In the current situation, owning a home is a big achievement. Many people urgently purchase housing property without property documents and clarity. It can usually lead to fake sale deed fraud, and it can cause both financial loss and mental stress. But don’t worry—you can avoid these hurdles by understanding real-estate scams and preventing them from happening again.
In this Brick & Bolt blog, you will learn about property scams, their red flags, and the immediate actions that you can take after falling for a fraudster’s pit.
Understanding Common Real Estate Scams in India
Nowadays, real estate scams are increasing, and you cannot easily identify them. You can consider the following aspects as real estate frauds in India:
Fake Property Listings: Scammers create fake property advertisements to lure people with attractive prices. They trick people into making early payments for properties that don’t exist.
Impersonation of Owners: Fraudsters pretend to be real property owners or agents. They use forged documents to sell properties they don’t actually own, tricking buyers into paying for them.
Land Grabbing: Land grabbing constitutes a significant problem wherein criminals illegally occupy land and manipulate ownership records using counterfeit documents, leaving innocent buyers in legal turmoil.
Delayed Possession: Buyers often face delays in getting their property, even after making advance payments. Developers take the money but fail to hand over the property on time, giving different excuses while keeping the buyers’ money.
Hidden Legal Issues: These are a big problem when purchasing a property. Some properties have hidden issues like unpaid loans, legal fights, or ownership disputes. Buyers often do not know about these issues until after they have bought the property, which can cause serious trouble.
Fake approvals: Some developers sell properties without getting the required government permissions. This can lead to legal trouble for buyers who don’t know about these missing approvals.
Red Flags to Avoid Property Fraud
Before committing to start the property transaction, you need to check for these red flags:
- You will observe attractive offers for prime properties, but check how low their price is; it should be at least in a believable range.
- Sellers will compel you to make quick payments. For example, if you fail to pay quickly, you may miss this attractive property for a lifetime. Genuine sellers always give you sufficient time to consider the offer.
- If the housing property does not have proper documentation or the sellers refuse to share the essential details for review, you need to avoid purchasing that property.
- You should never purchase or sell the property with unregistered agents or builders with no good history. It can be risky. Always choose trusted professionals to make sure everything is real and safe.
- The offered properties should have clear ownership. If it doesn’t have clear ownership or has legal issues, you can be stuck with huge problems after buying; you can face hardship to claim ownership.
- If you feel a lack of transparency in builder-buyer agreements, it can be a sign of property fraud. Buyers may be taken advantage of if the agreement between the builder and buyer is unclear. Hence, it is important to have a proper, well-defined contract.
Steps to Verify Property Legitimacy
Before starting the property transaction, you need to verify whether the property is genuine or not by following the following steps:
Property Title Verification
You need to conduct the property title search to ensure that the property or home has a clean title and check whether it has any defects, like liens. This involves a process of checking the chain of ownership through possession certificates and public property records. You can perform it personally or with the help of a title company that is interested in making an offer on the property. The title search report will confirm that the seller has a clear and marketable title to the property. If there are any hidden issues behind, this title search report will reveal them.
Encumbrance Certificate
You need to get an encumbrance certificate from the respective sub-registrar’s office. This certificate will work as a trustable proof of no loans or liabilities above the property. Thus, you can avoid the transfer of any potential financial burdens on property. Commonly, this encumbrance certificate provides a complete history of all registered transactions related to the property, confirming its clear status.
Approvals and Permits
You always need to verify that the property you are about to purchase has all the essential approvals and permits from local authorities. In Karnataka, checking with the Real Estate Regulatory Authority (RERA) or the municipal corporation is necessary to confirm that the property follows local building laws and regulations. If possible, check for environmental clearances to ensure the property does not pose any ecological or health hazards.
Physical Verification
You need to check the property directly to confirm that the property is suitable for you. By directly verifying by visiting the site, you can confirm the existence and condition of the property firsthand. Whenever you visit the site, consider conversing with neighbours or local residents to understand the property and the surrounding area. Their input can provide valuable information about the neighbourhood dynamics and any potential issues regarding the property.
Legal Assistance
Consider hiring a trustworthy real estate lawyer to review all necessary documents and spot any problems or mistakes in the paperwork. An experienced lawyer can easily identify the complexities of real estate laws and ensure everything goes legally.
Tips for Safe Real Estate Transactions
Before starting any real estate transaction, you need to consider the following tips to make a secure investment.
- Always work with registered and lawful agents and builders. Always check their credentials and track record to ensure you are dealing with trustworthy professionals. By doing this, you can reduce the risk of fraud.
- Always take a proper sale agreement. A properly well-structured agreement will clearly state all terms and conditions, protecting both parties’ rights. This will avoid future consequences.
- Always avoid cash transactions by using cheques or online transfers, which can create a clear paper trail. This will act as proof of payment, preventing fraudulent practices.
- Always check for RERA registration; this will ensure that a project is registered under the Real Estate Regulatory Authority (RERA) and guarantees adherence to legal standards. This registration means transparency and accountability from the developer.
- Background check the builder. Learning about their past projects and knowing customer reviews will help to consider reliability and quality of work.
- Always put everything in writing. Do not trust verbal promises because written agreements are important for clarity and legal proof in real estate deals.
Importance of RERA and How It Protects Buyers
The RERA Act 2016 (Real Estate (Regulation And Development) Act) was mainly created to control frauds or scams in the real estate sector in India.
Clear Framework: It includes a clear framework for property transactions, and RERA promotes transparency, accountability, and ethical practices between developers.
Project transparency: Here, builders have to provide all essential information about their projects, allowing buyers to make informed decisions
Timely delivery of properties: Developers or builders are responsible for any delays; this protects buyers from the common snags of project delays.
Buying only RERA-registered projects helps buyers stay safe from fraud and make secure investments. It also creates a safer market for everyone.
What to Do If You Fall Victim to a Real Estate Scam
If you become a victim of a real estate scam in India, you can do the following immediate acts to recover your losses:
- In the nearby local police station, file a complaint, particularly if the scam involves fraud or misrepresentation. Always remember to include these important sections of the Indian Penal Code (IPC) when registering the scam:
Section 420 – Cheating and fraudulently affecting the delivery of property
Section 467 – Forgery of valuable security or documents
Section 471 – Using forged documents as real.
These sections help the police investigate the fraud and institute criminal proceedings against the fraudster.
- If online fraudsters scam you, complain to the cybercrime cell.
- You should contact the Real Estate Regulatory Authority (RERA) to lodge complaints against the offending developer or agent, as RERA provides a mechanism for addressing such complaints.
- Consider going to court by filing a case in consumer or civil court to seek compensation for your losses.
- Report the scam to the respective authorities and consumer protection organisations to avoid others and prevent similar scams.
Property or real estate fraud is a tough experience, causing huge losses. You must understand your legal options and take prompt action, which will make a huge difference. With expert support, you can protect your rights and recover your losses.
Hemali Patel