Gujarat government brings new rules to stop NRG property fraud

January 11, 2023
Gujarat government brings new rules to stop NRG property fraud

AHMEDABAD: To check fraudulent sales of properties belonging to NRGs, the state government has brought in checks to prevent the misuse of the ‘power of attorney’ documents.

The revenue department issued two critical circulars this month defining the new procedures. From now on, an NRG or individual residing outside the state, who delegates authority to their representatives to execute the sale of a property, will have to send an additional document declaring s/he was alive at the time of the sale. The representative could be a blood relative or a third party. The rules state that the notarized declaration should be sent in a sealed envelope and opened only in front of the sub-registrar.

The revenue department notification elaborates that the NRI must file the declaration from the application date for execution of the sale deed. “The declaration must be registered with the sub-registrar’s office,” says a senior revenue official.

There have been many cases in Ahmedabad and other cities in Gujarat where buyers bought properties belonging to NRIs through people armed with power of attorney, only to find later others claiming their stakes in the property.

The superintendent of stamps, Jenu Devan, issued two circulars on January 9 and January 10 in this regard. The January 9 circular invoked the Gujarat Registration (Amendment) Regulation 2023. It replaced the relevant rule, filing of “declaration by a power of attorney stating that the principal (owner of the property) is alive”, with “declaration by the principal stating that s/he is alive”.

“This means that instead of the power of attorney holder filing a declaration that the NRI owner is alive, the owner has to file a separate declaration and post it in a sealed cover to the sub-registrar,” adds the revenue official. The declaration by the NRI seller should consist of the date, preferably a day after the filing of the sale deed.

“The NRI seller issuing a power of attorney has to state in the separate declaration on a Rs 50 stamp paper that s/he is alive; that they have neither withdrawn nor cancelled a power of attorney issued; and that no litigation or dispute is pending in any court or tribunal in India regarding the property in question.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 if the transaction is found to be fraudulent,’ adds the revenue official.

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