While the role of capital, location, and approvals from the municipal authorities play a crucial role in purchasing a property, there are some other factors that the buyer needs to consider as well. Buying fixed assets such as land and properties requires a series of steps, which, if not adhered to, could lead to loss of time and other vital resources.
One such legal factor is a power of attorney for property, which, put in simple words, is a legal instrument under the law that allows the buyer/owner to appoint another person to manage their property, legal, medical affairs, and finances. Governed under The Property Act 1888, the buyer, who lends the power of representing them to an individual, is called the principal, donor, or grantor. On the other hand, the representative authorised to do this work is called the agent or power of attorney agent.
However, the registration for power of attorney for property is optional. Nevertheless, every act performed by the attorney is legally binding upon the principal granting it, making it necessary for the property owner to be extra vigilant while handing out these responsibilities, whether it be granting limited or extensive authority.
There broadly exist four types of power of attorney discussed as follows.
1. Conventional Power of Attorney
Also known as the General Power of Attorney or Limited Power of Attorney based on the degree of responsibility assigned, this refers to a specific responsibility for a specified time. The POA has the power to make personal and business decisions. Nonetheless, while the agent may have a lot of authority, it exists for a limited period and could be nullified under the following circumstances.
- The principal decides to revoke the power themselves.
- In the case of the death of the principal or agent.
- The principal is not in sound mind or bankrupt.
- The task for which the agent was appointed is fulfilled.
- The principal is declared adjudged insolvent.
- As the course of time agreed upon comes to an end.
2. Durable Power of Attorney
In this case, a power of attorney exists for a lifetime. In this situation, the POA can decide if the principal becomes incapacitated or unfit to make decisions. The agent continues to take responsibility until the grantor’s death or if they cancel the POA.
For example, if the principal isn’t in his senses and prefers their partner to be the agent, it can be considered durable power of attorney.
3. Springing Power of Attorney
The Springing POA is used during a specific case, event, date, or condition and when the principal becomes incapacitated. The most common example used to describe this type of attorney is when military members are employed overseas, who, before leaving, may appoint a Springing POA to make decisions relating to finance and health on their behalf in case of any event.
4. Medical Power of Attorney
Falling under both the Durable Power of Attorney and Springing Power of Attorney, the Medical POA is most often used for healthcare decisions. However, this cannot be availed of until the principal is of sound mind and body. The principal is advised to create a living will, allowing their agent to follow their treatment preferences.
Having discussed the four broader terms of POA, there also exists the Irrevocable Power of Attorney, Execution of Power of Attorney, and Registration and Stamp.
The right to choose the Power of Attorney for property
Not an easy decision to make, but here are some requirements that qualify you for the post of POA.
- The principal should trust the individual.
- Should be above 18 years of age and be of sound mind.
Before making any decision, the personal traits of the potential POA need to be taken into account, one of which is the value system. The individual selected for the job should be articulate and firm in decision-making.
Can a Power of Attorney be revoked?
The answer to this question is Yes. The POA can be revoked or cancelled anytime, as long as the principal is of sound mind and competent. During this process, the grantor needs to inform the agent in writing, sign the revocation letter in the presence of a notary in public, and deliver it to the attorney in concern. The letter is to be sent to all the parties concerning the grantor. In a situation where the POA was executed in the recorder’s office, the revocation letter should be signed in the same setting.
Power of Attorney format
The POA is a legal document that gives another person the right to act on your behalf in financial and legal matters. The typical attorney format consists of the following details.
- Identifying the grantor/principal
- Identifying the agent
- The scope of authority
- Duration
- The required signatures
- Revocation
- Notarisation
Conclusion
Though not a necessary obligation, hiring a POA's services could serve many benefits depending on the principal’s needs and preferences. Hopefully, the above blog has fulfilled the role of a practical guide to understanding the subject of Power of Attorney in detail.
