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Power of Attorney in India for Selling Property
Property

Power of Attorney in India for Selling Property

NRIs use Power of Attorney (‘POA’) as an instrument to appoint an agent/attorney to help them sell their properties in India. NRIs find it difficult to come to India and sell their property, and hence, the concept of a power of attorney exists. A power of attorney authorizes its holder to enter into transactions and take decisions on behalf of the actual owner of the property. 

Special Power of Attorney for Purchase of Property: India Format

 

You can find the format of a power of attorney here,. You should draft a POA on a green stamp/bond paper or a non-judicial stamp paper of INR 100. The NRI should authorise the power of attorney himself and the Indian Consulate in the country of residence. Once authorised, the NRI should send a power of attorney to the sub-registrar’s office and relevant witnesses, identity proofs, and photograph copies.

 

 

You should include certain clauses in a PoA to ensure that no loopholes could pose a threat to the NRI/owner/principal in case of a dispute. Some of these clauses are:

 

 

  • Full details of the parties, including relevant information such as name, age, address, occupation, etc.

  • The reason for entering into this agreement (sale or purchase of property by the NRI in India)

  • Termination clause to ensure that the power is not misused beyond the fulfillment of the objective of this agreement.

  • The clarity in the specific powers granted to the agent and the attached responsibility.

 

 

Power of Attorney by NRI to Buy Property in India

 

 

NRIs often purchase property in India for investment purposes or to have a visiting home/holiday home. However, most NRIs do not have the time to come to India to execute the Sale Deed/Agreement for Sale transaction. Therefore, a power of attorney for purchase of property by an NRI facilitates sale transactions legally. Moreover, NRIs would require a special power of attorney to execute a transaction. Through a general power of attorney, no NRI would be able to sell or purchase property in India. 

 

 

A special power of attorney gives an agent the power to act on behalf of the principal (NRI) for a specific matter, including but not limited to taking legal or financial decisions. 

 

 

To have an effective POA for the purchase of property, an NRI must sign the POA agreement in the presence of a consulate officer or Notary in the country of residence. Further, such consulate officers must attest to the agreement for it to be valid. The NRI should register the POA under the Indian Registration Act, 1908, to make it valid and enforceable in India.

 

 

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Power of Attorney to Sell Property in India

 

 

Power of attorney to sell property in India also requires authorization from the country of residence. Let us examine a few countries of residence and the procedures related to power of attorney therein.

 

 

Australia:

 

 

An NRI must book an appointment with a Notary in Australia where the NRI and two witnesses and the Notary officer would sign the POAon a green stamped or bond paper. 

 

 

After notarizing the POA, you would send it to the Indian Consulate, who would stamp it with an Apostille by the Department of Foreign Affairs (DFAT) and then send it back to India to the appropriate authority duty charges prescribed by the local government.

 

 

Then, you can register the agreement, and the transaction can legally take place.

 

 

UK:

 

 

There is a 3-step process when an NRI from the UK wishes to purchase or sell property in India. 

 

 

Firstly, an attorney from India must draft the POA according to the needs of both parties and according to the applicable laws (ICA, 1872, or RERA, 2016, etc.) in India.

 

 

Secondly, the POA must be sent to the place of residence, i.e., the UK, where you can get it notarized by a Notary Public for a charge between 20 to 100 pounds. The concerned NRI, along with two witnesses and the Notary, will have to sign the document. After notarization, the Indian Consulate, located at the Indian High Commission, London, would attest the same. 

 

 

Thirdly, the document can be sent to the attorney in India where registration happens, and the transaction can legally take place.

 

 

USA:

 

 

There is a 3-step process when an NRI from the US wishes to purchase or sell property in India.

 

 

Firstly, an attorney from India must draft the POA, and the NRI and two witnesses should sign this agreement. The notarization of the document should be done in the presence of a Notary Public. Further, it must be sent to the Indian Consulate for his/her signature. An appropriate fee would be charged for attestation, notarization, etc.

 

 

Secondly, the POA must be sent to the Secretary of State for an apostille from the Department of State, Authentications Office, which will use the Seal of the US Department of State to authorize the document's validity will be sent overseas.

 

 

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Thirdly, the agreement shall be sent to the attorney in India for the legal execution of the transaction.

