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What to do when power of attorney is only to buy and not sell property


05-Oct-2023 (In Property Law)
i am planning to buy a property in Vasai east and current owner stay in Canada, he initially gave purchase power to his sister while buying home however that power is not having sell power and thus they have sent revised power of attorney to seller. please advise which are point that i need to take care while buying this home/
Answers (1)

Answer #1
992 votes
the Honble Supreme Court vide its judgment rendered in case titled as Suraj Lamp and Pvt. Ltd. v/s State of Haryana and another.
Honble Apex Court dealt with is whether immovable property can be legally transferred or conveyed through a General Power of Attorney, Agreement to Sell and a Will? Before we embark upon this question, it is very essential to know as to why such kind of indirect sales came into existence. The most dominant reasons for such kind of Indirect Sales were to avoid prohibitions/ conditions regarding certain transfers (as some deeds of conveyance contain the clauses that the property can only be sold after 15 years from the date of construction of some building on the plot/property), to avoid payment of stamp duty and registration charges on deeds of conveyance, to avoid payment of capital gains on transfers, to invest black money etc. The seller of the immovable property in these indirect sales after receiving the agreed consideration, deliver the possession of the said property and executes some or all of the following documents:

(1) An agreement of sale (containing the terms which would be similar to terms of sale) by the seller in favor of the purchaser and undertaking to execute any document as and when required in future.
(2) An agreement of sale agreeing to sell the property with the separate affidavit confirming receipt of full price and delivery of possession and undertaking to execute sale deed whenever required.
(3) An Irrevocable General Power of Attorney in favor of the purchaser or his nominee.
(4) A Special Power of Attorney either to sell or to manage the property.
(5) A Will bequeathing the property to the purchaser (as a safeguard against the consequences of death of the vendor before transfer is effected).
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