Did You Know | Property sale through general power of attorney not possible anymore

Did You Know | Property sale through general power of attorney not possible anymore

Property sale through the common practice of issuing a general power of attorney (GPA) will not give ownership of the property title to the buyer. A deal done on the basis of a GPA will give you the possession of the property, but will not ensure that the title deed is in your name. Already, banks do not finance a property bought on the basis of GPA.

The Development

The Exceptions

The apex court has, however, clarified that property sale under genuine transactions through GPA will be considered legal. For example, a person may give a power of attorney to his spouse, son, daughter, brother, sister or a relative to manage his affairs or to execute a deed of conveyance. The court added that a person can enter into a development agreement with a land developer or builder for developing the land either by forming plots or by constructing apartment buildings. In that connection he can execute an agreement of sale and grant a power of attorney that will allow the developer to further sell the property to prospective homebuyers.

The Impact

The ruling will have an impact on transactions of both freehold and leasehold properties, which are often sold and purchased on the basis of a GPA. The order will apply on all future deals as well as those done in the past. The order will also help in reducing the number of cases pertaining to property tax frauds and flow of unaccounted money into real estate.

What It Means For You

The ruling will save you from being cheated since sale on mere GPA will not be possible. This means there will be fewer title disputes.

If you have a property bought through a GPA, you need to get it registered by appearing before the local magistrate and declaring your ownership rights along with all relevant documents.