Power of attorney for NRI property deals

This is general information, and not legal advice. Rules for stamping and registering a power of attorney are set by the state, and we could not confirm the current Uttar Pradesh figures from an official source. Have a Lucknow lawyer draft yours and confirm the requirements with the sub-registrar before you sign it.

What is a power of attorney for property?

It is a legal document in which you, the principal, authorise another person, the attorney, to act for you on the matters it lists. A good one is narrow. It names the property and states what the attorney may do.

For most buyers, a special power of attorney for one named property is the safer choice.

What should the document say?

It should list each act you allow, because the attorney can do only what it says. Vague wording leads to rejection at the registrar’s office, or to more power than you meant to give.

• Your full details, passport number and overseas address, and those of the attorney.
• The property, with project, tower, unit number and RERA number if known.
• Power to sign the agreement for sale and the sale deed, and to present them for registration.
• Power to deal with the developer, the bank and the society, and to take possession.
• Whether the attorney may deal with a home loan. Check your lender’s own format.
• Any limit, such as an end date, and a statement that no money may be taken in the attorney’s own name.

How do you sign a power of attorney abroad?

Sign it before a notary or at an Indian mission, as your location allows. The steps below are the ones generally used.

1. Have the draft prepared in India, so that it matches local practice and the developer’s needs.
2. Print it and sign it, with witnesses if required, in front of a notary abroad.
3. If your country is in the Hague Apostille Convention, get an apostille. If not, get it attested at the Indian embassy or consulate.
4. Courier the original to your attorney in India, and keep the tracking record.
5. Have it stamped in India within three months of its first arrival, at the office of the collector of stamps. An apostille does not replace this step.
6. Present it as the registrar or developer requires. Ask whether it must also be registered for the use you have in mind.

Stamp duty on a power of attorney varies, and it can depend on who the attorney is and what they are allowed to do. Some states charge more when an attorney may sell. Ask your lawyer for the Uttar Pradesh amount for your wording.

Who should you appoint?

Appoint someone you trust completely, who lives near Lucknow and can reach the offices involved. A close family member is the usual choice.

We suggest keeping this role apart from anyone with a stake in the sale. Your agent, your broker or a developer’s employee should not hold your power of attorney. Lalit can coordinate with your attorney on site visits and on paperwork, and that is a better arrangement than the agent holding your signing power.

What can’t a power of attorney do?

It cannot make your attorney the owner. In 2011, the Supreme Court held in Suraj Lamp and Industries that a power of attorney sale does not transfer title. Ownership of immovable property passes through a registered sale deed.

• Payments should still come from your own accounts, as our NRI buying guide explains.
• It does not change your tax position, so ask your CA about reporting.
• Avoid a resale in which the seller holds only a power of attorney. Check the chain to a registered deed.

How do you cancel a power of attorney?

Sign a written revocation and tell everyone who has relied on the original. Your lawyer will say how to do this formally, including where a registered power of attorney needs a registered cancellation.

• Send notice to the attorney, the developer, the bank and the sub-registrar where relevant.
• Collect the original, if you can.
• Keep proof of the notices you send.

A power of attorney generally also ends on the death of the person who gave it, so an estate plan should not depend on one. Once your purchase is complete, consider revoking it. For the money side, see repatriation and tax basics.