Buying a home often involves situations where you cannot be physically present to sign documents or complete formalities. That is where a Power of Attorney (PoA) helps. Yet many borrowers and sellers get confused between a general power of attorney and a special power of attorney. The confusion can slow down your loan, trigger queries from the bank, or even risk title disputes later.
This guide clears the air in a clear, step-by-step way. You will learn the basics of PoA, how lenders actually use it in India, when to pick a general vs special PoA, how to draft and register it, and the safeguards you must follow. Wherever helpful, you will see simple examples and practical checklists.
Table of Contents
A Power of Attorney is a legal instrument where one person (the “principal” or “grantor”) authorizes another person (the “attorney-in-fact” or “agent”) to act on their behalf. In property and home loan contexts, the PoA lets the agent sign applications, appear before banks, execute agreements, receive possession, register deeds, or even sell the property, depending on what the PoA permits.
Real estate and loans demand precise paperwork. If a borrower, co-applicant, NRI, elderly parent, or seller cannot attend, the deal stalls. A valid PoA solves that. Most banks accept PoAs that are correctly drafted, stamped, and registered/notarized as required in the relevant state. However, they prefer narrow, transaction-specific powers to reduce risk.
At a high level, there are two common categories used in property and loan transactions. These two are sometimes confused as general and special power of attorney being interchangeable. They are not. The scope and risk profile are very different.
You might also hear terms like “types of power of attorney” in broader legal guides: durable, medical, financial, limited, etc. In Indian property practice, the general power of attorney for property and the special power of attorney dominate.
General Power of Attorney (GPA)
A general power of attorney gives the agent a wide authority to act for the principal in a broad class of matters. In property, it may authorize the agent to manage, lease, collect rent, sign loan papers, or even execute conveyances if expressly permitted.
What lenders think about GPA
Banks prioritise clarity and risk control. Many lenders allow a GPA for routine steps like submitting applications or collecting documents. But for final, value-shifting acts like executing sale deeds or creating mortgages, lenders usually prefer precise wording or even an SPA. Some lenders explicitly say they will only accept a transaction-specific SPA to avoid later disputes.
A special power of attorney is narrow and focused. It authorizes the agent to perform specific acts for a defined property and a defined transaction, often for a limited time window.
This is why banks frequently ask for an SPA for loan disbursement paperwork, registration of a specific flat, or collection of possession for a named unit in a named project.
Lenders like SPAs because they are self-contained. The special power of attorney format clarifies the property details, the exact actions allowed, and often an expiry. It reduces the risk of abuse and speeds up internal approvals.
| Aspect | General Power of Attorney (GPA) | Special Power of Attorney (SPA) |
| Scope | Broad and ongoing across many acts | Narrow and specific to a transaction |
| Bank comfort | Moderate; banks may limit their use for value-shifting acts | High banks often prefer SPA for registration, disbursement, and possession |
| Drafting effort | One time, but must be very careful | Focused but may need a new SPA for each distinct transaction |
| Risk profile | Higher if the wording is too wide | Lower due to specificity |
| Ideal for | NRIs, long-term management, repeated interactions | One flat, one bank, one registration or disbursement event |
| Revocation impact | Complex if many tasks are midway | Simple; ends with the transaction |
| Evidence trail | Can be vague if not worded well | Clear paper trail for a single deal |
Even with PoA, lenders often ask for the principal’s KYC, photographs, and sometimes a short video verification. Be ready with PAN, Aadhaar (or passport for NRIs), address proof, and two photographs.
Lender’s check:
If your PoA says “manage all properties” but does not mention execution of a sale deed or mortgage creation, the bank can refuse it for that act. That is why general power of attorney and special power of attorney must be worded with the bank’s checklist in mind.
Stamp duty and registration rules vary by state and by whether the property is in the same state as the PoA execution. When executed overseas, an apostille/consular attestation and later adjudication in India may be needed. Check locally before you draft.
Drafting a Careful GPA (When You Really Need It)
A general power of attorney can be broad, but should still avoid ambiguous phrases like “all acts whatsoever.” Instead, use a controlled list: manage utilities, liaise with builders, submit loan applications, collect documents, represent before the registrar for specified purposes, etc. If you want to allow sale or mortgage creation, state it clearly and tie it to identified property or properties.
When a GPA is clear about what it does and does not permit, lenders process faster. A well-drafted GPA plus a tight SPA for the final steps is often the cleanest path.
PoAs attract stamp duty. Rates vary by state and by whether consideration is involved. Confirm locally. Under-stamping can make the PoA inadmissible until the duty and penalty are paid.
A general power of attorney (GPA) lets your agent handle a broad set of tasks on your behalf. In home loans, that can include interacting with the builder, submitting and collecting documents from the bank, managing possession formalities, and routine liaison. It’s convenient for ongoing, multi-step processes, especially for NRIs or frequent travelers. Because it’s broad, draft it with guardrails (for example, exclude sale/mortgage or require separate approval).
A special power of attorney (SPA) authorizes your agent for a single, clearly defined transaction. It identifies the exact property (project, tower, flat), the lender, and the permitted actions (sign loan set, execute and register the sale deed, pay stamp/registration, collect possession). Lenders prefer SPAs because they’re precise and time-bound, which speeds approvals and reduces risk.
Only if the GPA expressly authorizes execution of a sale deed for that specific property and it meets stamping/registration requirements in your state. Even then, many banks and registrars are cautious with broad GPAs. The cleaner path is usually an SPA that names the buyer, property, consideration, and sub-registrar’s office. Always verify local rules before relying on a GPA for sale.
For one flat and a defined set of actions, an SPA is typically safer and more bank-friendly because powers are confined and easy to verify. A GPA is better for ongoing liaison across many steps but should be carefully bound. In practice, many borrowers use a GPA for routine tasks and a transaction-specific SPA for sale deed, mortgage creation, and registration.
Yes. With a GPA, overbroad wording can allow actions you didn’t intend, leading to disputes or revocation hassles. With an SPA, the main risk is logistical—needing a new SPA if scope changes (e.g., lender switch, date change). For both, ensure correct stamping/registration, complete witness details, and (if executed abroad) embassy/consular attestation and Indian adjudication. When in doubt, get a short local legal review before execution.
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