• NRI Property Purchase, Assignment Agreement and POA

I am purchasing a property from an NRI couple based out of the UK and below are the details related to the transaction that is happening

- There are three parties in this transaction
 B - Builder
 S - Seller
 M - Myself

- The property is NOT yet registered in the husband and wife's name
- They have made an "Agreement to Sell" with the builder
- They will not be coming to India to do the "Assignment Agreement" (or "Transfer Agreement") in my name
- Assignment Agreement will be a triparty agreement between Builder (B), Seller (S) and Myself (M)

SCENARIO 1

- The process that will be followed is - 
 (i). I will sign the document (i.e Assignment Agreement) 
 (ii). The document will be couriered to the UK for the Seller's (S) signature,
 (iii). Sellers (S) will again courier back the signed document to the builder (B), who will then sign the 
 document
 (iv). Finally, builder (B) will get the FRANKING done on the document
 (v). Post the assignment agreement with the seller (S), the builder (B) will finally do the sale deed 
 with me (M) which will be registered in the Sub Registrar office

Ques 1 - Is this process legally valid? If YES or NO, why? Please explain

Ques 2 - Is it not necessary for the assignment agreement to be registered in the sub-registrar office? If not, why?

Ques 3 - My Doubt - If someone is signing a property document in a foreign country (UK) and that document is not registered in India (remember only franking is being done and not registration), then how come the document is valid?

(Note: As per my understanding, franking means stamping the assignment agreement which confirms that I have paid the stamp duty charges)

SCENARIO 2

In case the sellers give the POA (Power of Attorney) to the wife's blood relative in India, he/she has the authority to sign the assignment agreement (please correct if my understanding is wrong)

Ques 4 - What is valid for this scenario - only FRANKING of the assignment agreement is fine or does the assignment agreement need to be registered in front of the sub-registrar?
Please share any other info that might be relevant for this scenario

Ques 5 - What problems (if any) can I face in the future in both the scenarios, if I want to resell the property to somebody?
Asked 1 year ago in Property Law
Religion: Other

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9 Answers

The sellers cannot sign the agreement which has been executed in a nonjudicial stamp paper sitting in a foreign country because Indian stamp paper is not valid beyond the territories of India. 

If the builder is getting the tripartite agreement franked subsequently then to what extent  is getting the franking of stamps. 

This is a tripartite agreement hence it is not mandatory to get the document executed by a registered deed. 

The sellers can authorise a common person for both as their power agent by executing a power of attorney deed in that country duly notarized by a local notary public or attested by an official of the Indian embassy. 

If the sellers have obtained any home loan then they may have to get NOC from their banker.

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

Apart from all the above also execute a indemnity bond for your safety 

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

1) document should be franked before it is signed by parties 

 

2) seller should sign the agreement before the Indian consulate 

 

3) attestation before Indian consulate proves that seller has signed the agreement 

 

4) tripartite agreement has to be registered 

 

5) wife can give POA to her blood relatives but her husband cannot do so as POA would attract higher stamp duty 

Ajay Sethi
Advocate, Mumbai
99776 Answers
8145 Consultations

1. On the basis of assignment deed the builder can not sell the property alone. In other words like the assignment deed , the final deed of sale will have to be signed by all of you. Since the sellers are absent they will have to give POA to someone to do this job.

2. That is why scenario 2 is the option to be adopted. 

Devajyoti Barman
Advocate, Kolkata
23653 Answers
537 Consultations

Seller can execute POA for registration purposes 

 

in alternative ask seller to come down to India for registration 

 

special power of attorney if executed in favour of non blood relative attracts higher stamp duty ie around 6 per cent 

 

stamp duty is state subject and varies from state to state 

 

if agreement is not attested before Indian consulate seller can claim he has not signed agreement that his signature was forged etc 

Ajay Sethi
Advocate, Mumbai
99776 Answers
8145 Consultations

The tripartite agreement franked subsequently in India after it has been signed on a plain paper at a foreign country is considered as valid.

As a matter of fact the sellers are not having clear and marketable title to the property by  a registered document as of now hence they cannot execute a registered sale deed in favor of the prospective buyers. 

However since they have entered into a registered sale agreement with the builder, it needs to be cancelled only after which the encumbrance created on the proeprty will be removed.

If the sale agreement was executed by an unregistered deed, then the unregistered tripartite agreement between the builder, seller and the buyer by observing the other formalities should be sufficient , however you are advised to obtain a proper legal opinion from a lawyer before venturing into the purchase for your future safety

T Kalaiselvan
Advocate, Vellore
89978 Answers
2492 Consultations

1, Ask the seller to engage a POA to act for and on his behalf.

 

2. For executing a POA. he shall have to get his signature on the POA approved/vetted by the appropriate officer of the Indian Consulate and send it to the POA holder by courier.

 

3. The POA holder thereafter shall have to take the said POA to the local stamp commissioner and get a Rs.50/- stamp affixed on it to make the POA complete in all respect.

 

4. Thereafter the POA holder can sign the tripartite Assignment Agreement and finally register the sale deed of the property in your name.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

1. Signature on any document can be challenged on a later date unless it is registered or at least notarised. 

 

2. In case of the signature of the person staying in some other Country (on POA), the signature shall have to be vetted by the appropriate officer of the Indian Consulate of the said Country.

Krishna Kishore Ganguly
Advocate, Kolkata
27703 Answers
726 Consultations

It’s valid if he is physically present 

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

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