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 would rather settle this without going to court if the law allows it, but I need to know my rights before I sign anything. Please tell me what to do first and what document to keep.

MyVakeel Legal Desk · Accepted Answer

Under Indian law, Registration Act 1908, Section 17 is the starting point for this property law question. What follows is the position in substance, together with the steps that usually make the difference in practice.

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through GPA alone; insist on a registered sale deed; 2) Verify the GPA's registration, validity and whether it has been revoked; 3) Check whether the original title holder is alive and competent to convey title; 4) Consult a property lawyer to convert any existing GPA arrangement into a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 you are unsure whether your facts fall inside Registration Act 1908, Section 17, that is worth checking with an advocate before you commit to a route, because switching later costs time. 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 property law.