Property is directly-linked to the General Power of Attorney and this legal document is often used to sell-off the property. But, before finalizing the deal via this option, you must know if buying a property through the General Power of Attorney is a wise decision or not. So, go through this blog and find out the same.
1. What is a General Power of Attorney?
Commonly known as GPA, this is the right to carry out a particular financial or legal business on behalf of a person in case he/she can’t make a physical presence to sign for a property deal. The General Power of Attorney is particularly used by the NRIs [Non-Resident Indians] to complete the transaction in the Indian real estate market and this legal document is also used by the person(s) with physical inability.
2. Supreme Court Judgement
In 2011, SC i.e. the Supreme Court of India has clearly said that transferring property through GPA is invalid. The court has categorically said that the General Power of Attorney is not an instrument of transfer in regard to any right, title and interest in an immovable property. The Supreme Court has directed the municipal bodies to not to register or mutate any property through the GPA documents. But, the honest transactions carried out via this legal document will stand valid.
3. Is Registration of General Power of Attorney required?
GPA does not have an indefinite validity and thus it is compulsorily registered with the office of Sub-registrar as the same is said legal only after the completion of this process. A person has the right to revoke the General Power of Attorney any time he/she wishes to withdraw the right to acquire from the other person.
Also Read : NRI Buyers: Know Basics About Power Of Attorney
4. Is it Possible to sell Property with a Registered GPA?
No. A person does not have the right to sell the property even with a registered GPA as this legal document only initiates the right to complete the task/duties assigned by the property owner. The recent order passed by the Hon’ble Supreme Court also clears that no property can be sold via the General Power of Attorney.
5. GPA and Indian Real Estate Sector
A lot of technicalities are involved in this, but similar to the regular property transactions here also the buyer has to pay the stamp duty and registration fee to the Government while the seller can avail the capital gains on the deal.
6. What will happen if Property is registered through GPA?
A property purchase through the General Power of Attorney will be said invalid if the transaction is closed in the absence of sale deed. The financial institutions [Banks] do not offer financial assistance for buying a property with a sale deed and if you have bought an asset without this document then the same cannot be sold.
7. Use of General Power of Attorney
This is a legal document to manage property rent and utility bills while being the active custodian of the property. A person is also said to be the representative in the case of a home loan.