 

 

The POA is a powerful document and must be drafted between two parties that trust each other. The agent must be selected with caution as the agreement would transfer significant power to decide the owner/principal to the agent. A poorly drafted agreement that does not consider the risks involved (such as consideration, percentage of share between co-owners, obligations of agents, the role of decision making by an agent, etc.) would cause litigation which would severely affect the parties.

 

Permission for Sale of Minor Property
Property

Permission for Sale of Minor Property

The Indian Majority Act, 1875 specifies the age of majority in India. The Act states that the age of the majority in India is “18 years,” and any individual living in India who is below the age of 18 years is a minor. Minors cannot enter into contracts until and unless their guardians enter into contracts on their behalf. Let us find out how one gets permission to sell a minor’s property. 

 

Can a Guardian Sell Property?

 

 

Section 8 of the Hindu Minority and Guardianship Act, 1956 identifies the powers of a natural guardian or legal guardian. Clause (1) states that the natural guardian has all the power to do any act necessary, or reasonable, or proper in the eyes of the law for the sole purpose of such an Act is beneficial to the minor that it shall protect the minor or minor’s estate. 

 

 

Therefore, it is clear from the above provision that a natural guardian can sell the minor’s property (the Act) for the sole purpose of benefiting the minor.

 

 

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Can a Guardian Sell Minor’s Property?

 

 

The Supreme Court in Saroj v. Sunder Singh & Ors. held that a guardian cannot sell a minor’s share in the property without the permission of the appropriate Court. Furthermore, section 8(2) of the Hindu Minority and Guardianship Act, 1956 states that minors’ immovable property cannot be mortgaged, charged, or transferred by sale, gift, exchange, or in any other mode without the previous permission of the Court.

 

 

Further, Section 8(3) states that if any natural guardian disposes of any immovable property in contravention to clause (2) of Section 8, then such a sale would be voidable at the option of the minor. However, the said minor can challenge such a sale only within the limitation period, which shall begin running against them after they attain the majority.

 

 

Further, suppose a minor, after attaining majority, wishes to set aside the sale deed as such property belonged to the minor. In that case, such a suit must be filed within the limitation period prescribed under Article 60 of the Limitation Act, i.e, 3 years after attaining majority. 

 

 

Can a Minor Purchase Property?

 

 

For a minor to purchase property in India, he or she must enter into a valid contract of purchase and sale of such property. This agreement is known as an ‘Agreement of Sale’. Every agreement shall be a valid contract in India if it fulfils the criteria under Section 10 of the Indian Contract Act, 1872. Further, Section 11 highlights competent to be a valid party in any valid contract in India.

 

 

Section 11 states that every person of the age of majority will be competent to enter into a contract if they are not barred by other conditions mentioned in the section. Therefore, a minor, i.e, anyone who is not of the age of majority (18 years), will not be competent to enter into a contract. Any agreement entered into by a minor will be void ab initio (void from the beginning) the eyes of the law. 

 

 

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The provisions under the Transfer of Property Act, 1882, especially section 6 and 7 of the Act do not bar a minor from contracting. However, from the conjoint reading of the above two Acts, it can be deduced that a minor can be a valid transferee and receive property. 

 

 

A minor can acquire property through the hands of either his/her natural guardian (mother or father) or through a guardian appointed by the appropriate Court in the absence of such natural guardian. In such a case of acquisition, the purchase of property would be valid. 

 

 

After valid purchase, the natural guardian can register the property in the name of the minor under Section 35 of the Registration Act, 1908. However, the execution of such registration shall take place before the appropriate Court’s permission after satisfaction that the property acquired was legal and valid.

 

 

A minor can acquire a property by way of gift also. Here, there is no need for the intervention of the law, Court, or guardians of the minor. The reason for the same being that in case of a gift, acceptance by the donee is the only required to make it effective.

 

 

Lastly, a minor can acquire property using inheritance, be it intestate or by way of a will. In case of ancestral property of a Joint Hindu Family, the minor (both son and daughter, since 2005) will receive an equal share in the capacity of a coparcener after the death of the last holder of the property.

 

 

Hence, a minor, though not competent to enter into a contract can sell property through his guardians. A minor can also receive property through the means listed out above.

