NRIs are one of the largest contributors to India’s real estate Industry. While staying abroad, NRIs are actively looking to invest in the Indian realty markets that is further fueled by the positive outlook of Indian realty & a depreciating Indian Rupee.
However, since NRIs are not physically present to make an investment, there involvement in the Indian realty markets are not devoid of challenges. To bridge the gap, the Power of Attorney (POA) can be an important document
What is a Power of Attorney?
POA is a legal document authorizing someone else to represent a person and perform certain acts or functions on once behalf. In legal terms it is a written document in which one person (the principal) appoints another person to act as an agent on his or her behalf, thus conferring authority on the agent to perform certain acts or functions on behalf of the principal.
Use of POA in Real Estate:
In Real Estate a power of Attorney is executed to undertake following activities
- Buying & registering the property
- Perform actives related to Home Loan execution
- Executing rent contact & rent collection
- Manage & settle matters related to real estate
Two types of Power of Attorney used in Real Estate Transactions:
- General POA / Registered POA
This is a broader POA. In this the Agent has the right to carry-out all legal transactions on behalf of the principal.
- Special Power of Attorney
This power of attorney is time and activity bound. It is generally executed for a specific purpose and ceases to exist once the purpose is achieved.
Execution of POA by an NRI
The POA can be executed on a stamp paper or plain paper. NRIs need to sign the POA before a consulate officer or a notary. The signature on the deed then needs to be attested by the consulate officer or notary.
It is recommended to get the POA attested by the Indian consulate which gives it more credibility. The POA then should be sent to India, where it will be presented for adjudication within three months.
Adjudication of the POA (Power of Attorney)
Adjudication is the process of registering the POA document in the registrar’s office in order for it to be accepted as a registered POA. This way the POA cannot be misused by altering it, since the document will remain with the registration department (The stamp duty to be paid for the POA registration varies for each state in India). A copy of the document can be obtained even several years after the actual transaction, if someone wants to validate and verify its authenticity.
A sample image of a power of attorney –
