How Power of Attorney Helps NRIs Manage Their Assets
As an NRI, you can’t be sued or held responsible for the fraud of the representative; unless it is proved that the fraud was done in conivance with you. if you are living abroad and managing your assets in India has become a headache for you, Power of Attorney (PoA) is the perfect instrument for you. Because of its various benefits, even resident Indians tend to execute POAs. People having numerous assets find it tough to be present everywhere physically. Therefore, they execute POAs to delegate the responsibility.
What is a PoA?
In the simplest of terms, it is the power (right) that a person (principal) grants to an attorney (a legal representative). A principal-legal representative relationship is established between the two and the principal would be bound by the acts of the legal representative.
For instance, if a person has purchased a property in India and cannot be physically present to process the registration, he can delegate these rights/duties to any relative/friend by means of a registered power of attorney.
Different Types of PoA
Special PoA: In a special PoA, the power of the agent is restricted and limited to a specific purpose. A special POA may be transaction specific and the POA ceases on the completion of transaction.
General PoA: Under a general PoA, broad powers are granted to the representative to make decisions on behalf of the principal. Besides, the representative can also carry out the various activities on behalf of the principal without any limitation on transactions. Durable PoA: A durable POA remains effective for a lifetime, unless it is explicitly cancelled. A specific clause can be inserted in the document, stating that the representative's power would remain valid even if the principal becomes incapacitated.
POA in Real Estate
In real estate, PoA could be used for the purposes mentioned below:
- Mortgage, exchange, sell, lease, collect rent, grant, borrow
- Manage and settle the disputes
- Perform the acts as required by banks, insurance companies and enter into contracts, deal with bonds, etc.
Power of attorney by more than two persons
In cases where a property has numerous owners, it would be difficult for all the people concerned to collectively complete a transaction. In such cases, granting the power of attorney to one person would make matters simple. As a result, this person would be empowered to act on behalf of all the owners collectively.
Follow Some Steps Power of Attorney can be executed in India
If an NRI is present in India, he could before going abroad execute the POA from India itself.
Step 1: The NRI needs to get the desired matter of the POA drafted and typed on non-judicial stamp paper of adequate value which is generally Rs 100.
Step 2: Along with the legal representative and two witnesses, the person is now required to visit the Sub-Registrar's Office.
Step 3: It should be ensured that all the persons going to the Sub-Registrar's Office are carrying their valid identity proof. Photocopy of the POA, along with the original copy, must also be taken along.
Step 4: At the Sub-Registrar's office signatures, photographs and fingerprints of the party will be collected.
Registration of POA:
POA concerning an immovable property which can confer title needs to be registered compulsorily, although, it is prudent to register any POA. In case of legal disputes, courts give more weight to registered documents.
Consulting a lawyer for the drafting of POA and for processing the same is always better to avoid future hassles.