FAQ – Power of Attorney in Maharashtra

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What is a Power of Attorney?

A power of attorney is a document by which one person can assign some rights to another person. A Power of Attorney is a written contract that allows the Agent (PoA Holder)  to act on behalf of the Principal (PoA Grantor). The person who is granting the authority is called the Principal, Executant, or Grantor, etc. and the person who is receiving the authority is called the Power of Attorney Holder, Attorney-in-fact or Agent.

As per the nature, the Power of Attorney is also known by the names, like General Power of Attorney, Special Power of Attorney, Property Power of Attorney, Financial Power of Attorney, Limited Power of Attorney, Medical Power of Attorney, Durable Power of Attorney, etc.

What powers can be assigned?

You can assign some specific powers or general powers which include almost all powers that you can perform yourself. Some of the specific powers which you can grant are –

1. Real Estate: Buy, Sell or give on Lease, Leave and License basis, managing society matters, paying taxes, representing in front of Municipal Corporation, Registrar, etc.
2. Court Matters: Appoint a lawyer and represent you in court.
3. Finance: Managing your investments, bank account, insurance, shares, etc.
4. General Authority: By this kind of POA you grant all those powers which you are legally eligible to perform.

Three Important Types of Power of Attorney –

Power of Attorney can be many types, but mainly they fall under the following broad categories or a mixture of these categories  –

Specific or Special Power of Attorney –

It can be made for some specific purpose only, for Example – Renting out some specific property or renting out a property to some specific person only, representing in sub-registration office for registration of some specific property, etc. in short in this case the person appointed as Power of Attorney Holder can perform some specific task only.

General Power of Attorney –

In this kind of POA general powers can be given, for example – All powers to manage existing and future properties including powers like buying, selling, renting out, giving on a mortgage, etc. in short in these kinds of POA a Principal assigns all his power to the agent so the POA Grantor should appoint a very trustworthy person as Agent.

Limited Time Power of Attorney –

POA can be made for only a limited duration, POA Grantor can appoint someone as Agent for a limited time and after that period gets over the POA will automatically get expired.  These POA can be useful when Grantor needs someone to appoint for a limited time or for some specific task as there is no need to cancel the POA as it gets automatically canceled after a certain time or after the task is finished.

Special Power of Attorney for Property Registration –

Power of Attorney helps property sellers and buyers to complete the sale transaction when they are not available to do certain formalities in the sub-registration office, like signing & presenting the necessary documents. Especially in the current corona pandemic situation and due to restrictions on travel, it became very crucial and necessary to make Power of Attorney.

Special Power of Attorney to Sell Property  –

In Pune, Mumbai & Maharashtra, if the Power of Attorney for selling the property is assigned to near relatives without any consideration then Stamp Duty can be saved. This kind of Power of Attorney Should be registered compulsorily, there is an exemption for registration if the POA Grantor is staying outside of India.

The following powers can be assigned to POA Holder –

1. Search for an appropriate buyer and negotiate, fix the consideration amounts,
2. to execute/sign MOU, Agreement/s, Sale Deed/s, Power of Attorney, Affidavits, and all necessary documents with the Purchaser/s for completing the transfer/sell,
3. sign and execute the Deed of Correction or Deed of Cancellation or Deed of Confirmation, if required,
4. present the documents for registration in the concerned office of the Registrar / Sub – Registrar,
5. represent in the Government Offices, Revenue offices and to comply with all the necessary formalities such as the execution of necessary Forms, application/s, etc. for the purpose of completion of a sale transaction,
6. take all necessary legal action/s, file necessary civil and/or criminal proceedings, to accept the service of summons/notices from the court, sign, verify the Plaint, Written Statement, appeal memos, applications, legal Notices, Revision Applications, Interim, appoint advocates, to sign Vakalatnama, to change Advocate/s from time to time for representing in the court proceedings/matters related to the concerned property,
7. file necessary documentary evidence, to swear Affidavits/ Affidavit-In-Chief, to depose on my behalf in the court proceedings/matters related to the concerned property, compromise/settle the dispute/s or court matters, etc.

Besides these other relevant powers can be assigned.

Special Power of Attorney to Buy a Property and Register –

Power of Attorney can be given for Property Registration Purpose. Following points can be added in this kind of POA –

1. Negotiate and finalize the price of the property.
2. Apply and do the formalities for Bank Loan,
3. Power to Sign or Power to acknowledge the Sign of property owner in front of a registrar,
4. Power of Register the Document in concerned Government Office,
5. Power to represent in the Society when it forms,
6. Power to represent in a court in case any litigation arises while purchasing the property, etc.

How should you choose the Power of Attorney Holder?