 

Things to Keep in Mind Before Buying A House
Property

Things to Keep in Mind Before Buying A House

Buying a house is one of the most crucial decisions for people in India. In India, investments in real estate and property are a luxury. A person buying a house may need to give up their entire life savings. Or, they end up being burdened with hefty home loans.

 

An investment in buying a house is not something you can easily alter or rectify. Therefore, you must keep in mind a few essentials. This way, you can avoid getting deceived and losing your hard-earned money. Also, what would happen if you did not desire such a house in the first place?

 

Your Budget

 

The first thing you should focus on is your budget. The easy availability of home loans has made people push their budgets. Instead, you should be mindful of setting up a budget to have no unwanted financial crisis in the future.

 

After setting up your budget, you can move to shortlist the available properties. Shortlisting the best possible property will be perhaps the most important task for you. Many key factors lead you to your ideal property. Factors such as availability and supply of key amenities like power and water supply, the infrastructure of the area, and the seller's goodwill are of prime importance.

 

Home Loan Eligibility

 

Secondly, look into your eligibility for a home loan. There are various factors that reduce your eligibility for a home loan. Before financing the loan, the financing agencies will look into your credit score. This determines your repayment capacity, existing loans, income, and age.

 

Many financing agencies provide a home loan calculator on their websites. You can use them to check your eligibility. Banks and financing institutions are also concerned with the reputation and goodwill of the builders. If they are not satisfied with the builder, they will not process the loan.

 

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Verification of Documents

 

People usually rely on their brokers to verify the documents related to the property. This is a bad practice because you can be misled by your broker (either intentionally or unintentionally). Therefore, verifying the property document yourself is important.

 

You should conduct the necessary due diligence in verifying the title documents of the property. Documents such as any government order for grant, gift or sale deed, succession certificate, etc. will form the evidence for transfer of the property over the years. Therefore, understanding the nature of the title is also important.

 

Background Check of the Seller

 

While buying a property, you cannot overlook the identity of the seller. While buying a property, people are often interested in just the property. So, verifying the credentials of the seller is not a top priority. But, you must look into the authenticity of the seller. E.g., Check whether the seller has government authorization to sell the property.

 

In the case of joint property, identify all the owners involved. Identifying whether the seller is a company, firm, partnership firm, etc., is essential to confirm their authority to own and transfer the property. Verify all the documents that ascertain the seller's identity (Aadhar Card, PAN details, Income Tax returns, etc.).

 

Awareness about the type of Land

 

Be aware of the land use pattern. Many state laws in the country prohibit the purchase of agricultural property by non-agriculturists. However, with increasing urbanisation in the country, non-agricultural land use is at an all-time high. As a buyer, be aware about the master plan of the project and ensure that the property is being developed per the zoning plan.

 

RERA compliance

 

Don't overlook RERA compliance while buying any property. You should only engage with those projects which are registered under RERA. Make sure that all the essential provisions under RERA are adhered to.

 

Moreover, try to find dig-up any cases or complaints filed against the developer on the official web portal of RERA (each state has its website). Along with the developers, real estate brokers should also be registered with their respective state RERA. Therefore, only appoint a broker after verifying their RERA registration number.

 

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Property Insurance

 

Property insurance or home insurance is indispensable. Insurance will cover your expenses in case of any damage or loss. Moreover, it will also protect you from any third-party liability arising from any sort of injury faced by such a third-party on your property. Home insurance minimizes the financial burden in such cases.

 

Ideal home insurance will also be applicable on the contents of your property, which includes: electronic appliances, furniture, and even jewellery. You can claim such insurance even if there is any theft or robbery. Therefore, you should insure your property as it provides economical protection and covers potential risks.

 

Physical Survey

 

A physical survey of the project site is of equal necessity. In today's era, you can be fascinated and influenced by the advertisements surrounding you. However, more often than not, these advertisements lead to misconceptions about the project.

 

Therefore, make it a point to mandatorily visit the project site before proceeding with the purchase. You should verify the basics, like the exact extent and measurement of the property. In the case of the Land on which the property is built, you should identify and demarcate the boundaries.

 

Conclusion

 

Those mentioned above are just a few basic due diligence methods. You must understand that the points mentioned in this article are by no means an exhaustive list. You, as a buyer, should conduct an elaborate due diligence process to ensure that your investment is viable.