Power of Attorney Property Purchase Risks in Bengaluru

A Bengaluru buyer is offered a flat at a tempting discount, with one catch, the sale will be done through a general power of attorney rather than a registered sale deed from the owner. The price looks like a bargain. It is usually a warning. A general power of attorney does not transfer ownership, and a Supreme Court ruling made clear that such transfers do not convey title, leaving so called GPA buyers exposed.

Power of attorney has legitimate uses in property, but it is also the wrapper around some of the riskiest transactions in the market. Knowing when a power of attorney is acceptable and when it is a red flag protects a buyer from paying full price for incomplete ownership. This guide explains how it works and where the danger lies.

The short answer. A power of attorney authorises someone to act for an owner, but it does not by itself transfer ownership, and a general power of attorney sale does not give the buyer valid title. The trade off, a properly limited registered power of attorney can legitimately let an agent execute a genuine registered sale deed, but buying through a GPA in place of a sale deed leaves you without clean ownership, so the discount rarely justifies the risk.

What is a power of attorney in property dealings?

A power of attorney is a legal document by which an owner, the principal, authorises another person, the agent, to act on their behalf, for example to sign documents or complete a registration. It can be general, granting broad powers, or specific, limited to a defined act. It is a tool of delegation, not a transfer of ownership in itself.

In property, a power of attorney is commonly used when an owner cannot be present, such as an NRI authorising a relative to handle a sale, or a developer authorised under a joint development agreement to sell units. Used this way, with a genuine registered sale deed at the end, it is legitimate. The problem arises when the power of attorney is used as a substitute for the sale deed.

Why is a GPA sale a red flag?

A general power of attorney sale, where a buyer pays for a property and receives only a GPA rather than a registered sale deed, does not transfer ownership. The Supreme Court has held that GPA transactions do not convey title, meaning a GPA buyer is not the legal owner. The arrangement is often used to avoid stamp duty or to deal with properties that have title problems.

That is precisely why it is dangerous. The discount on a GPA deal usually reflects a defect, an unclear title, an unauthorised sub sale, or an attempt to dodge duty, and the buyer inherits the defect without owning the property. A genuine seller with clean title has every reason to give you a registered sale deed, so a refusal to do so is itself a signal.

When is a power of attorney acceptable?

A power of attorney is acceptable when it is a means to a genuine registered sale deed, not a replacement for it. If an owner abroad grants a properly drafted, registered power of attorney to a trusted person to execute the actual sale deed on their behalf, and the deed is then registered and duty paid, the transaction can be sound. The key is that ownership still passes through a registered deed.

Even then, scrutinise the power of attorney itself, that it is validly executed and registered, that it genuinely authorises the specific sale, that it has not been revoked, and that the principal is alive, since a power of attorney generally lapses on the death of the principal. PropNewz has covered how to confirm a clean title through the mother deed and chain of title, which applies regardless of who signs.

How does a buyer verify a power of attorney transaction?

Confirm the power of attorney is registered, current and specific to the transaction, and that it was granted by the genuine owner with clean title. Insist that the final transfer is a registered sale deed, not just the power of attorney. Check that the principal is alive and has not revoked the authority, and where possible, prefer the owner executing the deed directly.

Banks and careful buyers are wary of power of attorney transactions for good reason, and a property bought through a GPA is harder to resell and to finance. If a seller insists on a GPA route and resists a proper registered deed, treat the resistance as the answer and walk away, however attractive the price looks.

What is the honest trade off?

The temptation of a GPA deal is the price, often well below market, and the apparent simplicity. The reality is that you may pay real money for ownership you do not legally hold, on a property you cannot cleanly resell or mortgage, with a defect baked in. The saving is illusory when weighed against the risk of defective title.

The disciplined position is simple, use a power of attorney only as a route to a genuine registered sale deed, never as a substitute for it. The table below sets out acceptable and risky uses so a buyer can tell the legitimate delegation from the red flag. When in doubt, insist on the owner and a registered deed.

