ADVOCATE FOR POWER OF ATTORNEY AT AFFORDABLE AND R...

WHAT IS  A POWER OF ATTORNEY?

‘Power Of Attorney’ is an authority given by an instrument by one person, called as the donor or principal, authorising another person, called donee or agent to act on his behalf. There may be possibility of giving ‘Power Of Attorney’ by two or more persons jointly to one or more persons. Here a legal authority is given by the principal to the agent which may be broad or limited and an agent can take all necessary decisions i.e. financial, property related matters and all other matters where principal cannot be present to sign or in the case of principal’s illness and disability. A paper signed by principal giving powers to an agent is sometimes itself called a power of attorney. A paper giving a power of attorney should be clear and understandable.

 

WHAT IS THE IMPORTANCE OF POWER OF ATTORNEY:

 

‘A power of attorney document is an extremely important part of estate planning yet one of the most misunderstood. It is often convenient or even necessary to have someone else act for you as there is advancement in the business and commerce transactions. As many people confuse the power of attorney (POA) with a will (Probate), but these documents are two very different things and have two very different functions. A will comes into effect on the day person die. A POA applies during a person’s lifetime and ceases to apply when he dies. So you actually need both a POA and a will as they complement, and do not overlap, each other. To add a twist to the subject, there are two types of POA: one for property and one for personal care. These two types are completely separate. They deal with different areas of your life and both are required for effective estate planning.

 

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.

 

WHAT ARE THEIMPORTANT 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.

 

    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..

 

N0TARY 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  IS REGRISTRATION  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 IS REGISTRATION IS OPTIONAL:

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

Executing the Leave and License Agreement,

Signing documents related to society,

Handling court matters eg. filing a case, appointing a lawyer, defending POA grantor, signing necessary documents, etc.