Power of Attorney

Power of Attorney (POA) Rules for Land Deals in Tamilnadu

Buying/Selling Properties, Property Documents, Registration of Properties / / By / 31/10/2021 / 23 Comments

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Power of Attorney (POA) Rules for Property Deals

The Tamilnadu Registration Department has revised the rules of using the Power of Attorney(PoA). These changes are effective from 1st Dec 2012.
The purpose of these changes was to prevent misuse of Power of Attorney. Also, it aims to plug loopholes in the existing practices.

What is Power of Attorney

A power of attorney (POA) is a legal document giving one person (the agent or attorney) the power to act for another person (the principal). That means Power of Attorney authorizes a person to perform transactions on behalf of another.
 
There are different types of POAs that fall broadly under two categories. They are either a general power of attorney or limited power of attorney.

Situations when Power of Attorney is Useful

Power of Attorney is a useful method in many property transactions.

For Joint Development of a Property

When the Principal is willing to Develop the property with the help of a Promoter, the PoA comes in handy. This is known as Joint Ventures. In such cases, the Principal cannot rescind the PoA Deed.

For NRIs

Power of Attorney is very useful for NRIs to buy or sell properties. When an NRI wants to buy a property in India through a PoA, he/she need not give the property details in the PoA. This is so because the description of the property will be known only after the property is identified.

Other Situations when PoA is useful

The power of attorney for the land registration process in India can also be used by an individual who is bedridden or ill. Also useful for an aged person with health problems. There may be other circumstances when an individual is unavailable to conduct the transactions.

Life Certificate

What does the new Rule say?
POA holder should submit proof to the sub-Registrar that the Principal is alive. For this, a Registered Medical Practitioner or Gazetted Officer can issue a Life Certificate. These certificates are valid for 30 days only.
The new rules are applicable to all POAs registered since February 4, 2013. By law, POA is not valid once the Principal dies. 
 
In Tamil Nadu, POA holders carry out many property transactions on the basis of POAs. It might be so to avoid payment of stamp duty and registration fees.
 
There are many reports of POA holders selling a property after the death of the Principal. Buyers get into trouble when Legal Heirs of the property owner claim rights over it. Such cases end up in protracted legal battles. Some times, the Courts declare the Sale Deeds as invalid.

Compulsory Registration of Power of Attorney Deed

Registration of PoA Deed is Compulosory if the PoA is granted after 1.12.2012.
Power of Attorney Executed Outside India
It’s clarified by the Registration Department that any Power of Attorney relating to immovable property executed outside India does not require compulsory registration. However, attestation by the Consulate Office is required. Consequently further document presented (based on such unregistered Power of Attorney executed outside India) can be accepted for registration.
Where to register the PoA?

PoA shall be presented in the SRO in whose jurisdictional area the property in whole or a portion of it is situated. Or, it can be registered in the SRO where the Principal ordinarily lives.

PoA Registered Outside Tamilnadu

POAs registered in other states can also be used for registering and execution of documents in Tamilnadu. However, in such cases the Registrar shall get written confirmation from the concerned SRO before proceeding with the registration.

Company/Partnership Firm/LLP

Authorising a person to execute and present a document on behalf of a Company/Partnership Firm/LLP by the Partners/Directors cannot be considered as a Power of Attorney. Since, all the Partners/Directors of the Company/Partneršhip Firm/LLP cannot execute a document, it becomes necessary for them to identify a suitable person to execute the document on behalf of Company/Partnership Firm/LLP through a resolution/ authorisation. This resolution/authorisation should be enclosed as part of the document.

A company/partnership firm/LLP can be appointed as PoA.

Can One Sell His Property WITHOUT Annulling the Sale Agreement?

Yes. Says the Madras High Court. 
Registration of a sale agreement, expressing willingness to sell a property to a particular person on receiving full payment in future, will not be a bar for the property owner to go ahead and sell or transfer the property to a third party without getting the sale agreement annulled through a civil court decree, the Madras High Court has ruled.

