• Registry of shop after death of seller

My cousin brother agreed to sell his shop to me in April 2020 at a consideration of Rs 31.5 Lakh. Written agreement was not made. Before registry could take place he expired in May 2020.
My bhabhi says to owner the deal. She has one married daughter in India and two sons in USA. Sons are not likely to come in next one or two years. But all of them are willing to finalise the deal.
How should I proceed to get the registry done in my name so that I can take possession of the shop?
Asked 5 years ago in Property Law
Religion: Hindu

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20 Answers

Sons can execute POA in favour of mother to sell the shop 

 

2) POA should be attested before Indian consulate 

 

3) mother and daughter can then execute registered sale deed in your favour 

Ajay Sethi
Advocate, Mumbai
99784 Answers
8145 Consultations

Under no circumstances should you pay entire sale consideration now 

 

2) even if you take physical possession of shop if later sons , daughter refuse to execute registered sale deed in your favour you would have long legal battle ahead 

Ajay Sethi
Advocate, Mumbai
99784 Answers
8145 Consultations

1. Since there was no agreement to sale between you and your cousin you have no remedy against the heirs of your deceased cousin.

2. The shop of your cousin has devolved on his Class 1 heirs if he died intestate. His Class 1 heirs are his mother, widow and all children. Hence, there can be an agreement of sale between the Class 1 heirs of your decease cousin and you.

3. Your bhabhi is not the only Class 1 heir.

 

Ashish Davessar
Advocate, Jaipur
30840 Answers
981 Consultations

1. All the Class 1 heirs do not have to personally go to the sub-registrar's office to execute the sale deed.

2. The Class 1 heirs may execute a GPA in favour of one of them to authorise him/her to execute the sale deed for and on their behalf.

Ashish Davessar
Advocate, Jaipur
30840 Answers
981 Consultations

After the death of your brother your sister in lies only shareholder in the property if there is no will so all the legal hairs are now the title holder of the property and property can be transferred in their names if they can provide no objection certificate in the name of your sister in law to get into the agreement then she can do it and for this purpose those who are not living in India they have to send their power of attorney authenticated by the Indian consulate in the country they are living in in this regard so that their mother can do the agreement on their behalf after that you can go for the registration and transfer the property accordingly

Vimlesh Prasad Mishra
Advocate, Lucknow
6851 Answers
23 Consultations

Hi

That property will first be registered in the name of your bhabhi....than she can sell it to you, and you can pay the amount and take possession only on family terms and only NOC can be required from the daughter ans sons of your cousin brother 

Rahul Jatain
Advocate, Rohtak
5365 Answers
4 Consultations

All have 1/4th share each. All have to act as seller or give POA to your bhabhi to execute sale deed.

Ownership transfer through register sale deed and sale deed should register within 4 months of sale.

Agreement to sale is fine but what is they change they mind later, useless complications may create.

They can give POA to bhabhi than she can execute sale deed alone on their behalf.

Yogendra Singh Rajawat
Advocate, Jaipur
23081 Answers
31 Consultations

You are correct. Get sale agreement in your name and enter into possession. The power of attorney's of sons may be taken in the name of their mother and thus get registered sale deed within few days. But be cautious about payment record and following.

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Imp points on Power of Attorney by NRI

A property transaction through Power of Attorney executed by NRI calls for extra checks/scrutiny. A sale deed can be declared NULL and VOID because of a small mistake or error in the execution of Power of Attorney by NRI. Sometimes these errors/mistakes are intentional and most of the times unintentional. In recent past, i came across multiple cases wherein a property transaction was challenged based on error/mistake in the execution of Power of Attorney (POA) by NRI. In many cases, the status of NRI is being concealed by his lawyer/CA in POA to avoid TDS. An NRI executing POA in India cannot declare his/her status as Resident Indian. As i keep highlighting that a buyer or seller in India should mention the status of another party in sale deed to avoid any future tax disputes. A case of the false declaration in sale deed may not put the onus of concealment of facts on the resident Indian in the property transaction.

