Power of Attorney for NRIs Buying Property in Bangalore

An NRI who buys a home in Bangalore from abroad usually completes the purchase through a power of attorney. This article explains what the document does, how it is signed and attested overseas, how it is stamped in Karnataka, and which powers it should list. It also covers the choice of attorney, the home loan side, and how the authority is cancelled once the work is done.

What a Power of Attorney Does in a Purchase

A power of attorney is a written authority under the Powers of Attorney Act, 1882. The buyer, called the principal, appoints a person in India, called the attorney or agent, to act in the buyer's name. Whatever the attorney signs within that authority binds the buyer as if the buyer had signed it.

In a home purchase, the attorney signs the agreement for sale, presents the sale deed at the sub-registrar's office and takes possession. The home stays the buyer's property throughout, and the attorney gains no share in it. Buying a property from a seller who holds only a general power of attorney is a different matter, with its own title risks.

General or Special: Which One a Buyer Needs

A general power of attorney hands over a wide range of acts, across properties and bank matters. A special power of attorney covers one named property and a listed set of acts. For a single purchase in Bangalore, the special form is the right fit.

The narrow document is easier for a sub-registrar, a developer and a bank to accept, because each of them looks for the exact act in the text. It also limits the damage if the relationship with the attorney changes. Wide powers that the purchase does not need are best left out.

Signing and Attesting the Document Abroad

The Registration Act, 1908 sets the standard for a power of attorney used to present a deed for registration. Under section 33, a principal who lives outside India signs it before a notary public, a court, a judge, a magistrate or an Indian consul or vice-consul. That officer then authenticates the document.

In practice, two routes are used:

• Signing at the Indian embassy or consulate, where a consular officer attests the buyer's signature
• Signing before a local notary and then obtaining an apostille, in a country that is a member of the Hague Apostille Convention

India is a member of the Apostille Convention, as are the United States, the United Kingdom and Australia. In a country outside the convention, the consulate route applies. The consulate lists its own requirements, which usually include the passport, the draft document, photographs and witnesses, so the buyer should read them before booking a slot.

Stamping the Document in Karnataka

A power of attorney signed abroad carries no Indian stamp duty when it is executed. The Karnataka Stamp Act, 1957 allows a document signed outside India to be stamped within three months after it is first received in India. The clock therefore starts when the original reaches the attorney, and the courier receipt is worth keeping as proof of that date.

The attorney presents the original to the District Registrar's office, which checks it and collects the duty. The Karnataka Stamp (Amendment) Act, 2023, notified on 3 February 2024, raised the duty on a simple power of attorney from Rs. 100 to Rs. 500. A document that misses the three-month window is treated as unstamped, and a penalty is charged before it is accepted.

The duty on the power of attorney is separate from the cost of the purchase itself. On a home above Rs. 45 Lakhs, stamp duty is 5%, which comes to 5.6% with the cess and surcharge, and the registration fee is 2%. The attorney pays these on the sale deed from funds the buyer sends.

Powers the Document Should List

Each act the attorney will carry out should appear in the text in plain words. A typical purchase needs these powers:

• To sign the booking form, the allotment letter and the agreement for sale with the developer or seller
• To sign the sale deed as purchaser and present it for registration at the sub-registrar's office
• To pay the stamp duty, the registration fee and the instalments from the buyer's own bank account
• To take possession, sign the handover papers and collect the original documents
• To apply for the khata, the electricity and water connections and the property tax record in the buyer's name
• To sign the home loan papers and deposit the title deeds with the lender, where a loan is planned

The property should be identified fully: the project name, the flat number and tower for an apartment, or the survey number, village and taluk for land. The attorney should be identified by full name, address and PAN. A clause that bars the attorney from passing the powers to someone else keeps control with the person the buyer chose.

Two more clauses protect the buyer. The first sets an end, either a date or the completion of the purchase. The second states that the buyer may revoke the authority at any time by written notice.

Choosing the Attorney

The attorney signs binding papers and handles the buyer's money, so trust comes first. A parent, sibling or other close relative who lives in or near Bangalore is the usual choice. The person needs time for visits to the developer's office, the bank and the sub-registrar's office, often at short notice.

A person who earns from the sale is a poor choice. An employee of the developer or a broker on commission has an interest in closing the deal, which may differ from the buyer's interest. Where no relative is available, a lawyer the buyer has engaged directly is a workable option.

The Home Loan and Payment Side

A lender in India accepts a power of attorney for loan papers only when the document names those acts. Several banks ask for their own wording, so the draft should go to the chosen lender before it is signed abroad. One document that covers both the purchase and the loan saves a second round of attestation.

The money for the purchase comes through banking channels: a remittance from abroad, or the buyer's NRE, NRO or FCNR account. The attorney may operate the payments, but the funds remain the buyer's. Our NRI page explains how we assist buyers abroad, and the EMI calculator shows the monthly cost of a loan.

Common Mistakes

Most problems with these documents come from a short list of errors, each of which is easy to prevent at the drafting stage:

• Using a broad general authority where a property-specific one would do
• Signing before a notary abroad without the apostille or consular attestation that makes the document usable in India
• Letting the three months for stamping in Karnataka pass after the document arrives
• Appointing a person with a commission or other stake in the sale
• Leaving out the loan powers, the end date or the bar on delegation

Ending the Authority

A power of attorney ends when its stated purpose is complete or its end date arrives. It also ends on the death of the buyer, and the buyer may cancel it earlier. Cancellation is done by a written deed of revocation, sent to the attorney and to every office that holds a copy.

Where the original was registered, the revocation is registered at the same office. The developer, the bank and the housing society should each receive a copy. Collecting the original document back from the attorney closes the matter.

This article is general information for buyers. A lawyer in Karnataka should draft the document and confirm the stamp duty that applies to its exact terms.