The Power of Attorney (POA) transactions are not some new terminologies that are being used in the Real Estate market, this has always been used to provide other individuals the right to represent another owner of the property. POA has been used since ages as valid legal tool in handling the property related issues, but majority of times people has used it, and it has led to creation of confusion, disagreements and fraud. It is of utmost importance that buyers must be aware of the legal validity and risks involved in the transactions that are being done through POA. POA dealings are majorly treated as a domain where Neevilas suggests that due diligence and care must be taken prior to conducting complete deals.
How POA Works?
A Power of Attorney (POA) enables the principal (the owner of property) to give someone (agent) power to do certain things, e.g. managing, renting, or selling property. A POA is however not a transfer of ownership. This difference is essential, and most consumers make the mistake of thinking that by buying real estate via POA they are granted ownership. Neevilas cites this wrong perception as one of the most prevalent sources of litigation to do with property.
Legal Status of Property Transactions Finalized through POA
Courts from time to time have made it clear about the legal status of POA in Real estate market through numerous judgements. In a recent judgement by the Supreme court, it has been held that POA may not be utilized in place of a registered sale deed and sets to be a pivotal aspect for transaction done through POA. The ownership can only be transferred by way of due registration, payments of stamp duties and with the due execution of the sale deed. the POA can only be used as an instrument that will be required to authorize a person to the property but is not a tool of conveyance. It can be employed in administering it or enabling it to be registered in cases where the owner is not present. The buyers are required to ensure that the POA is specific, registered and experts at Neevilas suggests that it remains in effect during the transaction
Major risks related to POA Transactions
There are numerous risks that are there if the buyers try to deal with the POA. Underlisted are some major risks that are involved through transactions by POA.
- The POA can be revoked by the principal anytime.
- On the death of principal, POA terminates on its own.
- Frauds can be caused by the Agents, as transactions can be done through them even without complete validation and consent.
- Buyers can also have difficulty in attaining home loans based on transactions through POA.
Transactions that are being done through the Power of Attorneys may tend to have major legal risks or they can be easily misinterpreted. Although, POA are created validly to manage the property, and it does not lead to any opportunity of legal transfer of ownership. Whenever buyers emphasize on good documentation, legal certainty and professional inspection, they cut his exposure to controversy by a big margin. The ability to stay updated with reliable sources of real estate information such as Neevilas would make buyers more aware of the risks and benefits of the POA transactions and navigate them more cautiously
