Revenue Department Amends Rule To Tackle NRG Property Sale

| Updated: January 11, 2023 12:45 pm

Many NRIs prefer to sell their property through power of attorney (PoA). This involves a third party (blood relative or otherwise) assigned to undertake the property registration on their behalf. However, a PoA is not an instrument of transfer with regards to any right or title in an immovable property. It is only the creation of any agency whereby a person authorises another person to carry out “specified acts on his/her behalf.”

However, keeping in mind the rise in cases of fraudulent sales of NRG properties being sold by PoA, the state government has now issued two critical circulars defining new procedures. From now on, any NRG property sale involving a delegate authority, will also require additional documents to declare that the NRG owner “was alive at the time of the sale.” 

The rule states that the notarised declaration should be sent in a sealed envelope and opened only in front of the sub-registrar. Additionally, the revenue department elaborates that the NRI must file the declaration on the application date for execution of the sale deed and registered with the sub-registrar’s office, explained a senior revenue official.  

The new annexe is meant to tackle the rising incidence of property sale through PoAs, only to later find others claiming a stake in the property. The superintendent of stamps, Jenu Devan, issued two circulars, dated January 9 and January 10. The first notice is now the Gujarat Registration (Amendment) Regulation2023 replacing the clause “declaration by PoA stating that the principal (owner of the property) is alive” with  “declaration by the principal stating that he/she is alive.”

The declaration by the NRI seller should have the date, preferably a day after filing of the sale deed. 

The NRI seller issuing the PoA has to state in a separate declaration on a Rs 50 stamp paper that he/she is alive; that they have neither cancelled not withdrawn the PoA issued; and that no litigation is pending in any court or tribunal in India regarding the property in question. The NRI seller also has to certify that it will be their responsibility should any fraud be associated with the transaction. 

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