Power of Attorney in Property Deals: When It's Fine, When It's a Trap

A Power of Attorney sits behind a surprising number of property deals in south Chennai, and most of the time it is completely ordinary. An NRI owner in Dubai cannot fly down to sign a sale deed at the Velachery sub-registrar, so she authorises her brother to do it for her. An elderly owner in Nanganallur, unwell and tired of running between offices, asks a trusted son to handle the registration. Both are normal, lawful, and nothing to lose sleep over.

The trouble starts when a POA stops being a convenience and becomes the deal itself. Buyers in Chennai are still offered flats and plots "on GPA", priced a little below the market, with a general power of attorney, an agreement to sell and a will handed over in place of a registered sale deed. It looks like a transfer. It feels like a transfer. Legally it is not one, and that gap is where people lose lakhs.

This guide explains, in plain terms, when a Power of Attorney is fine and when it should stop you cold. Treat it as general buyer education, not advice on your specific transaction. For any POA-based deal, have your own advocate read the actual document and the title chain before you pay a rupee.

What a Power of Attorney actually is

A Power of Attorney is a document by which one person, the principal, authorises another, the agent or attorney-holder, to act on their behalf. In property matters that might mean signing documents, appearing before the sub-registrar, collecting payments or managing a property. Here is the point most buyers miss. A POA is an authority to act for the owner. By itself it does not transfer ownership to the person holding it.

General POA versus Special POA

This distinction matters far more than most buyers realise.

• Special (or specific) POA: grants narrow, defined powers for one transaction or one purpose. For example, "to execute and register the sale deed for my flat at door number X, Medavakkam, in favour of the buyer". Once that act is done, the authority is spent. This is the cleaner, safer form for a one-off sale.
• General POA (GPA): grants broad powers, often covering several acts at once: managing, leasing, selling, mortgaging, signing on the principal's behalf. It is genuinely useful when an owner needs someone to handle a range of matters over time. It is also the instrument that gets abused in so-called GPA sales.

Neither form is good or bad on its own. A registered special POA used to complete a proper registered sale deed is routine. A general POA waved around as a substitute for that sale deed is the problem.

The legitimate uses, and they are common

Most POAs you will run into in a south Chennai deal are honest and necessary. Learn to recognise the genuine cases so you do not panic over a perfectly normal document.

• The out-of-station or NRI owner: someone living in Bengaluru, Singapore or the Gulf authorises a relative here to execute the sale deed and complete registration. NRIs face extra documentation and attestation steps, covered in our NRI flat-buying guide.
• The elderly or unwell owner: a senior citizen appoints a trusted son, daughter or sibling to handle formalities they cannot manage in person.
• The co-owner who cannot attend: in jointly owned property, one owner gives a POA so the deal need not wait on everyone's travel schedule.
• Builder and developer arrangements: in many projects the landowner gives the developer a POA to sell built-up units. This is standard in joint development, though it deserves its own careful read.

In every one of these, the POA is a tool that helps complete a real, registered sale. The buyer still receives a properly executed and registered sale deed in their own name. That deed is what conveys ownership. The POA simply allowed the right person to sign it.

The red flag: the GPA "sale"

Here is the structure that should make you stop. A property is offered to you not through a sale deed, but through a package: a general power of attorney in your favour, an agreement to sell, a will, and sometimes a possession receipt. No registered sale deed puts the title in your name. The seller explains that this is cheaper, that it saves stamp duty, that "everyone does it like this". The price is attractive precisely because the title is not clean.

This is the GPA sale, and it does not give you ownership. A POA authorises someone to act for the owner; it does not make the holder the owner. An agreement to sell is a promise to sell in future, not a transfer. A will takes effect only on death and can be changed any time before that. Stack all three together and you still do not hold title. You hold a bundle of paper that imitates a transfer without being one.

What the Supreme Court has said

This is not just a cautious lawyer's opinion. The Supreme Court of India, in the decision usually cited as Suraj Lamp & Industries (2011), held that so-called SA/GPA/WILL transfers, that is, transactions of immovable property done through an agreement to sell, a general power of attorney and a will, do not convey title or create any interest in the property. They are not recognised as legal modes of transfer. Ownership of immovable property passes only through a properly stamped and registered deed of conveyance. Courts and authorities have followed that line consistently since.

