How Power of Attorney Helps NRIs Manage Their Assets

How Power of Attorney Helps NRIs Manage Their Assets

NRIs cannot be physically present in India for each of their financial and legal transactions, and therefore, they need someone to act on their behalf in their absence to complete the formalities of the transactions. POA helps to achieve the same.

Power of Attorney is an authorisation in writing given by a person ( grantor/ donor/principal) to another person (attorney/agent) to act on his behalf. The person who can act on another’s behalf is called an attorney in -fact.

When POA is executed in favour of a person by NRI, he becomes the holder of the authority to act on his behalf. POA is required:

  • to do the necessary acts towards accomplishing any task in the absence of NRI
  • to complete certain transactions in time to avoid delay, e.g. taking possession of the flat, payment of taxes etc

The POA should be used when it is essential to use the same, and there is no other alternative.

Agency Relationship:        

POA creates a relationship of Principal-Agent between the parties. The acts of the agent bind Principal-Donor of the authority.  But an agent has to act within the scope of his authority. POA is given a strict interpretation, and no extra rights are construed. The acts which an agent is authorised to perform must be apparent in POA.

POA can be revoked once the task for which POA was executed has been accomplished or if the representative is misusing the power.

POA may cover any or all aspects of asset management. POA can be – General or Special Power of Attorney.

  • In General Power of Attorney, power is granted to do all the acts necessary concerning the subject matter.
  • In Special Power of Attorney, authority is assigned to perform specific tasks only.

POA can be used by NRIs to manage their assets in India in many ways like:

  • Collection of rent
  • Sale, Purchase, Mortgage, Lease, Settlement, Agreement or Registration of transfer deed
  • Banking transactions
  • Representation in Legal disputes
  • Managing affairs related to real estate – signing of contracts for renovation, taking possession from the builder etc.

Joint ownership:    

In case of joint ownership of property between NRI and Resident India, POA can be executed in favour of one owner to take important decisions and do the requisites concerning the subject matter of POA.

POA holder:    

POA can be given to relatives, blood relations and friends or even to a third party. In case of property matters, some states allow POA only in favour of blood relations.

Execution of POA:

If NRI is executing the POA   

  • While he is in India, POA is made on a non-judicial stamp paper and got notarized.
  • While he is abroad, then POA is made on plain paper (Indian Stamp paper not required) and got notarized there. It is sufficient for the countries signatory to the Hague Convention. But in India POA is given more weight if it is got attested through the Indian Embassy/ Consulate in the foreign country where NRI is residing.
  • If executed abroad, POA holder will have to get the POA registered in India in particular sub Registrar’s Office and stamp duty is to be paid.

 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.

Embezzlement of Power: A True Story

Embezzlement of Power

In today’s world of commerce and industry, the need to enter into legal relations, form agreements or even initiate transactions, is an everyday business. It is not surprising to see hundreds of people delegating these functions and powers to another person, through a legal process known as granting of Power of Attorney (POA). This legal document may be a blessing or a curse, depending on how well the donor/principal (one who grants such power) is aware about it. Being General or Specific in nature, the power granted is either general or for a specific purpose, time etc respectively. Any person competent to enter into a contract may execute a POA; whereas, it also applies to married women even if they are minors. But not minor boys, because, well, we believe in gender equality.

However, this too has loopholes. Granting a Power of Attorney or POA equals making an individual your legal representative, thus, making you liable for their every act. Researches focused on Elder abuse due to the grant of Financial POA, show that children don’t usually shy away from proving their parents to be senile and steal their homes, money, and property. Another study focuses on land grabbing, especially by loan sharks, since making dubious POA’s is inordinately easy in India. However, the Supreme Court passed a judgment on October 13th, 2011, the disparaging sale of immovable properties through agreement, will transfer or even general power of attorney and declared such sales to be void. Thus, the swindlers would now have to get registered ‘Deeds of Conveyance’ to complete their title and this would even restrict unscrupulous owners from selling the same property to various people under a spurious POA.

