Introduction

A Power of Attorney (PoA) enables a property owner to authorize another person to act on their behalf in real estate matters. This arrangement becomes useful when the owner cannot remain physically present during negotiations or registration. The PoA framework flows from the Powers of Attorney Act, 1882 and the Registration Act, 1908. A PoA does not transfer ownership of property. Title passes only through a registered sale deed. The Supreme Court clarified this principle in Suraj Lamp & Industries Pvt Ltd v. State of Haryana. The Court held that property transactions based solely on General Power of Attorney do not convey ownership rights. A legally registered conveyance deed remains mandatory.

What Type of Power of Attorney Is Suitable for Property Transactions?

Two main types of PoA apply in real estate matters. A Special Power of Attorney limits authority to a specific property and transaction. It defines the exact powers granted to the agent. This format reduces misuse and offers greater security. It is widely preferred for property sales. A General Power of Attorney grants broader authority across multiple matters. However, courts have restricted its misuse in property dealings. A GPA does not create ownership rights. Without a registered sale deed, the transaction remains incomplete in the eyes of law. For property sales, a carefully structured Special PoA provides better clarity and legal certainty.

What Details Should Be Included While Drafting a PoA for Property?

A well-drafted PoA strengthens enforceability. The document should clearly mention the principal’s and agent’s full names, residential addresses, and identification details such as PAN and Aadhaar numbers. It should provide an accurate description of the property. Survey number, municipal number, location, boundaries, and area must be clearly stated. Ambiguity may lead to disputes. The document should specify the powers granted. These may include negotiating price, signing the agreement to sell, presenting documents before authorities, executing the sale deed, and receiving consideration. The duration of authority and revocation terms should also appear in the document. Clear limits reduce risk and prevent unauthorized acts. Stamp duty applies as per state laws. The document should be executed on appropriate non-judicial stamp paper. Two witnesses generally sign the document at the time of execution.

What Is the Process for Execution and Registration?

The execution process requires careful compliance with statutory provisions. The principal signs the PoA in the presence of two witnesses. Notarization may add evidentiary value, but registration becomes mandatory when the PoA relates to immovable property transactions under Section 33 of the Registration Act, 1908. The principal appears before the Sub-Registrar for registration. Identification documents, passport-sized photographs, and property papers are submitted. After verification, the authority records the document. For NRIs, the PoA may be executed abroad. It may be attested before the Indian Embassy or Consulate. Once received in India, it requires stamping within the prescribed time and registration within four months. Only after proper registration may the agent legally execute the agreement to sell and later the final sale deed.

How Does the Agent Use the PoA in a Property Sale?

The authorized agent may negotiate terms with the buyer. The agent may sign the agreement to sell, which outlines sale price, payment schedule, and completion timeline. Thereafter, the agent may execute the final sale deed before the Sub-Registrar. Stamp duty and registration fees are paid as per state law. Once the sale deed is registered, ownership transfers to the buyer. The buyer should verify the authenticity of the PoA. Due diligence includes confirming registration, checking for revocation, and ensuring clear title before proceeding.

What Are the Key Limitations and Risks?

A PoA remains revocable unless coupled with consideration in specific circumstances. The principal may cancel the authority by executing a revocation deed and registering it. Notice should reach the agent and concerned authorities. If a sale was completed before revocation, it generally remains valid. However, any act done after cancellation may face legal challenge. Unregistered PoA documents carry risk in property transactions. Courts have repeatedly rejected GPA-only sales that attempt to bypass formal conveyance requirements. The ruling in Suraj Lamp & Industries Pvt Ltd v. State of Haryana reinforces this legal position. NRIs involved in property sales should also consider tax implications such as capital gains and TDS compliance.

Conclusion

Property transactions involve significant financial value. Errors in documentation may cause prolonged disputes. A legally structured PoA aligned with statutory requirements ensures smoother execution. Clear drafting, proper stamping, mandatory registration, defined powers. These elements protect both principal and buyer. When used correctly, a Power of Attorney functions as a practical legal instrument. It facilitates real estate transactions without compromising ownership rules or statutory safeguards.