Types of Power of Attorney :
General Power of Attorney
In this type of Power of Attorney, the principal authorizes the agent to do certain acts in general related to the subject matter. It grants broad powers to the agent to make decisions. For example, in many states in India, property sales were being executed using this instrument till Supreme Court banned such transactions in 2011.
In a property sale transaction using General Power of Attorney, the buyer gets a GPA from seller granting rights not only for the use of the property but also for further sale to someone else. The buyer can further sell the property to another buyer through another GPA. You must be really careful in signing a General Power of Attorney for Property in India to avoid legal troubles later with respect to the ownership of your own property.
Special Power of Attorney
In a special power of attorney, the agent is appointed by the principal to do specific act or acts as mentioned in the document. It narrows the choices the agent can make. In order to reduce or diversify risk, you can even make several different special POAs, with different agents for each instead of signing one General PoA authorizing one agent to carry out all tasks.
Durable Power of Attorney
Generally, under a Power of Attorney an agent’s power ends if the principal becomes mentally incapacitated, unless specified otherwise in the document. A Power of Attorney that specifies to be in effect in the event of future incapacity of the principal is called as durable power of attorney.
Powers under Power of Attorney for Property
An agent may be authorized to execute any or all of these powers under a Power of Attorney for
Property in India:
Lease, bargain, sell, collect rents, borrow, mortgage
Manage, compromise, settle and adjust all matters pertaining to real estate
Execute contracts, deeds, bonds, mortgages, notes, cheques, drafts, money orders
Sue on behalf of the principal
Validity and Duration of Power of Attorney
Power of Attorney shall remain in force until:
Expressly revoked by the principal or agent by giving a written notice, or
The principal becomes mentally incapacitated, or declares bankruptcy or dies, or
The specified act is completed under the PoA, or
The end of the fixed period of power granted by the principal as mentioned in the deed, or
The event of divorce or legal separation in case a principal has named his spouse as his agent.
Execution of Power of Attorney
Eligibility – A power of attorney can be executed by any person who is competent to enter into a contract. A company while executing power of attorney must make conformity with the “Articles of Association” and its common seal.
Legal Document – As per Indian Law, Power of Attorney is a legal and binding document on both principal and the agent. It must therefore be framed carefully using legal terms and clearly defining the scope, objectives and responsibilities.
Notarisation – A Power of Attorney must be signed and notarized by a certified notary advocate. You will need to show your ID to the notary so that he can certify the document. It must then be executed and authenticated by the registrar or sub-registrar of assurances as per the ‘Registration Act, 1908’.
Registration – A power of attorney is not required to be registered unless it creates an interest in an immovable property i.e. charge in favor of the donee or the agent.
Stamp Duty – A power of attorney is chargeable under ‘Indian Stamp Act, 1899’. A stamp duty has to be paid compulsorily by the principal or donor in the jurisdictional registrar’s office.