This article addresses accounts related to the power of attorney with references to the general and special power of attorney in the real estate zone.
Power Of Attorney for Property in India
Introduction
In many instances, when an owner of a property is either unavailable to make decisions for his property or is unable to come to a proper conclusion; he or she hires or appoints an experienced person who could guide him through the entire procedure. This experienced person is usually a lawyer who is addressed as the Power of Attorney (POA).
The attorney plays various roles for the person who hires him and in real estate too, this attorney can be appointed to bear witness or be a legal representative during transaction or sale deeds of the owner’s property. The role of the Power of Attorney can be categorized in two ways-
- General Power of Attorney, and
- Special Power of Attorney.
Power of Attorney is granted to the agent in a legal document which acts as a contract between the agent and the property holder.
General Power of Attorney
According to this legal document, the owner of a property who is also referred to as the “principal” nominates one or more persons who are called attorneys to act on their behalf on various occasions. These occasions include business dealings, financial decisions, legal choices, medical preferences, buying or selling of real estate properties, etc.
The rights shared by the attorney on behalf of the principal are governed under the provisions stated in the Power of Attorney Act of 1882 and the Contract Act of 1872.
Special Power of Attorney
As the title suggests, a special power of attorney is a legal document that limits the general powers which are usually shared by an attorney. A legal contract is signed between the principal and the attorney where the principal specifies the fields in which the attorney can act on behalf of the principal.
Examples of special power of attorney include the nominees such as your spouse or children whom you elect for managing your bank account in your absence, or medical decisions and so on. Agents willing to serve as special power of attorney are usually appointed as real estate power of attorney.
Role of Power of Attorney for Rental Property
Given below are some important pointers to keep in mind before nominating a power of attorney for a rental property:
- The legal document signed as a contract between the principal and the agent will empower the agent with the special power of attorney.
- The attorney could rent out a property or put it to lease on behalf of the owner. This can be done in both the absence and presence of the owner.
- The attorney is bound to act as per the terms and clauses stated in the contract which thus, limits the rights and duties of the agent.
- No additions or deductions can be made by the individual preference of the attorney.
- Moreover, the paperwork regarding the sale deed along with the transaction details is to be carried out legally and in the knowledge of the owner.
- Receipts showing rental value, deposited amount as security and other assets involved must be addressed in the office of the sub-registrar.
The power of attorney not just takes care of the legal paperwork in the absence of the owner but also looks after the property and interests of the tenants. This is done by regular surveillance and inspection of needs, maintenance of the property and the surrounding, addressing the tenant in case of dispute and also dealing with them in case of turmoil.
Caution
To avoid any agent or individual to take undue advantage from your property in your absence, you should always be prepared beforehand. Therefore, while appointing or nominating an individual as a power of attorney to act on your behalf, make sure you follow the necessary proceedings mentioned below:
- Make sure the contract or deal you make with the agent is written on a legal paper bearing a stamp duty.
- Write all the rights and powers which you want your agent to exercise on your behalf. Also mention the limitations you want to put on the attorney.
- Re-read and check all the conditions before signing the contract.
- Follow the proper format which will validate your document to be a legal contract. You can always surf the internet for reference or seek help from a local professional estate-planner.
- Your contract should specifically mention the duration for which the agent is empowered with the rights and responsibilities to act on your behalf.
- For better security, you can also record the entire procedure and file it in a court or government office to validate your contract.
FAQs
Q1. Whom should you appoint as your attorney?
Ans. Since the power of attorney grants special powers to individuals, you should always consider appointing or nominating a reliable person as your power of attorney who will not misuse your rights and powers.
Q2. Can you nominate a family member as a power of attorney?
Ans. Yes, you can make a family member your power of attorney but in real estate, it is usually an experienced lawyer who takes care of the transaction and sales deeds of your properties.
Also read : Power of Attorney and its relevance to NRIs
