Buying a Flat on a Power of Attorney: Why It Is Not Title

Every few months a Bengaluru buyer is offered a flat at a tempting discount, with the explanation that it will be sold on a power of attorney to save on stamp duty and paperwork. It sounds efficient. It is also one of the oldest traps in Indian real estate. The Supreme Court settled the point years ago: a power of attorney does not make you the owner of a flat, no matter what you pay. A discount that comes with a GPA instead of a registered sale deed is not a saving, it is a risk wearing the costume of one, and the risk falls squarely on the buyer.

The short answer. A general power of attorney, or GPA, authorises someone to act on an owner's behalf; it does not transfer ownership. In the Suraj Lamp ruling the Supreme Court held that so-called GPA sales and sale-agreement-plus-GPA arrangements do not convey title, and that immovable property is validly transferred only by a registered sale deed. The trade-off some sellers dangle is a lower price or less stamp duty in exchange for taking the flat on a GPA, but what you actually give up is ownership itself, which is never worth the discount.

What did the Supreme Court actually decide?

It decided that a GPA, a sale agreement and possession do not add up to ownership, and that only a registered sale deed does. As summarised in Outlook Money's report on the position, the only proof of property ownership is a registered sale deed, and a GPA, sale agreement or payment receipt does not by itself transfer ownership. The court's wider reasoning in the Suraj Lamp case was that a GPA sale neither conveys title nor creates an interest in the property, so the practice cannot be treated as a completed sale. Possession is not ownership, and payment is not ownership; the registered deed is. That is the whole of it, and it has been the law for well over a decade.

The ruling did not ban powers of attorney. It drew a line between using a GPA for its proper purpose and misusing it as a substitute for a sale. The judgment also left intact the narrow protection that a buyer in possession under a part-performed agreement has under Section 53A of the Transfer of Property Act, which can stop a seller from evicting them. But that protection, as the court itself noted, is a defence over possession and not a source of title, so it does not turn a GPA holder into an owner. The practical effect of the ruling was that registration and revenue authorities were directed to stop treating GPA arrangements as sales, which is why a GPA will not get you a clean mutation or a loan today.

What can a power of attorney legitimately do?

A GPA lets an agent act for the owner, including signing and registering a sale deed on the owner's behalf. This is genuinely useful when an owner is abroad or cannot attend the sub-registrar office, and the court was clear that genuine powers of attorney for management and similar purposes remain valid. The crucial distinction is that in a proper transaction the GPA holder executes a registered sale deed in favour of the buyer, so the transfer still happens through the deed. What the law rejects is the shortcut where the buyer is handed a GPA, a sale agreement and possession, and no sale deed is ever registered. In that version the owner never actually transferred the flat, and the buyer never actually received it in law. In Karnataka there are also cost and formality signals that tell you which kind of GPA you are dealing with. A power of attorney authorising a sale to someone who is not a close relative attracts stamp duty of around two percent of the property value, which can usually be adjusted against the duty on the eventual sale deed, while a power to a close family member is stamped nominally. A genuine owner arranging to be represented will register and stamp the GPA properly; a GPA offered as a cheaper alternative to a sale deed is exactly the arrangement the Supreme Court said does not work. The paperwork, in other words, often reveals the intent.

Why is buying on a GPA so risky for the buyer?

Because you pay in full and still do not own the flat, which leaves you exposed on several fronts. A principal can revoke a GPA, and a GPA ends on the death of the principal, so the authority you are relying on can simply vanish. If the seller or the seller's heirs later dispute the deal, a GPA buyer has no clean legal standing, because no title ever passed. There are also stories of agents misusing a GPA to sell, mortgage or transfer a property without the owner's knowledge, which is a risk to owners who grant one as much as to buyers who rely on one. On top of all this, a GPA-held flat is hard to resell and hard to mortgage, because the next buyer and their bank will ask for the one document you do not have, a registered sale deed in your name. The risk is especially acute for buyers dealing with sellers who are abroad, where a relative or agent holds the GPA. If that agent oversteps the authority, or the owner revokes it, the buyer can be left holding payments and possession with no enforceable claim. The cleanest protection is to make sure the transfer itself is a registered sale deed in your name, so that whatever happens to the GPA afterwards, your ownership is already recorded and secure.

How do a GPA and a sale deed compare?

The table below sets a GPA against a registered sale deed on the points that decide whether you actually own the flat.

What should a buyer insist on instead?

You insist on a registered sale deed from the rightful owner, and treat a GPA only as the owner's tool for being represented. The steps below set out a safe approach.

1. Decline any structure where you take the flat on a GPA rather than a registered sale deed in your name.
2. Confirm the seller named in the title documents is the one selling, and check the chain of title with a lawyer.
3. If the owner is represented by a GPA holder, confirm the GPA is registered, valid, specific to this sale and not revoked.
4. Check that the principal who granted the GPA is alive, since the authority ends on death.
5. Ensure the GPA holder executes a registered sale deed in your favour, so the transfer happens through the deed.
6. Verify the seller's name in the revenue and khata records before you pay the balance.
7. Register the sale deed and keep the registration number, because that is your proof of ownership.

What goes wrong, and who gets hurt?

Both buyers and owners get hurt by GPA arrangements. Buyers lose money for a flat they do not legally own and cannot cleanly resell, and owners who grant a wide GPA can find their property dealt with behind their backs. The practice persists because it can look cheaper and faster, often to sidestep stamp duty, but the saving is illusory against the loss of title. The same principle runs through the sale process: our guide to the difference between a sale agreement and a sale deed explains why only the registered deed transfers ownership, and our explainer on what a possession document proves covers why holding the keys is not the same as holding title. When you buy a specific resale unit, say at L&T Thanisandra, the test is simple: is the seller giving you a registered sale deed, or asking you to settle for a power of attorney?

Frequently asked questions

Does a power of attorney transfer ownership of a property?

No. A general power of attorney authorises an agent to act for the owner; it does not transfer title. The Supreme Court held in the Suraj Lamp case that GPA sales do not convey ownership or create an interest in the property, and that immovable property is validly transferred only through a registered sale deed.

Can I buy a flat that is being sold on a GPA?

You should insist on a registered sale deed instead. If you take the flat on a GPA alone, you pay in full without becoming the legal owner, and you will struggle to resell or mortgage it. A GPA is acceptable only as the owner's way to be represented, with a registered sale deed still executed in your favour.

Why do some sellers prefer GPA sales?

Often to pay less stamp duty or move faster, and sometimes to work around ownership or record issues. Whatever the reason, the saving is illusory for the buyer, because a GPA does not transfer title. What looks like a cheaper deal leaves you without ownership, which is far more costly than the stamp duty it appears to save.

Can a power of attorney be cancelled after I pay?

Yes. A principal can revoke a GPA, and it ends automatically on the principal's death, so the authority you rely on can disappear after you have paid. This is one reason a GPA is no substitute for a registered sale deed, which transfers title to you permanently and cannot be revoked once executed.

The short version: a power of attorney is a tool for acting on an owner's behalf, not a way to become the owner. Buy only on a registered sale deed, and treat a GPA-only offer as a warning, not a bargain, however attractive the discount that comes attached to it may first appear.

Last updated 2026-10-08. PropNewz Team.