Table of Content
What is Power of Attorney in Property Transactions?
A Power of Attorney (POA) is a legal instrument that grants a legal agent or attorney-in-charge the right to act on behalf of the principal. The principle may provide the responsible attorney extensive or restricted authority to act on the principal’s behalf. On behalf of the principle, the agent may decide on things pertaining to property, finances, or medical treatment.
If the principal becomes incompetent due to a disease or disability, a power of attorney takes effect. In the event that the principle is unable to approve financial or legal transactions, the agent may also act on the principal’s behalf.
When the creator passes away, revokes the power of attorney, or it is declared void by a court of law, the power of attorney expires. A power of attorney also expires when the author divorces a spouse who has been entrusted with it or when an agent is unable to perform the specified tasks.
Different Types of Power of Attorney
There are various types of Power of Attorney to buy properties in Chennai or any other metropolitan cities.
1. General Power of Attorney
The holder of a general power of attorney is given extensive authority to handle the principal’s affairs in a variety of ways. This might involve having the power to manage several properties and carry out different kinds of transactions, such renting or remodeling houses.
The GPA is preferred because it gives the lawyer the freedom to handle a variety of matters pertaining to the principal’s inheritance. However, because of its wide scope, it necessitates a great degree of confidence in the lawyer in order to guard against any abuse.
2. Special Power of Attorney
A Special Power of Attorney, which gives the attorney bearer authority for particular duties, is far more concentrated than a GPA. An SPA could be created specifically for the sale of a certain property or to manage transactions associated with a single real estate transaction, for example.
By reducing the possibility of overreach and guaranteeing that the powers are strictly carried out within the specified bounds, the SPA gives the principal more control over the amount of authority granted to the attorney holder.
3. Durable Power of Attorney
Only during the time a person wishes to have someone else act on their behalf does the durable form of power of attorney take effect. A non-durable POA will expire as soon as it is revoked or the designated expiration date passes. But what happens if the agent is rendered incapacitated? Will the POA remain in effect?
In this situation, even if the principal is unable to communicate, they would prefer that the POA continue to be in effect. For instance, a durable power of attorney can be used to specify that the spouse should act as the principal’s agent in the event that the principle becomes unconscious.
4. Medical Power of Attorney
The principal retains the ability to determine the desired level of care in the event that they become very ill. In the event of a life-threatening illness, a medical or health care POA gives the agent the authority to act as the principal’s representative. Because they provide for the possibility that the principle may be too ill to make choices for themselves, the majority of health POAs are classified as durable.
Before selecting an agent, the principal should consult with legal counsel in each of the aforementioned situations. In order to comprehend what should be included in a power of attorney, it is also important for the principal to have the attorney guide them through each step of the notarization process.
Role of Power of Attorney for Property Transactions
In real estate transactions, having a power of attorney can be advantageous for a number of reasons:
- By issuing power of attorney, you enable someone you trust to act on your behalf in the event that you are unable to manage a real estate transaction directly because of distance, health concerns, or other obligations.
- Power of attorney makes it possible to make decisions and execute legal papers more quickly, which guarantees that real estate transactions go without hiccups.
- A power of attorney can help ensure that property concerns are managed and handled in the case of the principal’s death or incapacity.
Drafting Power of Attorney for Property Transactions
Step 1: Selecting an Agent and Defining the POA
First, specify exactly what property-related tasks you would want the agent to perform, such as managing, leasing, or selling the property. Next, choose a reliable person who can carry out these duties efficiently.
Step 2: Creating the POA Document
Create translucent portions in the POA document. Describe the POA’s purpose and introduce the parties. Describe the agent’s precise duties and authority. Lastly, determine the document’s terms of validity and termination.
Step 3: Going over and improving the POA
Examine the manuscript carefully to make sure it reflects the grantor’s wishes and is accurate and exact. Fix any mistakes or misunderstandings at this point.
Step 4: Completing the Purchase Order
Both the agent and the property owner must sign the completed POA. A notary public and witnesses may occasionally be needed to verify the document.
Steps to Sell Properties Using Power of Attorney
Let’s examine how the sale actually takes place now that you have a power of attorney for the sale of property. When your agent drafts, notarizes, and registers the power of attorney instrument, they formally assume responsibility. The property will be listed for sale, and a buyer will be found. After that, the sale will be finalized when they sign the selling deed on your behalf.
Limitations of Power of Attorney
1. Conflicts Over Authority: Frequently, there is misunderstanding over what falls within the agent’s area of authority and what does not. This is prevented by precise, comprehensive POA paperwork.
2. Legal Barriers: Laws vary from one area to another. Therefore, make sure you abide by local laws.
3. Risks of Fraud: In actuality, there is a chance of abuse. Protect yourself by establishing limits and reviewing your agent’s behavior on a regular basis.
Frequently Asked Questions
1. It is possible to have more than one Power of Attorney for my property?
Yes, you can have more than one power of attorney for your property. Infact, having more than one power of attorney has various benefits.
2. Who is eligible to act as Power of Attorney?
As long as you are mentally competent and acting voluntarily, you are technically able to designate anyone as your agent. It ought to be someone reliable and competent, like a spouse, close relative, or acquaintance. Another option is to assign a POA to your attorney.
3. It is possible for PoA to sell the property to himself?
A registered sale deed, not a Power of Attorney, is the only way for a Power of Attorney holder to sell property to themselves.
4. Can you revoke Power of Attorney?
A deed or notification of revocation of the PoA must be drafted by the principal. The reason for the POA’s revocation, its effective date, and the repercussions of the action must all be included in the deed.