Deepika is currently in the States and is completing the procedure to come back to India permanently by the end of this year. She was in India for a little while and had chosen a property to buy for residential purpose. Now she has gone back and won’t be coming before completing the formalities to shift base to India which could take some time, hence she has handed over the Power of Attorney to her brother who would be handling the rest of the formalities regarding the property and building the residence.
PoA refers to a written legal document executed by one or more persons (principal) giving explicit authority and empowerment to one or more persons (agent) to act on their behalf in their absence.
Types of PoA:
1. Limited PoA- It gives the agent the power to act in place of the principal for a very limited purpose. For example, it could give Deepika’s brother the right to sign a deed to property for her on a day when she isn’t in the country. It usually ends at a time specified in the document.
2. General PoA- It gives wide-ranging powers to the agent as no specific purpose is mentioned. The agent is given powers only to act on behalf of the principal in a wide range of matters.
3. Special PoA- In this case, the principal authorizes the agent to act on his behalf in specific matters only and limited powers are granted to the agent. For eg, SPAs may be used for the purpose of (including but not limited to) negotiating and executing specific agreements, performing specific business-related tasks, closing or operating bank accounts, undertaking sale or purchase of equities and other investments, filing tax returns, or representing the principal before the statutory authorities.
4. Durable PoA- It can be general or limited in scope, but it remains in effect after Deepika becomes incapacitated. Without a durable power of attorney, if she becomes incapacitated, no one can represent her unless a court appoints a conservator or guardian. A durable power of attorney will remain in effect until her death unless she rescinds it while she is not incapacitated.
5. Springing PoA- Like a durable power of attorney, a springing power of attorney can allow Deepika’s attorney to act for her if she becomes incapacitated, but it does not become effective until she is incapacitated.
In real estate, PoA could be used for the purposes mentioned below:
3. Performing activities required by banks, insurance companies
4. Enter into contracts, deal with bonds, etc.
Important points to note on PoA by NRI
1.Any person who is above 18 years of age and of sound mind can be a PoA and appoint one.
2. Even after a PoA is granted, Deepika will still have the power to act on the concerned matters herself. Hence, it is not a complete delegation of the original rights, but only an authority given to someone to act on her behalf.
3.By inserting a date of expiry, she can make it time bound and it can also be revoked.
4. If Deepika dies during the term of a PoA, the latter stands automatically revoked and her legal heir will take over.
5. It’s also important to state clearly in the PoA the exact purpose for the execution of a POA, as well as the circumstances due to which the power is being granted.
6. A property transaction through a PoA executed by Deepika will call for in-depth analysis. A sale deed can be declared null and void even if there is a small error anywhere in the execution of PoA.
7. As an NRI, Deepika can’t be sued or held responsible for the fraud of the representative, unless it is proved that the fraud was done in connivance with her.
Deepika is staying outside India and has properties and financial transactions within India and it is not possible for her to be physically present all the time in the country to deal with the same; therefore she has given the power to transact and deal with the properties, banking and tax payments to her brother who is trustworthy and reliable person who resides in India and will take care of the dealings in her absence in an efficient manner.
A PoA deed is drafted in the following manner:
1. The deed can be drafted online or a lawyer can be hired to draft the same.
2. The deed needs to be attested by the Indian embassy or Consulate or Notary in the country.
3. The deed should be signed in all the pages by the Grantor, the person who makes the deed.
4. The attested deed is then sent to a known person with an Indian address by registered post or courier.
5. Finally the person to whom the deed is sent should get it registered from the local Sub-Registrar office or Sub-Divisional Magistrate office in India by paying the appropriate registration charges applicable in that State.
The PoA deed includes the following details:
1. The name, age, foreign address, Indian address and occupation of the person making the deed
2. The name, age, address, relation with the principal, father’s name and occupation of the person in whose favour the deed has been made
3. General or Specific purpose for which the deed is being made
4. When exactly the PoA comes into force
5. Signature of all required parties
Drafting PoA Online
Many DIY online sites like Quicklaws.com, Legaldesk.com help NRIs in preparing a PoA with minimum cost and without leaving the comfort of one’s home. It can be done in the following way: 1. Select the state in which you’re currently residing and start preparing the PoA document
2. Fill the form and make payment online
3. Print the document and register it
Deepika can also execute a PoA from the USA or any residing country through the Indian Embassy/ Consulate. A PoA can be executed from abroad in two ways:
1. Legalisation: Signatures of the notary or judge before whom the PoA is executed are required to be authenticated by a duly accredited representative of the Indian Embassy or Consulate. Such a POA needs to be stamped within three months from the date of receipt of the POA in India.
2. Apostalisation: Also known as super legalisation, apostille is a certificate which confirms and verifies the signature or seal of the person who authenticated the document. However, this deed, too, needs to comply with Indian laws.
Advantages of Having a PoA
1. A PoA is an easy way to have another person handle legal or financial matters for NRIs when they are away or otherwise unable or incompetent to handle it themselves.
2. A durable PoA is a protection against costly court proceedings in the event the principal become incompetent. In that situation, the agent can handle any financial affairs without the need for a guardian or conservator being appointed by a court.
Disadvantages of Having a PoA
1. A PoA ends at the principal’s death. Therefore, it is not a substitute for a last will and testament or a trust that designates a representative to handle the affairs upon his/her death.
2. A PoA can be abused by the agent because there is no oversight of his activities by anyone other than the principal. If one become incompetent or incapacitated, the agent will have no one overseeing his actions. The best way to protect oneself is to choose someone who is reliable, responsible and trustworthy.
Procedure to Revoke a Power Of Attorney PoA can be revoked because of the following reasons:
1. Deepika may revoke the PoA during her lifetime if she finds any misdeeds on behalf of the agent.
2. It will also be revoked if she dies or becomes insane or is declared insolvent.
3. It can be revoked on mutually agreed terms between the principal and the representative.
4. It will be revoked when the specific transaction for which it was executed has been accomplished.
Revocation of PoA is done in the same manner in which it was executed. If the PoA was registered with the Sub-Registrar, she will have to get it cancelled from the same office. Also, all the concerned parties need to be duly informed about the cancellation of the PoA.
Power of Attorney should be given after much deliberation and only to trustworthy and responsible individuals who have your best interests at heart. It will also help if the person is street smart and understands transactions related to finance and property. Nowadays it is easy for naive buyers to fall prey to frauds. One would like to build their dream house in the most stress free manner possible. So it’s better to take your time and make decisions which would lead to a secure future.