By granting some attorney's (PoA) power, they are given the right to perform on their behalf certain specific legal and financial businesses. For instance, it is prevalent custom among NRIs to offer PoA to someone they believe to portray them to perform out their business in their nation of source as traveling commonly is inconvenient for them. People also appoint a PoA within the country to act as their representatives in the event that they are unable to take the physical exertion due to old age or disability. For someone active who has countless property — entrepreneurs or leaders, for instance, who always have too much on their tray and can hardly be anticipated to settle, say, their power charges — giving a PoA is nothing less than a requirement.
"Power of attorney is a legal tool that makes it easy for individuals who otherwise may not be willing to do company. A PoA is of two types, an attorney's general power and a special attorney's power. What's different from each other?
"While a GPA gives a representative broad powers, an SPA talks on a specific act that the representative can perform on the principal's behalf. You can pay your utility bills, collect rent on your behalf, manage and settle disputes, perform all bank-related work as your representative, "Yadav says.
"The principal grants the attorney specific powers through an SPA. If, say, you guide the SPA to behave as its legal agent in a specific situation, the individual will only be allowed to portray you in that specific situation.
To obtain legal validity, PoA must be registered with the Sub-Registrar's Office. Another significant item to notice here is that a PoA stays only applicable until the principal's death. One can also revoke the PoA in their lifetime. Once the specific transaction for which it was executed is completed, an SPA will be revoked on its own.
Having grasped the legality of the PoAs concerned, it is now apparent to us that the transition of land rights is not a legitimate tool. Selling property through GPA, however, had become common practice across Indian cities, both the buyer and the seller, due to the monetary benefits it offered.
Typically, for the transfer of property titles, a sales deed must be carried out, after which the buyer must pay stamp duty and registration fees. Also, the vendor will have to bear the transaction's capital gains tax responsibility. These charges are avoided by transferring property title through a GPA.
"From the point of view of sellers, a GPA allows the transaction to be carried out even if they do not have clear property titles. Indeed, GPA is their only option. They can afford a property at far cheaper rates than the market price from the buyers ' perspective. They may also hold a property that they may not otherwise use this method.
"Legally, without turning land use, an agricultural land could not be purchased for housing reasons. Most landowners buy their shares of property without entering into what they call the legal transformation problem and buy their shares of property through GPA.
Other legal restrictions prompt property owners to engage in GPA sales. There is a specified gestation period in most government housing schemes (DDA, Mhada, etc.) where units are allocated on a lease-hold basis before the allottees are unable to sell the property to another party. Such units are often transferred via a GPA to sidestep this process. GPA was also seen as a means of investing in real estate paid for cash. In some instances, household employees confer ownership privileges through GPA.
Naive homebuyers often fall prey to fraud and invest in properties without understanding the illegal traction involved.
The top court ordered municipal bodies not to register / mutate properties on the basis of these documents, stating that "an attorney's power is not an instrument of transfer in respect of any right, title or interest in immovable property." However, the SC said genuine GPA transactions would be valid. "Nothing stops impacted sides from obtaining licensed conveyance documents to finish their name. Such operations may also be used to acquire specific performance or to protect ownership in accordance with Section 53A of the Transfer of Property Act," the SC said.
States prohibited the register of assets purchased through GPA following the command. "The decision of the court will help to curb the circulation of black money in the real estate sector, where titles are manipulated, to some extent. In addition, it will affect many property transactions where prices are rounded off." Following the imposition of a blanket prohibition on registering of such assets in 2012, the Delhi government permitted enrollment by licensed holders for the benefit of spouses, children, daughters, siblings, siblings and any other parent or trust individual.
You may be in the "possession" of the property, but you will not be its legal owner in the absence of a registered sale deed. In the absence of clear property tiles, selling the property would also become nearly impossible in the future, unless you do it through a GPA, prolonging the illegal course of action.
You would also find it impossible to get bank financing apart from the above-mentioned issues. "Banks do not lend money to property transactions performed through GPA as a standard practice. Clear sheets of ownership are the first and foremost necessity for companies to loan cash.
By providing a GPA, they can be made responsible for managing their property, managing rented property, paying utility bills, and acting as their representative in transactions related to home loans. You can also authorize a lawyer to enroll your assets via a GPA.