Supreme Court: No Transfer of Title Deed through PoA

By a Judgment in 2011, Supreme Court has made it clear, that  Property sales through the common practice of general power of attorney will not give ownership title to the buyer.
Well, these were done to, primarily, to avoid payment of Stamp Duty and registration fees on the Sale deed, and to avoid payment of capital gains tax. These transactions have also paved the way for the “safe investment of black money”.
“A POA is not an instrument of transfer in regard to any right, title or interest in an immovable property,” the bench said, after interpreting various provisions of the law concerning property sales.
 
However, the bench said the judgment would not affect “genuine transactions” under the GPA. “For example, a person may give a POA to his spouse, son, daughter, brother, sister or a relative to manage his affairs or to execute a deed of conveyance.” The court further said that a person can enter into a development agreement with a land developer or builder for developing the land either by forming plots or by constructing apartment buildings. In that connection, he can execute an agreement of sale and grant a POA that will allow the developer to further sell the property to prospective purchasers.

Legal Status of Transaction concluded through Power of Attorney

Thus, while POA to avoid payment of Stamp Duty and parking of black money is discouraged, genuine transactions /sale made by the agent will be valid, is binding on the principal, and will convey a proper title to the purchaser(s).

Can PoA appoint a Sub-Agent?

Power Agent cannot appoint a sub-agent for registration of document. Consequently such documents shall not be accepted for registration.

Cancellation of Power of Attorney

A Power of Attorney executed can be cancelled. It should be done by registering a Deed of Cancellation. The Cancellation deed will have to be registered by the same authority who registered the PoA.
 
Disclaimer:The advice, views and suggestions published in the Website CHENNAIREALTIES.in are for educational and informational purpose only.
 
Readers are advised to do their own independent enquiries, consult professionals wherever necessary, for their specific requirements before relying on these information.-Edit
 

23 thoughts on “Power of Attorney (POA) Rules for Land Deals in Tamilnadu”

  1. Prabhakaran

    I m a power agent, I want to cancel the power without my principal. What is the procedure.

    Reply
  2. alagirikannan

    1996-ஆம் வருடம் வழங்கப்பட்ட பவர் ஆஃப் அட்டர்னி பத்திரத்தை வைத்து 2010 இல் ஒரு விற்பனை நடத்தினால் அது செல்லுமா?மேலும் அது ஒரு மதர் கார்டினால் வழங்கப்பட்ட பவர் ஆஃப் அட்டர்னி பத்திரமாகவும் அந்த தாய்க்கு மூன்று மைனர் குழந்தைகள் இருக்கும் பட்சத்தில் 2010-இல் அந்த மைனர் குழந்தைகள் மேஜர் ஆகிவிட்டனர் அப்போது அந்த மைனர் குழந்தைகளுக்கு தெரியப்படுத்தாமல் அவர்களது ஒப்புதலும் இல்லாமல் 2010-இல் அந்த பவர் ஆஃப் அட்டர்னி வாங்கிய நபர் ஒரு விற்பனை செய்கிறார் அந்த விற்பனை செல்லுமா அதை எதிர்த்து நீதிமன்றம் செல்லலாமா?

    Reply
    1. SC

      No and you can revoke your power of attorney at any time, unless it is irrevocable and your agent has some interest in it.

      Reply
  5. Santosh Bothello

    Can a NRI sell a land property in Ooty through a GPA attested at the overseas Indian embassy and the courts in TN and get it registered at the Ooty sub registrar’s office prior to selling.

    Reply
  7. Ravichandan Vanchinathan

    In Tamilnadu, the special power of attorney is valid for 120 days.Due to Covid out break the PoA couldn’t be used within the limited period 120 days. Is there any grace period beyond the 120 days ? If so how long? Is there any notification/circular by the registration department?

    Reply
  8. Anand Kumar

    After giving a GPA to an agent to sell a property, can I legally sell the same property myself without cancelling the GPA?

    Reply
  9. Kamaly

    What to do if principal dies .. how to proceed further and how to save the land or money investment in it

    Reply
  10. Peer Mohamed

    The supreme court judgment tiltled “No Transfer of Title Deed through PoA” is scary as I understand that many have purchased properties using PoAs through non-relates. If so, the concerned sub-registrars should implement the rule as we, as common people, do not know all the rules and especially the latest rules which are genuinely introduced by the govt to avoid fraudulence and tax evasion.