Run this seven point check on any power of attorney transaction.

1. Insist that ownership passes through a registered sale deed, not a GPA.
2. Confirm the power of attorney is registered and specific to the sale.
3. Verify it was granted by the genuine owner with clean title.
4. Check the principal is alive and has not revoked the authority.
5. Treat a discount offered only via GPA as a warning sign.
6. Confirm a bank will finance the property, since refusal signals risk.
7. Where possible, have the owner execute the deed directly.

What is the honest trade off?

The temptation of a GPA deal is the price, often well below market, and the apparent simplicity. The reality is that you may pay real money for ownership you do not legally hold, on a property you cannot cleanly resell or mortgage, with a defect baked in. The saving is illusory when weighed against the risk of defective title, so the disciplined buyer treats the GPA only as a step toward a registered deed.

How do legitimate power of attorney cases work safely?

The most common legitimate use is an owner living abroad. An NRI seller can grant a specific power of attorney to a trusted person in India to execute the registered sale deed on their behalf, and when that power is properly executed, attested and, where required, apostilled or consularised, and then registered or adjudicated in India, the resulting registered deed conveys clean title. The key is that ownership still passes through a registered sale deed, not through the power of attorney itself.

Prefer a specific power of attorney over a general one wherever possible. A specific power limited to the named transaction is far easier to verify and much harder to misuse than a broad general power that grants sweeping authority over the property. The narrower the authority, the smaller the room for the agent to act beyond what the owner actually intended, which protects both the genuine seller and you as the buyer relying on the document.

Run the same title diligence regardless of who signs the deed. Confirm the principal owns the property with clean title, that the power is current and has not been revoked, and that the principal is alive, since a power of attorney generally lapses on the death of the principal. PropNewz has explained verifying ownership through the mother deed and chain of title, which applies whether the owner or an attorney executes the deed.

Be especially wary when a power of attorney is offered as the whole transaction rather than a step toward a deed. A so called GPA sale, where you pay and receive only the power of attorney, does not make you the owner, and the discount that makes it tempting usually reflects a title defect or an attempt to dodge duty. When a seller resists giving a proper registered sale deed, treat the resistance itself as the answer and walk away.

The bottom line is to use a power of attorney only as a route to a genuine registered sale deed, never as a substitute for one. Prefer a specific, registered, current power from a verified owner, run full title diligence regardless of who signs, and walk away from any GPA sale offered in place of a deed. The discount on incomplete ownership is never worth the title risk it carries.

Frequently asked questions

Can I buy property through a power of attorney in Bengaluru?

A power of attorney can legitimately let an agent execute a genuine registered sale deed, for example when an owner is abroad. But buying through a general power of attorney in place of a sale deed does not transfer ownership. The Supreme Court has held GPA transactions do not convey title, so insist on a registered deed.

Why is a GPA sale risky?

A general power of attorney sale does not transfer ownership, so a buyer who pays and receives only a GPA is not the legal owner. Such deals are often used to avoid stamp duty or to mask title defects, and the buyer inherits the defect without owning the property, while resale and financing become very difficult.

When is a power of attorney acceptable in a property deal?

When it is a route to a genuine registered sale deed rather than a substitute for it. If a validly registered, specific and current power of attorney authorises a trusted person to execute the actual sale deed, which is then registered and duty paid, the transaction can be sound, because ownership still passes through a registered deed.

How do I verify a power of attorney transaction?

Confirm the power of attorney is registered, current and specific to the sale, granted by the genuine owner with clean title, and that the principal is alive and has not revoked it. Insist the final transfer is a registered sale deed, and prefer the owner executing the deed directly where possible.

Sources, prior PropNewz coverage of the mother deed and chain of title and a CERSAI search for hidden mortgages.

Last updated 2026-06-18. PropNewz Team.