Can Power of Attorney Holder Sell Property to Himself?

This is a very interesting question. Being a law student we have addressed and discussed can power of attorney holder sell property to himself or not in detail. I can share some inputs with you. It is a never ending discussion and in a landmark case, the Supreme Court ruled that: “A Power of Attorney (PoA)  is not an instrument of transfer in regard to any right, title or interest in an immovable property, …immovable property can be legally and lawfully transferred/conveyed only by a registered deed of conveyance.” The SC, however, clarified that the sale and other transactions entered through PoAs or Wills till date will not be affected by that order and will be treated as a valid agreement. So this should answer your query: can a power of attorney change ownership of property or not Create a legally valid sale agreement with the assistance of lawyers through NoBroker Legal Services But, what is a Power of Attorney? The term POA is defined in the Power of Attorney Act,1882 and it says: “Power-of-Attorney” includes any instruments empowering a specified person to act for and in the name of the person executing it.” Basically, it means that a person gives another person the legal right to present himself as his representative, to perform specific tasks on his behalf. This instrument is commonly used by non-resident Indians (NRIs), because it may not be possible for the NRI to visit the country of origin at the specified time, due to businesses or personal works. It is also used by extremely busy people, such as businessmen and people who cannot perform various personal and professional tasks. There are several types of Power of Attorneys assigning different duties to the holders. Here, a question arises, whether a PoA holder can sell the property to himself or not? Since the Power of Attorney holder is also a person legally, it is possible to sell the property to himself. But, it can only be done by a registered sale deed and cannot be transferred through PoA. This should clarify your doubts about the latest supreme court judgement on power of attorney 2021. Read more: What is POA document  

Wondering can GPA holder register property in his own name? If a GPA holder is granted this authority in the Power of Attorney, he is able to sell the property.

The direct answer to your query on can power of attorney holder gift property to himself is Yes, a Power of Attorney holder can sell property to himself, but only through a registered sale deed and not through Power of Attorney. This is because the Power of Attorney holder is also a person legally, and he can sell the property to himself as a buyer. However, it is important to note that the sale must be done in accordance with the law, and the agent must act in the principal’s best interests while avoiding any actions that would benefit them personally.

Moreover, if a power of attorney agent follows the correct formalities, he is not legally prohibited from selling the property to himself. In his capacity as an agent or representative, he is purchasing the property as a buyer. If the passing of consideration is acknowledged and accepted, the completion of a sale deed by a POA agent to himself in the capacity of a buyer is deemed lawful.

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Can GPA holder execute sale deed?

I can tell you that real estate has been one of the preferred asset classes, to park unaccounted money. And if you have invested in real estate, you must already know that over time, numerous ways have been opted to make the investment appear legal, including sale and purchase of property through general power of attorney for property (PoA).

Let me tell you about the supreme court judgement on sale of property through power of attorney.

Landmark judgement on power of attorney

Property sale through power of attorney is an arrangement, which primarily is entered into by two parties with an aim to short-change the law.

The increasing use of this method coincided with the growth in the property market, starting in the 1990s. So much so, that the

Supreme Court (SC) was forced to take cognisance of the matter, and eventually passed a landmark verdict in 2011, declaring property sale through power of attorney illegal

. While stating that property transactions done through general power of attorney (GPA) had no legal sanctity, the Supreme Court (SC) ruled that only registered sale deeds provide any legal holding to such transactions.

Can a person with power of attorney sell property?

Power of attorney holder can’t sell property unless authorised to do so as per SC.

Those with a general power of attorney for property of a property cannot sell it unless there is a specific provision in the document giving them the power to do so, the Supreme Court has ruled. While passing its order on an appeal filed by one a Bench of Justices said the power to sell the property was the subject matter of the power of attorney document and it could not be inferred. The order will have far-reaching implications affecting NRIs and invalids selling property.

Legal peace of mind made easy with NoBroker. Read More: What is GPA in Property?  How long the special power of attorney is valid?  Where to Get Special Power of Attorney?  How to Make Special Power of Attorney? 

A power of attorney (POA) is a crucial legal document that enables a person to designate another person or entity to handle his or her property, medical concerns, and financial matters on his or her behalf while he or she is away. However, there are a few power of attorney rights and limitations, which are as follows;

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• An attorney should not act outside the scope of the power of attorney. If the attorney exceeds their scope of practice, they could be held liable for any harm the donor or others suffer.

• If the attorney violates any conditions, he will be held accountable to the donor unless he acted appropriately.

• The POA may not at any time transfer authority to another Agent.

• When the Principal passes away, the POA loses the power to make financial or legal decisions, and the Executor of the Estate takes over.

• The POA is not permitted to distribute inheritances or transfer property after the Principal's passing.

