Power of Attorney in Property Deals — Use It, Don’t Be Fooled by It

A power of attorney, or POA, is a legal document in which one person authorises another to act on their behalf. In property matters it comes in two broad forms — a general power of attorney, which grants wide powers, and a special or specific power of attorney, which authorises a defined, limited act such as signing a particular sale deed or appearing for registration.

Used properly, a POA is genuinely useful. An owner living abroad, an NRI who cannot travel for a registration, an elderly seller, or someone managing property in another city may lawfully appoint a trusted person through a POA to carry out specific tasks. Executed and, where required, registered correctly, it is a normal and valid instrument.

The critical thing every buyer must understand is that a power of attorney does not by itself transfer ownership. The Supreme Court of India has made clear that such GPA sales — where property is purported to be sold merely through a general power of attorney, together with an agreement to sell and a will, instead of a registered sale deed — do not convey legal title. A POA authorises actions; it is not a substitute for a properly executed and registered conveyance.

This makes buying a property on a GPA basis genuinely risky. You may pay full value and take possession, yet not become the legal owner, leaving you exposed if the original owner or their heirs dispute the deal, if the POA was revoked, or if the same property is sold to someone else. Deep discounts on GPA properties often reflect exactly this weakness in title.

Where a POA is legitimately used, the details matter. Depending on its purpose and location, it may need to be properly stamped and registered, and if executed abroad it typically requires attestation and adherence to the applicable formalities before it can be relied on in India. A POA can also be revoked, and it generally lapses on the death of the person who gave it, so its validity should be confirmed close to the transaction.

Protect yourself with a few safeguards — insist on a registered sale deed in your favour rather than settling for a GPA arrangement, verify the POA’s authenticity, scope and current validity, ideally with the principal directly, and have a lawyer examine both the POA and the underlying title before any money changes hands.

The law and formalities around powers of attorney change over time and vary with the purpose and place of execution. Treat this as general guidance, and confirm the current requirements and the specific document’s validity with a qualified lawyer before you rely on any POA in a property deal.