell the property.
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