• No estate planning documents, including the principal's will, may be changed or annulled by the POA.

• The POA cannot change or violate the nomination paperwork's terms; otherwise, they run the danger of being accused of fraud or negligence.

• The POA is not allowed to take any actions that are not in the Principal's best interests.

• Conditions will be imposed with the consent of the Agent and Principal; the POA will not be able to make decisions until the agreement is in effect.

• The POA cannot be legitimately appointed unless the Principal is in perfect physical and mental health.

• The POA is not permitted to treat the Principal's property or funds as their own.

• More money than what is specified in the POA agreement cannot be given to the POA.

• The agent must also stay clear of any potential conflicts of interest. The agent cannot combine or merge their property with the principal's property unless the principal and the agent both control the property prior to executing the power of attorney.

I would completely agree with Apurva’s answer about, whether can power of attorney sell property to himself. I’d like to reiterate that by following the correct steps, a power of attorney agent is not legally prohibited from selling the property to himself. He is purchasing the property as a buyer and selling it on behalf of his principal as his agent or representative. The passing of consideration is crucial, and if it is not contested, a POA agent's execution of a sale deed to himself as a buyer/ power of attorney transferring property to himself is legitimate under the law.

I’d like to conclude here about the power of attorney rights and limitations. I hope this helps:)

Read More:

What is the general power of attorney?  What is the Power Designated in the Power of Attorney? What Power is Levied by the Power of Attorney?

“

Can GPA holder sell the property to himself?” is not an uncommon query. As per my knowledge, a GPA holder can sell the property to himself, as a principal owner and buy the concerned property in a buyer’s capacity.

POA isn’t a valid instrument for transferring property titles. However, selling property through a general power of attorney had become very common in our country, owing to the monetary benefits it provided to both the seller and the buyer.

Generally, the buyer/seller has to carry out the sale deed to transfer property titles, following which the buyer is required to pay registration charges and stamp duty. The seller will also need to pay capital gains tax on the transaction. If the property title is transferred through a GPA, then such charges are avoided.

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“From the perspective of a seller, a GPA allows carrying the transaction even if he doesn’t hold clear property titles. Moreover, GPA is his only choice. From the perspective of a buyer, he can buy a property at much cheaper prices than the market rate. He can also possess a property using this method which otherwise might not have been possible.

For instance, legally, one can’t sell their agricultural land for residential purposes without the conversion of land use. However, most landowners don’t go through the conversion process and sell their land parcels through GPA.

Property owners sell their properties through GPA to avoid some other legal restrictions. In most govt. housing schemes (MHADA, DDA, etc.), where houses are allotted on a leasehold basis, there is a certain gestation period before the allottees can’t sell the property to another party. To avoid this process, they transfer such units through a GPA. In some cases, family members confer property rights through GPA. In many cases, house buyers fall prey to fraud and buy properties without knowing the illegality involved in the traction.

The Registered Power of Attorney Holder Can Sell the Property or Not?

Even if the GPA is registered with the sub-registrar's office, the GPA holder isn’t authorised to sell the property on the behalf of the owner. Moreover, the Supreme Court of India’s latest judgement categorically invalidates the property sale through GPA. A GPA holder only has the authority to carry out tasks given by the owner, excluding the property sale.

I hope now you liked my answer to your “can a person with power of attorney transfer property to themselves” query.

Read more:

What is Power of Attorney for Property?

How to Make Power of Attorney?

This is all on “can gpa holder sell the property to himself.”

Power of Attorney is a crucial document that allows another individual who has been given the authority to sign a contract for the principal. It is a legal document used to transfer the legal right to manage and access the principal’s property when the principal is not able to do so himself or when he willingly allows the PoA holder to perform the said duties as an agent. Here the principal is the original owner of the property, whereas the agent is the PoA holder. I have often been asked

‘Can power of attorney holder sell property to himself?’ I will address this query in this answer. 

At the time of the establishment of the contract, the terms of contract are determined which includes what can be managed and what cannot be managed. The Power of Attorney of any property generally includes real estate, stocks, bank accounts, etc. when a registered PoA authorizes the agent to make the transaction, he can certainly do so however, it does require the free will of the original owner. 

If the Power of Attorney holder is following all the legal procedures then he cannot be barred by law from selling the property to himself. In this case, he sells the property on the behalf of his Principal using the Power of Attorney and buys it as a buyer. If the passing of consideration is not disputed then the sale deed executed by the Power of Attorney to himself as a buyer is completely legal.

If any discrepancy is found in the sale deed, the owner himself can challenge it in the court. In result, the court can quash it as illegal.

Usually PoA is used by Non-Resident Indians, extremely busy people or physically weak or inactive people as it is convenient for them to get a representative in their place to carry out the transaction or sign any deed.