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Power of Attorney as the name suggests provides legal right to someone to act on others behalf. This legal document is a power tool that provides the person with legal authority to take decisions on someone’s behalf. It is generally utilized when the person itself is not in position to conclude the formalities for example the person is abroad or the person is not well then with the help of this document they can ask any entrusted person to act on their behalf to avoid any potential delay of disruption in the work.
The POA allows the person to work as a decision maker and the person holding the POA of attorney can make decisions related to finance, property, medical etc. The person who gives power of attorney is called donor and holds the right to cancel or modify POA barring incases of mental incapabilities.
What is Power of Attorney and When it is Exercised
Power of attorney is a legal document that helps in delegating authority to someone entrusted so they can act on your behalf to make various decisions. The person issuing or granting POA is called principal or donor; the person receiving the POA is known as agent or attorney in-fact. This document becomes very important in case of the principal becoming incapacitated for some reasons. The scope and the authority provided through power of attorney can be limited or broad based on the requirements.
Types of Power of Attorney
There are many types of power of attorney, some example are below
General POA: This type of POA is utilized in cases where the donor is not in the capacity to make a decision or not willing to make a decision. A general power of attorney provides the authorities to make a wide range of decisions. The agent under this POA can handle various tasks like buying or selling real estate or entering into contracts on behalf of the principal.
Usually, General Power of Attorney remains valid for the entire life of the principal, but it can also have a specific duration, such as one year or more, if mentioned.
Special Power of Attorney: Under this type of power of attorney authority is given for a specific task by the donor or principal to the agent. It limits the agent’s authority to certain tasks only and once the agent completes the task the special POA gets terminated.
Power of Attorney for Property: Under this POA the donner grants authority to the agent to handle real estate related matters. By using this document the agent can enter the contract of buying and selling property on behalf of the principal. The agent must keep accurate records of all transactions done on the principal’s behalf and to provide him with the updates to keep him informed.
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Details of the Situations Where Power of Attorney is Exercised
There are various situations where a principal or donner can be benefited by using power of attorney.
Medical Reasons: If the person is unwell and not in a condition of effective decision making they can use POA and appoint an agent who can act on their behalf and complete the assigned task.
Traveling or At Foreign Location: Power of attorney can be utilized if the person is unavailable due to travel or being abroad resulting in his or her inability to complete certain tasks. Appointing an agent through POA is a good idea.
For Collecting Debt: POA can be provided to an agent to collect debt on behalf of the principal.
Investing Money: The principal or the donor may decide to provide POA to financial experts for investing money as they are better positioned in terms of making investment decisions.
Legal Matters: When the principal is involved in legal matters it can be a very wise decision to provide POA to a legal expert who can attend and resolve legal matters.
Power of attorney should be provided to only the entrusted person and it should clearly outline what power and authority has been provided to the agent and what will be the duration of that power of attorney.
Understanding How Does Power of Attorney for Property In India Works
Power of attorney in property related matters has always been tricky, there have been multiple incidents of fraud and abuse. There have been instances where agents were involved in fraudulent transactions using POA. Considering the growing instance of these types of fraudulent transactions, state governments are now making registration of POA mandatory as a step in real estate transactions. Let us take a look at how the general power of attorney for property works.
Drafting General Power of Attorney for Property Works: First of all, the donor needs to get this document drafted by a legal expert if he or she wishes an agent to enter into a contract of selling and buying property. A legal expert has better chances of drafting a fully compliant and accurate POA due their knowledge and experience.
Mentioning the Authorities Provided: The document should clearly mention the authorities provided to the agent under the POA. The principal or the donor may decide to go with general power of attorney if he or she wishes to provide broader rights to an agent to handle property matters.
Registering Power of Attorney: It is advisable to register POA with relevant government authority to secure its validity in real estate transactions. This will help safeguard against fraudulent transactions.
Limitation & Restrictions: Any limitation and restriction over the power given to an agent must be clearly defined. If the principal wants an agent to take charge of certain tasks like buying, selling, renting and handling tax related matters.