My general observation is that Resident Indian’s are not aware of do’s and don’t of Power of Attorney executed by NRI. Even professional help does not help in most of the cases due to lack of knowledge. A Power of Attorney is issued by NRI if he/she cannot be physically present in India for the execution of property transaction. As a buyer or seller, you should insist on the physical presence of NRI Buyer/Seller in India for sale deed. It will avoid a lot of future hassles. The risk is HIGH if the buyer is Resident Indian, and Seller is NRI, who is represented by Power of Attorney holder. In this post, we will discuss this particular scenario for simplicity purpose. Though it is equally important if a seller is Resident Indian, and Power of Attorney holder represents the NRI Buyer. Reason being, it is important to trace money trail from NRI buyer i.e. whether money is being properly channeled for the property transaction. Let’s check important points or Do’s and Dont’s by Resident Indian Buyer if the transaction is through Power of Attorney by NRI.

Reason for Execution of Power of Attorney

 A resident Indian buyer should AVOID property transaction through Power of Attorney holder of an NRI. The best case scenario is the presence of an NRI seller in India for execution of sale deed. Sometimes the circumstances do not permit so a buyer you should check the reason for the execution of Power of Attorney. The reason should be reasonable and logical. If the buyer is convinced with the reasoning, then he should insist that NRI Seller should include this particular reason, in Power of Attorney. In short, the purpose/reason for the execution of a power of attorney should be clearly mentioned in the Power of Attorney.

Process to Execute Power of Attorney

The most critical step is to check whether the Power of Attorney is executed as per the laid down process. It’s a 2 step process i.e. attestation of POA at Indian Consulate/Embassy and the registration of same in India. Attestation of POA is required even if the seller is not an NRI i.e. not completed 180 days outside India. On the other hand, if NRI executes POA on Indian Soil then attestation is not required. In short, a POA executed on foreign soil irrespective of the status of a seller require attestation at Indian Consulate/Embassy. The registration process in India follows it. Let me highlight steps/checks for a buyer.

Step1: NRI seller creates two copies of Power of Attorney with detailed terms and conditions. As a buyer, you should go through each and every clause carefully to understand the content.

Step 2: Check whether the POA is signed by two witnesses present in the country of residence of a seller.

Step 3: Check whether the witnesses were physically present in Indian Consulate/Embassy at the time of signature or not. If they were not physically present, then their signatures should be attested by the Local Notary.

Step 4: The POA should be attested by the Indian Consulate/Embassy.

Step 5: The Attested POA should be registered in the India by the resident Indian i.e. POA holder. The registration process in India should be completed within three months from the date of execution of POA. The POA can be registered in SDM (Sub Divisional Magistrate) office or Sub-Registrar Office. The rule may vary from state to state.

The relation between the NRI and POA holder should be mentioned in the POA. Preferably the details of ID proof of a POA holder issued by Indian Govt should be specified in the POA. The buyer retains the original copy of Power of Attorney for future reference.

Also, note that in some cases POA holder simply notarize the POA in India instead of registering it in SDM or Sub-registrar office. A “Notarized POA” is not the same as “Registered POA”. A notarized POA is legally not valid in India. A POA executed by NRI on foreign soil should be registered in SDM or Sub-Registrar office.

Payment to NRI Seller

In a recent case, i observed that buyer was cheated by Power of Attorney holder of an NRI Seller. It’s a misconception that payment towards property transaction should be transferred to POA holder. Please understand that Power of Attorney holder is only a representative of an NRI seller. The resident Indian buyer should make payment only to the NRI seller in his her NRE/NRO account. An NRI seller can authorize POA holder to accept payment on his behalf but cannot authorize payment to POA holder. Even if NRI seller authorizes POA holder to receive direct payment, the buyer should avoid such property transactions. It may land a buyer in tax trouble.