To choose the Power of Attorney Holder, you must consider your options carefully as you will be responsible for the acts performed by your POA Holder. Besides that to save the Government Stamp Duty on POA, in certain cases, you will need to choose a close relative as your POA Holder. For example – if you want to grant a property selling right then you should consider appointing a close relative as your POA holder because it will save your Stamp Duty. You can appoint more than one Power of Attorney Holder if you think either one or together they can handle certain decisions or transactions at different times.

Power of Attorney to Blood & Near Relatives –

It is not necessary or compulsory to make a Power of Attorney in favor of blood or near relatives but when a Power of Attorney is made for selling an immovable property then it is beneficial to make it in favor of blood or near relatives as that will attract very less Stamp Duty and Registration fees.

Stamp Duty Rule –

If Power of Attorney is made for selling a property (right to sign and execute) and given to a person who is not blood or near relative then Stamp Duty and Registration Fees equivalent to the Conveyance will be applicable. “Conveyance” is a process in which property gets transferred from one person to another, for example, Sale Deed, Deed of Assignment, etc. Currently, in Pune Corporation areas the Stamp Duty for Conveyance is 5% + Registration Fees is 1% + LBT 1% + 1% Metro Cess. So, to avoid these charges, a Power of Attorney can be made in favor of blood or near relatives and Rs. 500/- Stamp Duty and Rs. 100/- Registration Fees will be applicable.

Who are considered near Relatives? –

Father, mother, brother, sister, wife, husband, daughter, son, grandson, granddaughter or father, mother, brother, or sister of the spouse.

What if blood or near relatives are not available?

In this case, except for signing (execution) other rights can be given, like presenting the document and admitting the execution (signing by the actual owner of the property) in the Registration Office. Such Power of Attorney will also attract the Stamp Duty of Rs. 500/- and Registration Fees of Rs. 100/- only.

Note – In this kind of Power of Attorney the Agent (PoA Holder) only gets the power to present the document and admit the execution by the PoA Grantor. So, the document which is going to be registered should be signed by the Power of Attorney Grantor in front of the Power of Attorney Holder.

Stamp Duty of Rs. 500/- and Registration Fees of Rs. 100/- will be applicable if Power of Attorney is made in favor of anybody for a purpose other than selling a property.

Notary or Registration of Power of Attorney –

Registration Process –

In the process of registration of Power of Attorney, both the parties i.e. Power of Attorney Grantor and Power of Attorney Holder along with two witnesses should visit the registration office. After the registration, a copy of the PoA gets stored in the Government Database.

Notarization Process –

In this process, Notary verifies the parties, attests the PoA, and notes down the PoA details in the register.

Difference Between Notary and Registration of Power of Attorney –

The basic difference is, in the registration process copy of PoA gets stored in the Government Database with one unique registration number, and in the Notarization, the Notary mentions the basic details of PoA in his register with one unique number.

Registration Fees –

Registration fees is required to register the Power of Attorney but it is not required for Notarization. This fee depends on various factors.

Power of Authority other than selling a property – requires Rs. 500/- Stamp Duty

Stamp Duty –

Power of Attorney for selling a property given to “near relatives” (as per the definition of the government) – Rs. 500/- Stamp Duty

Power of Attorney for selling a property given to “non-near relatives” – equivalent to the conveyance deed.

When Registration is Compulsory –

Registration is compulsory in case POA is given for the following reasons –

1. Selling or buying a property,
2. signing various documents related to a house loan,
3. taking possession of the property from a builder,
4. making an admission of execution of a document before the sub-registrar where property transfer is involved.

When Registration is Optional –

Registration is not compulsory if POA is given for the following reasons –

1. Executing the Leave and License Agreement,
2. Signing documents related to society,
3. Handling court matters eg. filing a case, appointing a lawyer, defending POA grantor, signing necessary documents, etc.

Power of Attorney by Non-Resident Indian – Process

NRI can execute the Power of Attorney outside India for the purpose of selling or buying a property in India, managing a bank account and investments or managing a rental property, etc. 

For a valid POA following things should be done by the POA Grantor and Holder –

1. Prepare a draft and sign all the pages of the Power of Attorney, fix a photograph, current address proof, and Passport copy,
2. The person signing Power of Attorney (PoA) should be present at the Consular counter and the power of attorney should be executed on a stamp paper / plain paper and in a manner as the case may be as applicable to the country in which the power of attorney is executed,
3. The signature of the executant should be authenticated by the Indian Embassy / Indian Consulate / High Commission of India in that country where the executant resides,
4. Stamp duty should be paid in India within the time limit, as applicable in the state where it is to be submitted,
5. Power of Attorney Holder should get the POA Notarized OR Registered (as per the process prescribed by the State Government) in India within the time limit.

Read the detailed article on NRI Power of Attorney