    Reply
    1. sowrirajan pathravi

      THE REAL ESTATE AGENTS PREPARES IRREVOCABLE POWER OF ATTORNEY WHERE HE WOULD HAVE GIVEN THE PURCHASE PRICE BUT YET ACTING AS AGENT. A PERSON CANNOT PLAY TWO ROLES. BUYER AND AGENT CANNOT BE SAME PERSON. WHAT THIS REAL ESTATE FELLOWS DO THEY PAY THE PROPERTY PRICE AND SIMULTANEOUSLY ACT AS AGENT. IN THE POWER THEY MENTIONED THAT PROPERTY SHOULD BE CONVEYED TO HIM OR A PERSON TO WHOM ASSIGNING THE RIGHTS. THE OWNER OF THE PROPERTY COMES AND SIGNS THE DEED.THE OWNER ALREADY TAKEN THE SALE MONEY FROM THE AGENT. NOW THE AGENT TAKES THE MARKET VALUE MONEY IN BLACK. THEREBY EVADING CAPITAL GAIN TAX AND STAMP DUTY. IT IS ALL HAPPENS WITH THE CONSENT OF THE REGISTRAR WHO TAKES BRIBE. REGARDS SOWRIRAJAN ADVOCATE CHENNAI

      Reply
  12. Biswadeep Sarkar

    Sir, I am a non resident of Chennai, belong to Jamshedpur. We have an undivided in west Bengal – Siliguri, which needs to be sold. There are 7 holders of the subject property. I want to award a power of attorney to one of my relatives in Siliguri. Kindly guide of the procedure, fees and the timelines.

    Reply
  14. Shameem

    In power of attorney the schedule of property goes wrong.It is registered in Registrar office. I want to have fresh POA.Is it necessary to cancel the previous Registered POA? Would you please reply me?My mail id is shameemraheem@gmail.com

    Reply
    1. ChennaiRealties

      Thanks Shameem. We do not have the expertise to advise on such specific queries. The article is meant for giving a general idea of the issues concerned. As far as we know, atleast 3 Laws are involved in the legal matters concerning Power of Attorney. 1)Indian Contract Act 2)Power of Attorney Act and 3)Registration act. Therefore, it is better to approach a professional lawyer. Also there are online legal forums like Kanoon, where lawyers may be available to clarify on such individual and specific issues. Thanks.

      Reply
  15. karthick

    Hi sir,
    Could you send sample draft for general power of attorney format for registration. i apply home loan in bank for construct new house.

    Reply
    1. ChennaiRealties

      Hi Karthick, The draft general power of attorney is available in Reginet website.Go to REGINETHome>Scroll down to the bottom to Downloads> click Utility Forms. Many forms are available in the page that opens

      Reply
    2. Ganesh Mahadevan

      karthick. My daughter is in San Diego, USA and I as her POA holder had to obtain a life certificate from her to undertake a land deal in Tamil Nadu.
      While the form does not indicate the need for Consular or Notary attestation, Embassy of India Washington rules explicitly say the need for Consulate attestation.
      It was in the midst of COVID and going to San Francisco ws ruled out. Finding a Doctor with a rubber stamp and who would provide this service was equally difficult.
      My daughter luckily found an Indian Doctor in her University who agreed to do the needful. My daughter added a rubber stamp impression using photoshop.
      Tis certificate was mailed by my daughter straight to the sub-registrar at vanur. It worked.

      The format is at this link:-

      http://itestweb.in/pdy30/sites/default/files/life_certificate_format.pdf

      With Regards

      Vice Admiral Ganesh Mahadevan
      Bangalore

      Reply
  16. ROY Daly

    SAMPLE DRAFT OF THE LIFE CERTIFICATE IN CASE THE PRINCIPAL CANNOT ATTEND TO THE REGISTRATION SHOULD BE SHOWN / INDICTED FOR DOWNLOADING. SHOULD THIS CERTIFICATE BE SIGNED BY THE NOTARY PUBLIC OF THAT COUNTRY AND ALSO BY THE INDIAN CONSULATE.

    Reply

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