Everybody wants to have a superpower and be the saviour for the people, and it would be super cool. Unfortunately, this is not that kind of power but Raman found it useful regardless.
Raman was looking to sell off his old property and found a genuine buyer. But at a short notice, Raman was asked by his company to travel abroad urgently. Raman did not want his property sale to be postponed and neither did he want to say no to an onsite offer.
Raman’s bank suggested issuing a Power of Attorney in his wife’s name, who can then handle the sale for the property while Raman is away.
Power of Attorney can be a great help in certain circumstances like when you are away, to help you in both financial and real estate dealings.
But there are certain things you must now before initiating a Power of Attorney.
So what exactly is a Power of Attorney (PoA)?
Power of Attorney is a legal document that falls under section 2(21) of the Power of Attorney Act of 1822. In a Power of Attorney document you can appoint another person as your Agent or Attorney to act on your behalf.
The Agent or Attorney gets all powers conferred on him as per the PoA document. PoA can be used to operate bank accounts, security trading accounts, investments in mutual funds and real estate transactions.
Power of Attorney in banking transactions: When it comes to banking transactions, many non-resident Indians use the Power of Attorney route, allowing their relatives in India to manage their bank accounts. This way they have someone trustworthy looking after their financial affairs.
Power of Attorney in real estate transactions: Power of Attorney plays an important role in real estate transactions. Consider a situation where you are selling your property but are urgently required to travel to a different city and the buyer cannot wait till you return. To avoid any delays you can opt for a Power of Attorney, allowing your agent to sign all the documents on your behalf.
Various types of Power of Attorney:
Power of Attorney can be classified into various distinct types as follows.
- General Power of Attorney: A general Power of Attorney is one which grants powers to someone for some generic personal and business money transactions.
- Special Power of Attorney: Special Power of Attorney, as the name suggests, gives special powers to the attorney for particular acts. Suppose you want to give your agent the power to manage your bank account only or manage your real estate investments only, a specialized Power of Attorney agreement with your agent is the best way to go.
- Irrevocable Power of Attorney: An irrevocable Power of Attorney cannot be reversed. This is generally desired for real estate transactions.
- Durable Power of Attorney: A general Power of Attorney generally expires if the issuer gets physically or mentally incapacitated. If the issuer clearly certifies that he wants the Power of Attorney to continue even in such a situation, it is called a durable Power of Attorney.
Things to know about Power of Attorney:
Here is a look at some of the essential legal implications of PoA.
- As per the Supreme Court of India, Power of Attorney for execution and registration of property documents needs to get registered with a Registrar. For other transactions, like signing home loan documents, PoA for banks, trading etc., registration of PoA is not required, but it should be attested by a notarized authority. For example, if you sign a sale deed on behalf of the owner, the Power of Attorney should be registered.
- A Power of Attorney gets terminated as per the period specified in the document, except for property transactions. For a durable Power of Attorney, you can revoke it by registering a deed of revocation.
- Power of Attorney gives the attorney the power to handle all financial and non-financial transactions on behalf of the issuer.
Things to take care while issuing Power of Attorney:
- A Power of Attorney is a legal document that has to be properly framed, using the right legal format. There are standard formats available for different purposes. To make your Power of Attorney more authentic, you should get it checked with a lawyer.
- If you want to enter into a specific agreement with your agent or attorney, opt for a specialized Power of Attorney.
- Be aware of the risks associated with a Power of Attorney. Be careful about who you choose.
In case you learn to fly, you wouldn’t need a Power of Attorney to sign the documents for you. But, maybe you’d be too busy saving the world and need somebody to help you out instead.