Why NRI Needs Power Of Attorney To Buy Real Estate In India?

The importance of Power of Attorney for an NRI looking to invest in Indian real estate

What is Power of Attorney (POA)?

A Power of Attorney (POA) is a legal authorisation provided to another individual to clearly define actions or decisions on behalf of the executor. The one who writes the Deed, is called the Grantor. The one who acts on the Grantor's behalf is the Agent or Attorney.

According to the Registration Act of 1908, when an NRI buys or sells residential property in India, the physical presence of both the parties is required to register the transaction. So, if the NRI cannot be present, he/she must appoint someone trusted as the POA to sign the documents.

The Power of Attorney needs to be registered with the respective sub-registrar. The Power of Attorney can be executed in India or overseas where the NRI/OCI customer is residing.

NRIs can use a specific Power of Attorney to authorise an individual to purchase a property in India, on their behalf. However, one needs to ensure that the POA is registered in India, after the stamp duty is paid. If a property is bought through a General POA, the buyer must have the property's possession and a registered Sale Deed.

Steps to Execute a Power of Attorney (POA)

POA can be executed in India if all NRI applicant/s are physically present in India before disbursement or it can be executed overseas.

If a customer is executing POA overseas, the POA document must be filled, photographs of NRI applicant/s and POA holder must be pasted & all pages signed across by the NRI applicant/s. It should be attested either through the Indian Embassy/Consulate* or Public Notary in that country. After getting it attested the original copy must be couriered to the POA holder in India and further notarised along with the POA holder’s signature.

*In Gulf Cooperation Council (GCC) countries only attestation from the Indian Embassy is accepted.

If the customer is executing the POA in India the POA document must be franked as per state value and further notarised/adjudicated. The POA document must be filled in, photographs of all NRI applicant/s & POA holder pasted and all pages signed across by all NRI applicant/s and the POA holder.

Documentation for Home Loans for NRI property buyers

If you take a Home Loan to buy a property in India, ensure you prepare the required documents. If you are an NRI/OCI-salaried customer, you can apply digitally through ICICI Bank Express Home Loan in 5 simple steps. You must keep your KYC and income documents ready before you initiate the journey. You must sign and submit the Power of Attorney document before disbursement. Consider checking the lending bank's website for other necessary documents, to apply successfully.

Go through other ICICI Bank blog posts, to know more about NRI property investments in the Indian real estate or Home Loans for NRIs arena.

Frequently Asked Question

How does power of attorney work for NRI?

If the NRI individual is not physically present in India for either or both property registration and loan disbursement he must execute a general POA authorising the person who would carry out the transaction on his behalf.

How long is the NRI Power of Attorney valid?

To execute a POA the POA document must be attested by the Indian Embassy or public notary hence, there is no validity of the document. Ideally a POA is executed before the property registration or before loan disbursement.