Everything an NRI must know About Power of Attorney in India
Jul 24, 2019 Legal Guidance
Real estate of India has always been a gold mine for NRI investors. The hefty return on selling the property after a few years is higher than any other country. However, there are certain things every NRI investor should know about investing in real estate of India. The power of attorney is one such thing that most NRIs are not aware of.
In the absence of PoA, NRIS might find it difficult to manage their property in the country. PoAs assists them to manage their wealth in India.
We discuss it here:
1. Physical presence at the time of deal execution:
It is not required for the NRI buyer to be physically present at the time of deal execution. However, they need to execute a power of attorney which can be done from the place of their residence. The NRI must get the document executed in the presence of a public notary and then get it authenticated by an official of the Indian Embassy in that country.
Another required document is called apostille. This would verify the seal and signature of the person who authenticated the PoA. Such PoA needs to be stamped within three months from the date of receipt of the PoA in India.
2. Registration:
The registration of the PoA is mandatory under section 48, Section- I of Indian Stamp Act. Notarised PoAs are not enough; it needs to be properly registered.
3. Selling of property:
In Indian real estate, PoA can be used to carry out renting, buying, leasing, borrowing, dispute settlement. However, the PoA cannot be used to sell a property in India. It is illegal. To sell a property, the NRI seller has to be physically present at the time of execution of the deal.
4. Revoking a PoA:
The legal validity of the PoA is until the life of the principle. If the purpose of the PoA has been resolved, then the person can revoke the PoA. In case the principle is declared insolvent, then the PoA will stand invalid. To revoke the PoA, the principle must follow the same suit as they did while authorizing the power of attorney i.e., go to the sub- registrar’s office with two witnesses to get it revoked.
5. Accountability:
The person cannot be held responsible if the legal representative commits a fraud using the PoA if the crime was committed without their knowledge. The principle will have to prove it in the court of law that they were not involved or had any prenotion of the fraud committed by the authorized person.
In the absence of PoA, NRIS might find it difficult to manage their property in the country. PoAs assists them to manage their wealth in India.
We discuss it here:
1. Physical presence at the time of deal execution:
It is not required for the NRI buyer to be physically present at the time of deal execution. However, they need to execute a power of attorney which can be done from the place of their residence. The NRI must get the document executed in the presence of a public notary and then get it authenticated by an official of the Indian Embassy in that country.
Another required document is called apostille. This would verify the seal and signature of the person who authenticated the PoA. Such PoA needs to be stamped within three months from the date of receipt of the PoA in India.
2. Registration:
The registration of the PoA is mandatory under section 48, Section- I of Indian Stamp Act. Notarised PoAs are not enough; it needs to be properly registered.
3. Selling of property:
In Indian real estate, PoA can be used to carry out renting, buying, leasing, borrowing, dispute settlement. However, the PoA cannot be used to sell a property in India. It is illegal. To sell a property, the NRI seller has to be physically present at the time of execution of the deal.
4. Revoking a PoA:
The legal validity of the PoA is until the life of the principle. If the purpose of the PoA has been resolved, then the person can revoke the PoA. In case the principle is declared insolvent, then the PoA will stand invalid. To revoke the PoA, the principle must follow the same suit as they did while authorizing the power of attorney i.e., go to the sub- registrar’s office with two witnesses to get it revoked.
5. Accountability:
The person cannot be held responsible if the legal representative commits a fraud using the PoA if the crime was committed without their knowledge. The principle will have to prove it in the court of law that they were not involved or had any prenotion of the fraud committed by the authorized person.
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