What are the risks of buying property through a General Power of Attorney (GPA)?

Question

I am being offered a property at a lower price through a GPA transaction. What risks should I be aware of before agreeing? I have been reading conflicting things online and I would like to understand what Indian law actually says about this, which Act and Section applies, what the realistic timelines and costs are, and what I should be doing right now to protect my position. If the matter can be resolved without litigation I would prefer that route, but I want to know what my rights are before I agree to anything or sign any document.

MyVakeel Legal Desk · Accepted Answer

What are the risks of buying property through a General Power of Attorney (GPA)? is governed in India primarily by Registration Act 1908, Section 17, Transfer of Property Act 1882, Section 54 and Indian Stamp Act 1899, Section 3. The short answer is set out below, followed by the practical steps most people in this situation need to take. Read it alongside the specific provisions named, because the exact relief available to you turns on the facts you can prove on paper.

Since a GPA does not transfer ownership under Section 54, the buyer only receives a bundle of authorisations to manage or eventually sell the property, not title, leaving true ownership with the original owner.

A GPA can be revoked by the principal at any time before it is acted upon, or automatically stands revoked on the principal's death, which can leave the buyer with no enforceable right if this happens before a registered sale deed is executed.

GPA transactions are frequently used to evade stamp duty and capital gains tax, since no registered sale deed is executed and consideration under Section 3 of the Stamp Act is avoided, exposing both parties to tax and penalty risk.

Banks generally refuse home loans against GPA-held property, and resale becomes difficult since subsequent buyers face the same lack of registered title.

Courts across India, following Suraj Lamp, treat such property as not mutated or recognised as owned by the GPA holder for revenue records, creating long-term litigation risk.

What to do next: 1) Avoid completing the purchase through GPA alone; insist on a registered sale deed; 2) Verify the GPA's registration, validity and whether it has been revoked; 3) Check whether the original title holder is alive and competent to convey title; 4) Consult a property lawyer to convert any existing GPA arrangement into a proper registered conveyance.

If the other side has already issued a notice, filed a case or set a deadline, treat the matter as time-sensitive — most remedies under Registration Act 1908, Section 17 carry limitation periods, and a delay you cannot explain weakens an otherwise strong case. You can post the details on the MyVakeel forum for a practising advocate to review, or book a paid consultation with a Bar Council verified lawyer in this practice area.