NRIs can register property from abroad - Power of Attorney
A non-resident Indian (NRI) is permitted to purchase and sell property in India subject to complying with the requirements imposed by the Reserve Bank of India (RBI).
Having complied to the requirements the big question is - does an NRI need to be physically present in India while purchasing or selling a property? The answer is No as the same can be easily facilitated by an NRI(non-resident Indian) representative in India holding power of attorney to act on their behalf.
What is POA (Power of Attorney)?
Power of Attorney is an authorization. It gives power or authority to a person, to act for another. The scope of power or authority is as contained in the deed. The person who gives the power is known as the “Donor” or “Grantor” or “Principal.” The person in whose favour it is granted is known as the “Donee” or “Grantee” or “Agent” or “Attorney.”
The two major types are General Power of Attorney and Special Power of Attorney.
A General Power of Attorney is used when the Agent is empowered to undertake many transactions on behalf of the Principal. A Specific Power of Attorney is granted when the Agent is to undertake specific transactions.
Execution of Power of Attorney by an NRI
The power of attorney should be executed on a stamp paper/plain paper as the case may be as applicable in the country in which the power of attorney is executed.
An NRI needs to sign the power of attorney before a consulate officer or a notary (available at UPS stores in US or any Bank) in the country of his residence. The signature on the deed has to be attested by the consulate officer or notary.
It is advisable to get the power of attorney attested by the Indian consulate as that is considered to be more authentic. Also in case of builder transfer some of the builders specifically ask for the POA to be signed in front of the consul officer in the Indian Embassy. A sample requirement from a builder is listed below:
“Special Power of Attorney in name of the Person who will be signing the agreements and other documents on his/her behalf. The Power of attorney has to be signed in front of the consul officer in the Indian Embassy of the city n country where he/she is located. Affixing photograph and the left thumb impression along with his/her signature is essential. You can then send the POA to India, where it has to be adjudicated. After the adjudication process, the POA is ready for use in India for buying/ taking possession of any property.”
It is important to sign on every page. Most of these deeds are signed only in the last page. This is not accepted, generally, in India.
At times, the date on the document and the date of attestation differ. This is never accepted. NRI should send a covering letter or note with a date on it. This will help in computation of time of three months for adjudication.
The PoA (Power of Attorney) then needs to be sent to India and should be presented for adjudication within three months.
Adjudication of the PoA(Power of Attorney)
Adjudication is a process of registering PoA document in the registrar's office, to be accepted as a registered PoA. Once adjudicated the PoA cannot be misused by altering it.
Once it is registered, the document will be with the registration department and copy of the same can be obtained even after several years of actual transaction to verify its authenticity.
This is like registration of sale deed. It should be registered in the sub-registrar office of jurisdiction and it is the same registrar office where the property will be registered.
The stamp duty payable for a Power of Attorney varies from State to State in India. It is also determined on the basis of contents of the deed.
The power of attorney has to be attested by two or more independent witnesses. The deeds of the agent will be binding on the grantor.
Usually, the power of attorney can be revoked, subject to certain conditions. It is automatically revoked in the event of death or bankruptcy of the grantor.