In the case of multiple NRI sellers, the payment should be transferred in the proportion of ownership in the property to each seller. In another case, one of my clients was cheated by NRI Seller. NRI couple jointly held the property. There was a dispute between husband and wife & my client was not aware of same. NRI husband insisted on transferring 100% consideration value in his account. After the deal had been done, the wife of a seller filed a case of cheating and fraud by his husband. Therefore, all the payment should be made in the proportion of ownership in the property. Each of the sellers should execute separate Power of Attorney.

TDS u/s 195

In one of the case, my client received notice for not deducting TDS u/s 195. In my post, How to deduct TDS on NRI u/s 195? i explained this in detail. In this case, the transaction was completed by POA holder. The POA holder told my client that as she (POA holder)  is resident Indian therefore relevant TDS will be 1% u/s 194IA. Again i would like to clarify that POA holder is only a representative of NRI Seller. The TDS will be deducted u/s 195 in the case of NRI seller. The only exception is if NRI seller produces NIL or Lower Tax deduction certificate that i explained in my post How NRI’s can lower TDS on property sale?.

Indemnity Clause

Lastly, each property transaction is unique with multiple permutations and combinations. Therefore, a buyer can safeguard his/her financial interests by including a blanket indemnity clause in the sale deed. To avoid being caught on the wrong side also ensure that sale deed clauses are in concurrence with the terms and conditions of the POA. It will eliminate any possibility of legal/tax hassles.

Concluding Remarks: If you are buying/selling property from NRI then it is advisable to seek professional help to avoid any unpleasant surprises in future. The rules and regulations governing such transactions are bit complicated, especially on the taxation front. Always remember that Indian Law or Tax Authorities will not have any jurisdiction on the NRI residing abroad. On the other hand, a buyer who is resident Indian cannot escape the Indian Law/Tax Authorities. Moreover, the 100% onus of legal/tax compliance rests with the Resident Indian buyer.

http://indiatoday.intoday.in/story/property-sale-through-gpa-not-valid/1/154711.html

No property sale on power of attorney: Supreme Court

 

The court rules that transfer through general power of attorney cannot give ownesrship title to the buyer.

Property sales through the common practice of general power of attorney (GPA) will not give ownership title to the buyer.

 

In a landmark judgment that is expected to send a large number of property owners into a tizzy, the Supreme Court held that the GPA method of immovable property sales is not a valid form of transfer of property.

 

A three-judge bench presided over by Justice R. V. Raveendran said that property can be lawfully transferred only through registered sale deeds.

 

"A power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property," the bench said, after interpreting various provisions of the law concerning property sales. However, the bench said the judgment will not affect "genuine transactions" under the GPA.

 

The judgment delivered on Wednesday would have an impact on both freehold and leasehold properties and affect the mode of transfer of property in Delhi and the National Capital Region (NCR) where GPA sales are very common. Even though it can cause some hardship to those who have already purchased property through the GPA, the order will help curb evasion of duties, flow of black money into real estate and also save people from being cheated by unscrupulous owners selling the same property to several people.

 

 

Kishan Dutt Kalaskar
Advocate, Bangalore
6230 Answers
499 Consultations

You need to execute a sale deed with her. The same should be attested in hi commission of India in that foreign country. If the same is her self acquired property or and she is the sole owner of the property through will. If not and the property has legal her then they should give noc or relinquish their share in the same in her name before your sale deed. 

Prashant Nayak
Advocate, Mumbai
34520 Answers
249 Consultations

Sir

Kindly tell the two sons to execute a Power of attorney in the name of their mother( your Bhabhi) by getting it attested before the Indian embassy in the US, thereafter your bhabhi can act on their behalf.

The Daughter can also giver a power of attorney to her mother ( your bhabhi ) and your bhabhi can alone act on everyones behalf.

Your bhabhi will be required to appear during the time of  registry. 