Nonetheless, no mountain of evil was ever left unconquered. While granting a power of attorney, make sure that your agent is not the conniving little wolf of little red riding hood, and is not given unconditional powers under the POA. Restrict to using a specific POA, with specific terms and periods, to ensure that the reins of your business are always in your hands. Register the POA so revocation becomes easier when you feel so to do.

It is imperative to seek legal help if you have been bamboozled, because unlike New York City, we yet don’t have a Spider-man to protect us. It will be the courts and attorneys for now. Sorry.


get power of attorney

A Power of Attorney is a document that demarcates and lists out the powers that are shared with the Power of Attorney Holder. There can be several types of POA’s such as General POA’s and Special POA. Minor and disqualified individuals by the law cannot provide for a POA. POA’s are used mainly by NRIs to administer and manage their property in India. The method of getting a power of attorney in India by an NRI (holding an Indian passport and not being present in India) is as follows –

  • The important points should be written by the NRI on a piece of paper in plain and understandable English. The main reason behind this is that all that as to be shared with a POA holder can be done easily. The wordings of the POA should be checked and done carefully and should also be given to an individual who genuinely wishes to perform the services mentioned for you. In case the NRI is not in India during that time the step of having it on a legal paper can be avoided and the same can be done on an A4 size paper.
  • This NRI should get the POA attested by the Indian Embassy/Consulate in the country where they are residing. This has to be done alongside two witnesses.
  • This Indian Embassy/Consulate signed/attested POA has to sent to India through the postal services available. These POA’s have to be stamped and adjudicated within three months of receipt in India.
  • Whoever the person in India is, has to make this legal and valid and thus, the same should be registered. Under the Registration Act, however, it is not necessary for a POA to be registered (in cases of general POA’s) however it is normal practice to register the same when dealing with immovable property.
  • The government office is figured out through the address of the POA holder and not the NRI’s address.
  • Documents usually required would be the – affidavit, the envelop in which the POA was mailed (has been asked for as proof in certain cases), passport photocopies of the ones who have written/created the POA/executants, address and ID proof of the one holding the POA, document regarding the relationship between the POA executor and POA holder, original POA etc.

Usually, the POA is registered and can be obtained in 15 days.

Why is General Power of Attorney a pain in the butt?

General power of attorney

People are very proactive in life today. So many have already taken the time out to prepare a ‘Will’ or a ‘Trust’ to handle their personal and financial matters after their death. However, the appointment of someone to take medical, financial or even personal decisions for you, while you are alive, and yet incapacitated, disabled or outrightly more interested in dwelling over your mid-life crisis, is acutely significant. This may be done with the help of a legal process known as granting the ‘Power of Attorney’, a legal document that may change your life. There are two of these- a General or a Specific POA (Power of Attorney)- both achieving diverse objectives. A General POA was a popular choice amongst the citizens until they realised how easily they could be hornswoggled by this tool.

General Power of Attorney

A General power of attorney grants an agent (to whom the POA is granted) virtually unfettered powers of decision making, from tax payment to entering contracts, from settling claims to buying a new toaster, everything. Since the subject matter is not listed in this case, the agent becomes the master of your fate and the captain of your soul. The duration of such a POA may also be arbitrary, depending on how it is drafted. Signing such a document makes you liable for the myriad acts your agent is legally allowed to perform (you could end up in jail, yes).

Specific or special power of attorney

An easy fix is the adoption of a Specific POA, that not only states the specific purpose which the agent is allowed to perform, it also acknowledges the limited duration of the POA. Rather than granting a singular General POA to one agent, one can grant several Specific POA’s to more than one agent, as regards to financial transactions, business interests, real estate etc, which would ensure no abuse of power. This should definitely save one from endless trips to the court, in case one’s agent turns out to be like a country’s parliamentarians- a rapacious perjurer.

It may not be wise to keep an absolute restraint on the power granted, nonetheless, it is imperative to ensure that the reigns are tight enough to keep your horse from freelance grazing as and when it makes up it’s mind.

