Power of Attorney and Its Use in Real Estate
Feb 21, 2017 Real Estate News
Many times we come across legal terms whose meaning we do not simply understand that easily. However, it is important to get to the root of every such term in order to be secure both financially and mentally. One such term that is commonly used and has great significance in legal circles is the Power of Attorney.
So let us today discuss what exactly Power of Attorney means and how carefully it should be handled.
More about Power of Attorney:
In simplest terms, Power of Attorney (POA) is the authority to act for another person in specified or all legal or financial matters. The person who is given this responsibility is termed as the agent and he/she has the powers to sign on behalf of the person (Principal) who has given this responsibility to the agent. The agent has the exact same legal authority as that of the principal and he/she can enter any legal issues. For a valid Power of Attorney, the principal needs to draft a document specifying another person as an agent. The Power of Attorney came into existence on 1st of May 1882 under the Power of Attorney Act, 1882. The POA Act is applicable throughout India except for the state of Jammu and Kashmir.
Significance of Power of Attorney:
A power of attorney gives total authority to a person to take decisions on one's behalf. So, it is of utmost importance to give your power of Attorney to a trusted aide only as the said person will be totally responsible for your future decisions. Also, do not get confused between a will and a Power of Attorney. A will is a legal document that comes into existence only after the person is dead. But in the case of POA, it exists in the person’s lifetime and ceases when he/she dies.
Various types of Power of Attorney:
Power of Attorney is an important document used in Real estate sector for a variety of demands such as sell, lease, grant, mortgages,exchanges etc. POA is also used to perform tasks associated with banks, bonds, contracts etc.
Regulations in Power of Attorney:
Any individual who is eligible to enter into a contract with another person can draft a Power of Attorney.It should clearly mention the powers principal wishes to assign to the agent. Then, the principal needs to file an affidavit will all the necessary documents to be verified by the court. If everything gets verified, the court will sanction the Power of Attorney. The same document then needs to be notarized by a notary advocate whose task is to declare that the principal was competent while signing the document. The last step in this process is to authenticate the Power of Attorney document by the registrar as per Registrations Act,1908.
How to Revoke Power of Attorney:
So let us today discuss what exactly Power of Attorney means and how carefully it should be handled.
More about Power of Attorney:
In simplest terms, Power of Attorney (POA) is the authority to act for another person in specified or all legal or financial matters. The person who is given this responsibility is termed as the agent and he/she has the powers to sign on behalf of the person (Principal) who has given this responsibility to the agent. The agent has the exact same legal authority as that of the principal and he/she can enter any legal issues. For a valid Power of Attorney, the principal needs to draft a document specifying another person as an agent. The Power of Attorney came into existence on 1st of May 1882 under the Power of Attorney Act, 1882. The POA Act is applicable throughout India except for the state of Jammu and Kashmir.
Significance of Power of Attorney:
A power of attorney gives total authority to a person to take decisions on one's behalf. So, it is of utmost importance to give your power of Attorney to a trusted aide only as the said person will be totally responsible for your future decisions. Also, do not get confused between a will and a Power of Attorney. A will is a legal document that comes into existence only after the person is dead. But in the case of POA, it exists in the person’s lifetime and ceases when he/she dies.
Various types of Power of Attorney:
- General Power of Attorney: The agent has the legal authority to carry out all the legal activities and make decisions on behalf of the principal.
- Special Power of Attorney: It is same as GPA although here the agent has only a few decisions to make on behalf of the principal. While drafting the POA, the principal states the activities agent can perform on his/her behalf. Also, the agent’s POA ceases on the completion of the transactions.
- Durable Power of Attorney: This type of Power of Attorney is valid for a lifetime unless it is terminated. A certain clause in the POA states that the agent has powers even if the principal is incapacitated.
Power of Attorney is an important document used in Real estate sector for a variety of demands such as sell, lease, grant, mortgages,exchanges etc. POA is also used to perform tasks associated with banks, bonds, contracts etc.
Regulations in Power of Attorney:
- The agent needs to strictly adhere to the activities mentioned in the POA document. He/she cannot violate the scope of power assigned to them in POA.
- In case an agent commits a fraudulent activity, the principal cannot be sued in such cases.
Any individual who is eligible to enter into a contract with another person can draft a Power of Attorney.It should clearly mention the powers principal wishes to assign to the agent. Then, the principal needs to file an affidavit will all the necessary documents to be verified by the court. If everything gets verified, the court will sanction the Power of Attorney. The same document then needs to be notarized by a notary advocate whose task is to declare that the principal was competent while signing the document. The last step in this process is to authenticate the Power of Attorney document by the registrar as per Registrations Act,1908.
How to Revoke Power of Attorney:
- The principal can revoke a Power of Attorney.
- After the death of the principal.
- Mutual agreement between the principal and the agent.
- After the completion of the transaction for which the agent was appointed.
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