What is power of attorney?
Also called: POA, mukhtarnama, special power of attorney, SPA
With a power of attorney, you authorise someone else to act for you, for example to sign a sale deed, appear before the sub-registrar or deal with a bank. It gives authority to act, not ownership.
The person giving the power is the principal and the person receiving it is the attorney or agent. For property, a special power of attorney is limited to named acts on a named property, while a general power of attorney covers a broad range of dealings. The Powers of Attorney Act, 1882 is a short statute; most of the working rules come from the Contract Act, the Registration Act and each state's Stamp Act.
NRIs rely on them constantly. A software engineer in Toronto buying in Hyderabad can't fly in for every step, so she signs a POA in favour of her brother. Signed abroad, it has to be notarised and apostilled or attested at the Indian consulate, and then stamped in India within three months of being received here, before a sub-registrar will act on it. If the attorney will sign a sale deed, most registration offices want the POA itself registered.
Two rules decide whether a POA is still any good. It dies with the principal: under Section 201 of the Contract Act the agency ends on the principal's death or insanity, so a sale signed a week after the owner died is void. And the principal can revoke it at any time, unless it's coupled with an interest, the narrow exception in Section 202.
Stamp duty varies sharply. Maharashtra charges duty at conveyance rates on a POA given for consideration that authorises the attorney to sell, precisely because such POAs were once used to dodge duty on sales. A POA to a close relative without consideration costs far less.
An NRI in Dubai who wants to sell her flat in Kakkanad, Kochi signs a special POA for her father at the Indian consulate. He has it stamped in Kerala within three months of receiving it and registers it before signing the sale deed on her behalf.
Buyers accept an attorney's signature without confirming that the owner is alive and hasn't cancelled the POA. Speak to the owner directly on a video call and check the sub-registrar's records for a registered revocation.
Questions people ask about power of attorney
Can a POA holder sell the property to himself?
Only if the POA clearly allows it and the owner knows the terms. Under Section 215 of the Contract Act, an agent who deals on his own account without the principal's consent can have the deal set aside.
Does a power of attorney need to be registered?
It depends on the state and the purpose. A POA authorising the sale of immovable property must be registered in several states, and elsewhere sub-registrars usually want it registered or authenticated before they accept a deed signed under it.