Why do NRIs need a Power of Attorney?

A Power of Attorney (POA) is a person who is legally responsible for the actions and misdeeds of the principal person they represent as a home-buyer. In India, many property buyers use a POA to help them with transactions related to purchasing a home. These transactions may include capital purchase of land or home, lease, sale of the property, or mortgage. When purchasing a home, you must hire a trusted and reliable power of attorney to assist you with the purchase process. A POA is commonly used by non-resident Indians (NRIs) looking to purchase property in India.

The power of attorney (POA) in real estate plays a crucial role in the process of buying or selling a home. For a long time, the power of the POA has been misused as they have been used to avoid paying the capital gains tax which has resulted in the investment of the black money. The Supreme Court has passed a law that states that the POA should be used only for real transactions and not for the transfer of title or right to any other person or property. Or, any POA who is assigned to assist in the transaction of the property should register with a Sub-registrar in the jurisdiction in which the buyer is domiciled. In the case of home-buyers who are non-resident Indians (NRIs), the POA they have chosen should be confirmed by the consulate of their country of domicile.

Power of Attorney (POA) is one of the most important documents in real estate transactions for non-resident Indians (NRIs). Under the Indian Registration Act, both parties must register a real estate transaction when they buy or sell a home. The buyer and seller must both present their signatures on the documents, which must be verified by the registered office of the city in which the transaction is carried out. The POA can be appointed by the buyer if the buyer is unable to attend the signing of the documents. A close relative can also be appointed as a POA if the homeowner is in bed and unable to perform the duties related to the real estate transaction. The POA is responsible for all the actions and deeds in this case.

Appointing the Power of Attorney (POA) for an NRI can be done in two ways: 

Apostalisation: The Hague Convention in 1961 stipulated that all legal documents that are signed by an NRI must be authenticated by the local authorities in the country where they are purchased or sold. This process is known as capitalization and helps to ensure that the POA is following the relevant local law. 

Legalise the Documents: The previous documents must be verified by the Indian Embassy before the POA is assigned before the judge. The documents do not have to be stamped at the time of assignment, but within 3 months of the POA being executed.

Benefits of Power of Attorney 

Lower cost: A Power of Attorney is used to avoid external costs incurred by an NRI because they live abroad, such as stamp duty, miscellaneous taxes, etc. Hire a trusted Power of attorney 

Convenience for the owner: The power of attorney takes care of the property transactions for the homeowner. However, the buyer of the property retains the power to terminate the assigned duties of the POA as he or she pleases. This means that the owner has complete control over the POA. Under no circumstances can the POA claim ownership of the property.

As an NRI, it can be difficult to keep up with the process of buying or selling your new home. Appointing a Power of Attorney (POA) in your home country is not only practical but also safe. If there is a new rule by the government or a property developer that requires you to sign certain documents, your POA can do so on your behalf. Or, if you are a victim of fraud in real estate transactions, your POA will be able to provide evidence in court. A POA can help you with your home-buying by managing your personal, legal, and financial affairs. The POA will be responsible for overseeing the legal and financial processes of the property, so you must appoint someone trustworthy and honest. It is easy to appoint a POA in your home country, and it is highly recommended that you do so as an NRI.


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