Property Fraud Explained: A Buyer’s Safety Guide

As the property purchases are shooting the nation’s economy, the fraudsters are also increasing their operations which are reminding the dangers the property buyers are exposed to. Times of India has reported a horrific incident where police found a huge scam in registration of property in Bengaluru where more than 1,300 of the properties were registered illegally by doing manipulations in the E-Khata system. Sub- Registrars have been suspended due to the systemic oversights of the property documentation, by the state government investigation into the matter presented before the authorities. 

This news acts as a bad eye opener for the property buyers and the government, as swindling of the properties in the system is not just a news story but a real incident which can anytime happen to prudent buyers anytime. It is significant to be known to the frauds and have measures in mind to avoid them in thriving market of Real estate industry. Information provided by reputable real estate sources such as Neevilas may inform purchasers to make informed precautions.

1. Scams through False or Counterfeit Documents of Property

The most frequent type of scam that exists in the Real estate market is fraudulent titles and of forged sale deed of the property. The sellers who intend to defraud the buyers introduces the counterfeit documents that appear to be official and this will make buyers engage in transactions where the seller does not own the property. The buyers must insist in providing the original documents of the property and must pay a visit to the office of Sub- Registrar for checking the original documents. Purchaser must have a comparison of land record, encumbrance certificates and mutation history assists to verify right ownership. Neevilas suggests that not checking titles is one of the most common errors that may result in buyer conflicts. 

2. False Pre-Launch/Investment Offers

As reported by The Hans India, Cyberabad police have made arrets of two personals for committing fraud on 200 Victims through presenting deceptive pre-launch and investment offers. These Fraudsters offer large returns or early-bird deals on projects which never materialized or were not given the go-ahead. Cyberabad police had once arrested people who were associated with a multi-crore pre-launch scam in which buyers were hooked with unrealistic returns.

3. Fraud Involving the Funds of Homebuyers

As reported by The Indian Express some bogus developers are gathering finances from the homebuyers to construct the homes but use the funds to create a funding channel for totally unrelated projects. A real estate company is said to have misused more than 200 crores of the money paid by homebuyers in other unrelated hospitality development projects. Experts at Neevilas suggest the buyers put their faith on realistic developers who have hands full experience in the marketplace. 

These kinds of frauds can leave the buyers in financial shocks. Providing due diligence will be the most important facet as a protection factor in an industry where scams are highly prevalent. Before any payment is made, property purchasers need to ensure that titles, registrations, credentials of developers, approvals and financial compliance are checked. RERA portals, official land records system, and trusted real estate information providers like Neevilas enable the buyer to be knowledgeable enough to make expensive errors.