A GPA sale in Delhi looks like a sale. Money changes hands, keys change hands, and the buyer walks away with a folder: an agreement to sell, a general power of attorney, and often a will. What has not changed is the name on the title. A power of attorney is an authority to act for someone. It is not a transfer of ownership, and no amount of paper wrapped around it will make it one.
Most people who buy this way are not careless. They are buying from a seller who holds the keys and a plausible story, and the discount is real. This page sets out the risk behind that discount and how to check for it before money moves.
What a GPA sale in Delhi actually transfers
A general power of attorney is governed by the Powers of Attorney Act, 1882. The person who signs it, the grantor, authorises someone else to act on their behalf. That person can sign documents, deal with authorities, collect rent, or agree a sale. In every one of those acts, the holder is the grantor’s agent. The owner remains the owner.
So what does the buyer get? Possession, the right to live in the property, and a contractual promise. That is a real thing, and families live on it for years. But it is not a right in the property. The registrar, the revenue record, the lender and the court will all look past the folder to the name on the deed.
The usual package carries three documents, and each does a different job. The agreement to sell records the price and the terms. The power of attorney gives the buyer the ability to deal with the property as though they were the owner. The will is a promise that the property will pass to the buyer when the seller dies. None of the three is a conveyance, and stacking them does not produce one.
Why the practice is so common in Delhi
GPA sales are not a fringe practice. They grew for reasons that made sense at the time, and several still apply.
- Stamp duty and registration are deferred. The buyer pays the price but not the government charges, so the deal looks cheaper on the day it is signed.
- Sellers avoid disclosure. An unregistered transfer does not surface in the same way for capital gains, for a bank, or in a family settlement.
- The chain is already broken. Where the last registered deed is decades old and the intermediate owners are dead, a power of attorney feels like the only way forward.
- The owner is abroad. A seller who cannot travel authorises a relative rather than signing a deed.
- Some land categories are hard to convey. Where a registered sale deed has historically been difficult, the market routes around the difficulty instead of solving it.
- It is faster. No sub-registrar appointment, no stamp paper, no queue.
Each of those reasons explains the practice. None of them protects the person holding the folder.
What the Supreme Court said about GPA sales
In 2011 the Supreme Court dealt with the practice directly in Suraj Lamp and Industries v State of Haryana. The Court held that a sale agreement, a general power of attorney and a will, taken together, do not convey title. Such transactions are not a valid mode of transfer, and courts will not treat them as completed sales.
The ruling was not meant to reopen transactions already completed, so existing holders were not pushed out overnight. But it settled the principle.
After that judgment the position is simple. To own immovable property in Delhi, your name has to appear on a registered deed. Anything short of that leaves you with a claim against a person rather than a right in the property, and a claim is only as good as the person you are claiming against.
The five things that go wrong
These are not hypothetical. They are the ordinary failure modes, and they tend to arrive in sequence rather than alone.
- The grantor dies. A power of attorney ends with the person who gave it. Section 201 of the Indian Contract Act, 1872 makes that termination automatic. The legal heirs inherit the property, are not bound by the document, and are free to sell it or to dispute your possession.
- The owner sells to someone else and registers first. A registered buyer beats an unregistered occupant, every time and without much argument.
- The owner revokes the authority. A power of attorney can be withdrawn unless it is coupled with an interest, and the purchase of a floor is not that.
- The lender refuses. Banks and housing finance companies lend against registered title. Without one, you buy in cash or you do not buy.
- The record stays in the seller’s name. Property tax, water and electricity connections, mutation and the next buyer’s due diligence all run into a name that is not yours.
There is a sixth, quieter problem. A GPA sale is cheap because nobody registered it, which also means nobody checked it: the seller’s own purchase may have been defective, the plot may carry a bank charge, or the floor may not match the sanctioned plan.
The problem arrives at resale
When you sell, your buyer’s lawyer will ask for the chain of registered deeds. The chain will stop at a power of attorney. At that point three things happen at once: the price is renegotiated downward, the buyer’s loan is refused, and the file moves to the bottom of the pile.
Long chains make it worse. A property that has passed through three holders has three grantors, and at least one is usually dead, untraceable, or unwilling to sign now that the money has been spent. Every link has to be repaired before the property can be sold cleanly, and repairing a link means finding a person, not filing a form.
For a buyer, the practical question is not whether a GPA sale is legal. It is whether you can afford to be the person who has to fix the chain, years later, with your own money. The difference between the three instruments is set out in our guide to a sale deed, an agreement to sell and a GPA in Delhi.
What a builder floor GPA sale does to the land share
A builder floor is not only the floor. It is the floor plus a proportionate share of the plot underneath, and that share is what makes a future rebuild possible. It is also the part a GPA sale almost never touches, because a share in land can only move by a registered instrument.
The result is a buyer who holds the walls and a seller who still holds the ground. That mismatch surfaces at the worst possible moments: when the building is rebuilt, when the plot is sold, when a lender values the floor, or when the residents’ association needs a signature from the recorded owner. Our explainer on builder floor land share sets out how the share is calculated and where it is recorded.
How to tell a GPA sale from a real sale
Before token money leaves your account, ask for five things and read them yourself.
- The seller’s own registered sale deed, in the seller’s name. Not a photocopy of a power of attorney.
- The latest property tax receipt, and the UPIC or CA number the property is billed against.
- The mutation entry that shows the seller in the revenue record.
- A search of the sub-registrar’s records for the property, done by your lawyer and shared with you in writing.
- Photo identity of the person signing, matched to the name on the deed, and a current way to reach them.
If the answer to any of these is that the lawyer already has it, then the lawyer should produce it before the token, not after. The legal documents to verify before buying a builder floor covers the rest of the file.
If you have already paid on a GPA basis
The only cure is a registered deed. That means finding the person whose name is on the record, or their legal heirs, and having them execute a sale deed in your favour with the stamp duty and registration paid at that point.
If the owner is alive and cooperative, this is a paperwork problem with a price attached. If the owner has died, it becomes an inheritance problem: the heirs must first establish their own right through probate or a succession certificate, and only then can they convey the property. If the owner cannot be found at all, you have a dispute rather than a property.
Get a property lawyer to review the chain before you pay anything further. A written opinion costs far less than the litigation that follows a badly built chain. The Delhi Revenue Department publishes what is registrable in Delhi and the fee for each instrument, including a power of attorney, which is a useful starting point for that conversation.
When a power of attorney is legitimate
A power of attorney is a useful and ordinary instrument. It lets a lawyer appear before the sub-registrar. It lets a family member manage a rented flat. It lets an owner living overseas appoint someone to complete a sale. In each of those cases the eventual transfer is still made by a registered deed signed on the owner’s behalf. The power of attorney is the authority; the deed is the transfer.
Hold that distinction through every conversation with a seller. A power of attorney can be the hand that signs. It cannot be the thing that gives.
What to do instead
Buy on a registered sale deed and pay the stamp duty and registration at the time of purchase. It is the expensive option on the day and the cheap option over ten years. Our guides to the stamp duty and registration charges in Delhi for 2026 and to the registry process in Delhi set out what the transaction involves, step by step.
If a price only works because the transfer is not being registered, that is not a discount. It is the cost of the problem you are about to inherit.
The short version
- A GPA transfers authority, not ownership. Possession is not title.
- The Supreme Court settled the principle in 2011: an agreement to sell, a GPA and a will together do not convey title.
- The risk lands when the grantor dies, revokes the authority, sells twice, or when you try to sell or borrow against the property.
- On a builder floor, the land share is the part most often left behind.
- The fix is always the same: a registered sale deed, signed by the person on the record or their lawful heirs.