Get Your Power in Your Hands – The POA and what to watch out for

POA Power of Attorney document

It is common for us to have clients call us for legal advice because they have been duped because they ended up giving their ‘rights’ in the wrong hands! Most people treat the Power of Attorney as a simple paper just meant to share responsibilities. The reality is much different. Nonita Singh, one of our clients from Sydney, narrated how her distance from her hometown made it difficult for her to keep track of her property affairs. It was natural then that she succumbed to an offer by her cousin who suggested that she hand over a power of attorney to him. What was meant to be a helping hand turned out to be a big drain on her patience and harassment to her. Her fault? Only that unknowingly she ended up giving a blanket General Power of Attorney to her cousin. This resulted invested interests taking over, and to her shock & dismay, she discovered that most of her land had been taken over and was no longer in her name. Betrayed by family and at a dead end about her property, she contacted our office for help regarding her property dispute.

This makes us think – Are people aware of the nuances of the Power of Attorney? It is vital to understand fully what it entails giving the Power of Attorney to another. Power of Attorney (POA) is a legal document that empowers a specified person to act on behalf of the person executing it and make legal and financial decisions on his/her behalf.

There are two types of POAs

  • General POA: General POA is a document in which you give full authority to another person to act on your behalf for any legal procedure and take financial decisions without any limitations.
  • Special POA: Special POA is a document in which you give restricted or limited authority to another person i.e. to act only on a specific matter or complete a particular or single transaction. Once the transaction is completed, or the matter is solved the POA expires i.e. it becomes null and void.

Legal Powers that can be granted to the Specified Person by the Executor of POA:

  • To execute all bonds, contracts, deeds, notes, mortgages, drafts, money orders, checks, etc.
  • To file, sign all insurance forms, tax returns, and any other documents.
  • To manage, settle, adjust and compromise all the matters of real estate or property.
  • To collect rents, lease, bargain, grant, borrow and mortgage, or sell.
  • To sell any and all bonds, securities or shares of stocks.
  • To enter and perform any agreements, contracts, writing.
  • To make, sign, execute, deliver and acknowledge any agreement or contract.
  • To sue on behalf of the executor of the Power of Attorney.

Execution of Power of Attorney:

  • In the case where NRI is present in India –
  • Step 1: The NRI, with the help of an attorney, will have to get the matter of POA drafted and then typed on stamp paper of appropriate value.
  • Step 2: Then he/she will require visiting the Sub-Registrar’s office with the lawyer and the two witnesses.
  • Step 3: One has to carry photocopy and original copy of POA to the Sub-Registrar’s office and also need to ensure that every person accompanying him/her has their valid identity proof with them.
  • Step 4: Signatures, fingerprints, and photographs will be obtained at the office.
  • Step 5: The POA seeker can collect it on the due date, i.e., after three to five days after the completion of all the formalities, from the office.

 In case the NRI is out of India –

  • Step 1: Before sending the POA document to India the NRIs have to get the document attested at the Indian consulate in their area of residence.

The steps involved in getting the POA attested from the Indian Consulate are:

  • The Power of Attorney document prepared abroad does not require an Indian Stamp paper.
  • The POA terms and conditions can be written on a plain white paper.
  • The NRI should specify all the powers he/she wants to share with the POA holder in the document.
  • He/ she should also explain everything that one wants the document holder to do on his/her behalf.
  • Two copies have to be prepared, and the executor should not sign the document as it has to be in front of the Consular Officer at the time of attestation.
  • The signatures of two witnesses are also required on the POA document.
  • The Documents required at the time attestation in the Indian Consulate are:
  • The POA deed prepared along with the copies
  • The Original Passport and copies of all non-blank pages including the first and last page
  • The copy of proof of Address in the residing country such as a bank statement, utility bill, driving license, etc.
  • Proof of legal status in the residing country such as visa, etc.
  • Two passport size photographs
  • The fees applicable at the time of attestation
  • The witnesses require having proof of identity at the time of signing the POA at the consulate.
  • Step 2: The POA document has to be stamped within three months from the date of receiving the document in India.
  • The stamp duty would be payable accordingly at the time registration of the document in India.
  • At the time of registration of the document, the POA holder will need to give the proof of identity and proof of address along with a witness at the sub-registrar office.