Archit Vasudeva
Advocate, New Delhi
260 Answers
2 Consultations

Your nephews and nieces who are not present in India to execute a joint registered sale deed can execute a POA from the country they reside in favor of your sister in law,  who can execute the proposed registered sale deed in your favor on their behalf also on the basis of this POA deed in her favor. 

T Kalaiselvan
Advocate, Vellore
89986 Answers
2493 Consultations

You need strain too much on it.

As per law the proposed sale agreement between you and your sister in law is not legally valid because she alone is not the owner of the entire property. 

You can suggest your nephews to execute a POA deed in favor of your sister in law authorizing her to execute the registered sale deed on their behalf too.

 

Once this is done you can legally possess and enjoy the property as an absolute owner with clear and marketable title. 

T Kalaiselvan
Advocate, Vellore
89986 Answers
2493 Consultations

Hello,

1. Your sister in law can get a power of Attorney from the sons and the daughter and stand in for all of them to sign the Sale Agreement at the registry. 

2. For sale or such transfer the PoA ha to be a registered one and as the sons are in the USA this won't become possible. They can get Embassy attested affidavits relinquishing their share in the property in favour of their mother and send to India.

3. The daughter can either sign as a consenting party in the sale or get a registered PoA issued in favour of her mother.

4. The registrar concerned nedds to be convinced that there is no foul play and all heirs are in agreement for the sale.

S J Mathew
Advocate, Mumbai
3619 Answers
175 Consultations

As your brother has died all his heirs have to sign on the registration deed tgen only you can get the property registered.

Rahul Mishra
Advocate, Lucknow
14114 Answers
65 Consultations

Yes all the shareholders have to be present for registration at the registrar office. 


Don't be hasty. Wait for all to come. In the meanwhile the people abroad may send you a power of attorney and on that basis too the deal may be finalized.

Rahul Mishra
Advocate, Lucknow
14114 Answers
65 Consultations

your cousin brother son's can constitute power to any person of your close relative, that power document should be endorsed by Notary or Attorney of that country and the same has to be registered in the SRO where the property is situated through SRO proceedings. 

 

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

1)The property of an intestate shall be divided among the heirs in class 1 i.e your brother Wife sons daughter

2) without consent of all legal heir class 1 you can not execute a sale deed or agreement. 

Mohammed Mujeeb
Advocate, Hyderabad
19325 Answers
32 Consultations

1. To safeguard your financial interests, all the residual legal heirs of deceased must mutually & jointly sign the Registered Sale Deed before the Registrar, otherwise during any kind of dispute, you will be trapped into a long legal battle.

2. Persons who are not in India, can give a Power of Attorney (POA) to any person in India, who then can sign on behalf of the Sons. This will legalize everything.

Hemant Agarwal
Advocate, Mumbai
5612 Answers
25 Consultations

Dear Querist

First of all, execute a Power of Attorney by the Children of your cousin brother in favor of your Sister-In-Law(Bhabhi), both the sons who are residing in Abroad may execute a POA in her favor from their Country where they are residing, attested by Notary Public of that Country and the Daughter who lives in India also execute a POA in her favor and based on that Power of Attorney, you Sister-in-Law(bhabhi) shall be entitled to execute the sale Deed in your favor without any legal complication. personal presence of you, your bhabhi, and the witnesses shall be required for the execution of sale Deed.

 

Feel Free to Call

Nadeem Qureshi
Advocate, New Delhi
6348 Answers
302 Consultations

1. First your bhabhi should obtain legal heir certificate of your cousin.

2. Then Your sister in law( Bhabhi)  should get power of attorney from her children of they cannot come to India for registration of shop on your name. 

3. Presence of all legal heirs or their power of attorney will be mandatory for execution of sales deed in your favour as they all begam joint owner of property of their father after his death. 

Mohit Kapoor
Advocate, Rohtak
10686 Answers
7 Consultations

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