In practice, a GPA buyer is exposed on several fronts at once.

• You do not get a clean, marketable title, which makes the property hard to resell and hard to mortgage for a loan.
• A POA is generally revocable, and it lapses automatically on the death of the principal. If the original owner revokes it or passes away, the authority you were relying on can collapse.
• The original owner, or their legal heirs, can later dispute the transaction and claim the property back.
• Banks are wary of lending against GPA-held property, so your future buyer pool shrinks to other cash GPA buyers, which deepens the discount when you try to exit.
• You may hit problems with mutation, patta transfer and getting clean property tax records into your own name.

How to verify a Power of Attorney

Even when a POA is part of a perfectly legitimate deal, you still verify it carefully. The person signing for the owner has real authority only if the document checks out. Work through these points with your advocate.

Is it registered?

For a POA authorising the sale of immovable property, insist on a registered POA, not merely a notarised one. A registered instrument carries far more weight, sits on record with the sub-registrar, and is much harder to fabricate after the fact. Verify the registration particulars against the registration department's records. If the only authority on offer is a casually notarised general POA for a sale, that alone is reason to slow right down.

Is it still valid and not revoked?

A POA can be revoked by the principal. Confirm it is still in force on the date of your transaction. A registered deed of revocation would itself be recorded, so a proper search and due diligence can surface it. Do not rely on the attorney-holder's word that the document is current.

Is the principal alive?

A Power of Attorney lapses on the death of the principal. If the owner who granted it has died, the authority is gone, and a sale signed under it after that date stands on very shaky ground. Confirm the principal is alive and of sound mind at the time of execution. This is exactly why a will bundled into a GPA sale should worry you. It quietly anticipates the owner's death, the very moment after which the POA becomes worthless.

What exact powers were granted?

Read the operative clauses, not just the title of the document. A POA might authorise management and leasing but not sale. It might cover a different property altogether, or restrict the attorney to dealing only with a named buyer. The power to execute and register a sale deed must be clearly and specifically present. If the document does not plainly authorise the sale in front of you, the signature on your deed may not bind the owner at all.

• Confirm the principal's identity and ownership through the title chain and the encumbrance certificate and patta records.
• Match the property described in the POA exactly against the property you are buying.
• Check that the attorney-holder named in the POA is the same person signing your sale deed.
• Have the original POA produced and verified, not a photocopy.
• Where possible, get the principal's confirmation directly, even a short video call for an NRI owner, that the POA stands and the sale is authorised.

The safe rule for buyers

Strip away the jargon and the rule is simple. Title to a flat or plot should always reach you through a properly registered sale deed in your own name, with full stamp duty and registration charges paid. A POA can assist that process. It can never replace it.

If someone is steering you away from a registered sale deed and towards a GPA arrangement to "save money", be clear-eyed about what is being saved and at whose risk. The stamp duty you skip is small next to the value of a clean title. The stamp duty and registration charges in Tamil Nadu are a cost of doing the deal properly, and they are worth paying. A discounted GPA property is no bargain if you can never sell it cleanly, mortgage it, or defend it against the owner's heirs.

This risk is one item on a longer list of things that go wrong in Chennai deals. It pairs naturally with broader builder and seller red flags and with the discipline of a full property documents check before you commit to anything.

In short

• A POA is an authority to act for an owner. On its own it does not make the holder the owner.
• Special POAs for a single sale are cleaner. Broad general POAs are the ones abused in GPA sales.
• NRI, out-of-station and elderly owners using a registered POA to complete a proper registered sale is entirely normal.
• A GPA sale built on a general power of attorney, an agreement and a will does not convey title. The Supreme Court has held exactly that.
• Verify any POA for registration, validity, whether it has been revoked, whether the principal is alive, and the precise powers granted.
• Insist that ownership reaches you through a registered sale deed in your own name.

None of this should scare you off a legitimate POA-assisted deal, which is common and safe when handled right. But a POA-based transaction is the one place where do-it-yourself due diligence is not enough. Have an advocate read the actual document and the title chain before you part with money. For related reading, see our guides on TNRERA and checking a project, the property documents field checklist, encumbrance certificate, patta and chitta and vetting a local builder. If you are weighing a POA-based property in south Chennai and want a second set of eyes before you commit, reach out to our team.