It is always advisable to go with a POA with limited validity or the POA with the clause or revocability, else once POA granted it becomes difficult to revoke.
POA in Case of NRI: Power of Attorney becomes a very useful instrument in case of Non Resident Indian, as it is not feasible for them to return to India for every single transaction. Hence, providing POA to an agent works best in their interest.
For an NRI power of attorney document must be certified at the Indian Consular Office in that foreign land. Usually this type of POA has limited validity, once issued it has to be utilized within a 3-months deadline. Also, it has to be executed on stamp paper prevalent in the country where NRI is currently in.. Every signature in this PoA has been authenticated and certified by the Indian consulate.
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How Long A Power of Attorney Can Last
A power of attorney can become effective immediately after signing the document unless it has been written to take effect in the near future under certain circumstances. The time in future can be specific or it can become effective upon the occurrence of certain events in life. For example if the person becomes mentally incapacitated to make a decision they can opt for executing POA in the name of someone they trust.
A power of attorney can be written to last for an indefinite period or for a limited period of time. The power of attorney ceases to be terminated in the event of death, it can not be considered as a substitute of a will.
Risks Involved in Providing Someone a Power of Attorney:
Power of attorney is given to someone you can trust and the agent in case of POA is supposed to work in the best interest of the principal. The success of power of attorney lies in the intention of the agent to carry out work with honesty.
If the agent doesn’t act in a trustworthy manner serious problems can arise. Since POA provides legal authority to act on your behalf, any legal mistake or violation caused by an agent can have consequences for you. For all those principals who have executed POA for managing their financial matters, a wrong investment decision by your agent can incur losses for you.
A principal can be held responsible for the action of the agent till the time agent is working within the prescribed authority given to them. In case an agent exceeds the authority provided to them the principal can not be held liable.
How Insaaf99 an Online Legal Consultation Platform Helps in Case of POA
POA is a very important legal instrument. It holds several benefits for the person who is incapacitated for any specific reason, however, it has many risks involved as well, hence, it should be exercised with caution. Insaaf99 an online legal consultation platform provides comprehensive assistance for handling POA.
Legal Guidance: If you are considering utilizing POA then you can easily connect with our expert lawyer for legal consultation related to your options. The legal expert with Insaaf99 has deep understanding for these issues and we can help you understand the benefits and risks involved with certain types of power of attorney
Document Accuracy: Our legal expert can save you from future trouble by including clauses in your POA draft, creating safeguards for you in case the agent you entrusted goes rogue. We can also guarantee you legal compliance required for this document.
Informed Decision Making: Legal expert at Insaaf99 helps you with legal insight related to your situation and help you make better decisions regarding what type of POA to choose and what limitation and restriction to apply, thereby empowering you for informed decision making.
Thus Insaaf99 acts as your legal ally in serious matters like power of attorney.
Frequently Asked Questions
What is power of attorney for property?
A Power of Attorney (PoA) for property is a legal document executed by principal or donor in favor of an agent allowing him or her to act on his or her behalf in property related matters like buying and selling of property.
Types of power of attorney?
There are many types of POA depending on the use, however, the most common are General Power of Attorney and Specific Power of Attorney.
How to get power of attorney?
A POA is granted by principal or donor to the grantee who is called an agent.
What is the use of power of attorney?
POA is utilized in cases where the principal is incapacitated for some reason and unable to make a decision for him or herself. With the help of an agent, donors can get tasks related to finance, property and medical etc.
What is the validity of power of attorney?
A power of attorney can be written to last for an indefinite period or for a limited period of time. The POA ceases to be terminated in the event of death.
What is the best form of power of attorney?
The best form of the POA depends upon the purpose it has been created for. A well thought and meticulously chosen POA works well.
Can the power of attorney holder sell property to himself?
POA holder can sell property to himself or herself provided he or she gets the consent from the principal donor and gets the sale deed registered. Immovable property can not be transferred based on POA only.
