What is POA? The term "POA" refers to a written legal document signed by one or more individuals (principal) giving explicit authority to an individual or a group of people (agent) to perform their duties in their absence.
Types of PoA:
1. Limited PoA: It grants agents the ability to assume the role of the principal for a specific reason. It could, for instance, allows a person to execute a deed on the other person's property on their behalf when they are not in the country. It typically ends at a time stipulated in the deed.
2. General Power of Attorney - General power of attorney grants agents broad-ranging powers because no specific purpose is mentioned. The agent is empowered solely to perform on behalf of an individual in various situations.
3. Special Power of Attorney: In this situation, the principal has the authority to authorize an agent to perform duties on their behalf in some issues, and limited powers are granted to the agent. For instance, Special power of attorney can be used for signing and executing specific agreements, carrying out specific business-related duties, shutting or running bank accounts, managing purchases or sales of equity and other investments, filing tax returns, and representing the owner before authorities enacted by law.
4. Springing PoA- Similar to an effective power of attorney, the springing power of attorney allows a person's attorney the ability to act for them if they become incapacitated.
In the real estate industry, PoA could be used for the reasons listed below:
1. Exchange, mortgage, sell, collect rent, lease, grant
2. Handle and settle disagreements
3. To perform certain activities required by banks and insurance companies.
4. Sign contracts, deal with bonds, and so on.
Important aspects to be noted on PoA by NRI:
1. Any person over 18 years old and of sound mind may serve as a Power of Attorney and can be appointed as one.
2. Even after a PoA has been granted, the grantor remains in possession of the authority to act on the concerned matter. Therefore, it's not a whole delegation of the original rights but just an authorization granted to someone to take action for them.
3. By entering a date of expiry, the applicant can set the PoA time-bound, which can also be cancelled.
4. If the grantor dies within the time of the PoA, the latter is indefinitely revoked, and their legal heirs will assume the responsibility.
5. It is essential to define in the PoA the purpose of implementing the POA in addition to why the power is granted.
6. A property transaction involving the use of a PoA executed by the grantor requires a thorough analysis. A sale deed may become null and unenforceable even if there's one tiny error in the execution PoA.
7. As an NRI, the person can't be accused or held accountable for the fraudulent act committed by the agent, as long as it's established that the fraud was committed through the NRI's involvement.
The PoA deed is prepared according to the following format:
1. The deed can be prepared online, or a lawyer may be hired to draft it.
2. The deed must be certified by the Indian Embassy, Consulate or Notary within the country.
3. The grantor must sign the deed on all the pages.
4. The deed attested is sent to an identified person with an Indian address via registered mail or courier.
5. The recipient of the deed must register it by the local Sub-Registrar office or the Sub-Divisional Magistrate bureau within India through payment of the applicable fee for registration to the State.
The PoA deed contains the following information:
1. The name, age, international address, Indian location and job of the individual who is executing the deed.
2. The name, age, address, relationship with the principal, father's name and the profession of the person to whom the deed has been executed
3. General or Specific purpose for which the document is executed.
4. When will the PoA be effective
5. Signature of all the necessary parties
Drafting PoA Online:
Many websites help NRIs create a PoA at a minimal cost and in the comforts of home. This can be accomplished in the following manner:
1. Choose the State where you currently reside and begin creating the PoA document.
2. Complete the form and pay payment online
3. Print the document, and then sign it
The PoA can be executed by an overseas person using two ways:
1. Legalization: The signatures by the notary public or the judge before the PoA is signed must be signed by a recognized person from the Indian Embassy or Consulate. Such a POA must be authenticated within three months of receiving the POA in India.
2. Apostalisation: It is also known as super legalization. An apostille is a certificate that authenticates and confirms the seal and signature of the person who signed the document. However, the deed must also comply with Indian laws.
Advantages of Having a PoA:
1. A PoA is a simple method to let someone else take care of financial or legal issues for NRIs while they are away or are otherwise unable to do it themselves.
2. A lasting PoA protects against expensive court cases if the principal cannot act. In this situation, the agent can manage all financial affairs without requiring a guardian or conservator to be appointed by the court.
Disadvantages of Having a PoA:
1. The term of a PoA is terminated at the time of the principal's death. This means that it cannot be an alternative to a last testamentary will or trust that names a representative to take care of the affairs following the person's death.
2. The agent could misuse a PoA as his actions cannot be overseen by anyone other than the principal. If an agent becomes incompetent or disabled, then he will have no one to supervise his activities. The best method to safeguard yourself is to select a person who is trustworthy and responsible.
Procedure to Revoke a Power Of Attorney:
PoA can be revoked for any of the reasons listed below:
1. The grantor might cancel the PoA at any time if they discover any wrongdoings of the agents.
2. The right to revoke it will also be removed when the grantor dies, becomes insane, or is declared insolvent.
3. It can be removed upon mutually agreed conditions between the principal and the representative.
4. It can be cancelled after the specific transaction for which it was authorized is completed. The cancellation of a PoA is executed using the same method it was issued. If PoA was registered at the Sub-Registrar's office, then the grantor must be able to cancel it through that office. In addition, all involved parties must be informed appropriately about the deactivation of the PoA.
A power of attorney should be made after much thought and only to reliable and responsible people committed to keeping your best interests in mind. It will also help when the person knows the law and the financial aspects of transactions and real estate. It is now easy for buyers who aren't careful to fall prey to scams. Constructing a dream home in the most relaxed way possible is essential for everyone. Therefore, it is best to be patient and make choices that will result in a secure future.