How to identify a property scam?

Source: 99acres.com

A dream home can require a lifetime of savings and evoke certain emotions. While the joys of a new home are plentiful, it is important not to become a victim of a property scam. Do you know how to identify property frauds in India? Let 99acres guide you through the tricky maze of real estate, ensuring a smooth and secure home-buying journey.

Encountering a property scam can be a terrible experience, as it can result in monetary loss and legal agony. One such incident happened in Mumbai, where the Economy Offences Wing (EOW) arrested a father and son duo in a builder scam of Rs 10 crore in Borivali. The duo gave allotment letters of four flats to Mukesh, a real estate agent. The allotment of letters was for the flats that Mukesh bought from father and son in a Borivali project, and some were for the apartments kept as security for his brokerage payment.

However, the duo duped Mukesh and sold a few of these flats to others. While the duo agreed to pay the lost amount to Mukesh in a year, they failed. Also, they promised to pay 24 percent interest on Rs 8.31 crore, which they did not. 

While this was one incident, there are several such cases that often get reported. Lack of awareness and research are certainly some aspects that lead to such cases. Hence, here’s a guide to help you identify property fraud in India and avoid being deceived.

How to identify a property scam?

Any of the following circumstances in your proposed real estate transaction can result in a property scam:

Seller wants to sell quick

If the seller is trying to close the deal immediately and demands a huge amount in cash, it could be a warning sign. A fraudster would show intense urgency and will try to offer a sweet deal for a hasty signing amount. Such a seller might also show over-enthusiasm in showing the documents without asking the same.

The property deal sounds too good to be true

If you are being offered a very generous deal, you need to be on your watch for a fake registry of property. At times, it is a way for the fraudster to tempt people with a good deal and to hook them with fear about missing out on a once-in-a-lifetime deal.

Suspicious documentation

If the seller is not offering inspection of title, ownership or loan documents, it could be a warning sign. In such a case, the seller is usually reluctant to approach banks or relevant government authorities for a no-objection certificate before the transaction.

The property is not available for inspection

If the seller does not offer a physical inspection of the property, then it's a sign of a scam. The seller should be able to provide complete details or access to the property.

Tips to avoid falling prey to a property scam

Here are some points to remember that may protect you from property scams.

• You should ever give an advance amount online without checking the seller's details and identity

• Also, never share your KYC and bank details with the seller/ agent without entering into the agreement

• While buying a property, you should be more vigilant in case the seller shows just photos and videos of the property

• Lastly, you must avoid online discussions to close the deal

  
  

What to do if someone forges your property papers?

Following are immediate steps that can be taken to address the said situation:

File a police complaint

You shoud file a criminal complaint against the culprits who caused the forgery with the police station within whose jurisdiction the property is situated. This will help carry out an investigation and apprehend all those involved in the criminal conspiracy.

Public notice

Issue a public notice informing the public at large not to place reliance upon the forged document for any nature of the transaction. You can also ask the public for any information on the forged document has been used for any transaction.

Seek expert advice

You can consult a lawyer and discuss legal options. You may also undertake a detailed title search with the office of the Registrar of Properties to ascertain if the forged document is used for any transactions.

Ch Lakshmi Kanth, Head – Risk and Credit Compliance, IKF Home Finance, shares, "The buyer who is the victim of the fraud should file a complaint immediately at the police station where the property is situated for forgery of the transaction, fabrication of documents, cheating, and absconding of the seller, among others. Also need to intimate about fraud transaction to concerned sub-registrar by way of physical notice through an appointed advocate. The buyer can also publish in media about this fraudulent transaction, and simultaneously he can send a legal intimation to the actual owner of the property without fail."

Legal options

If needed, you can also take the dispute to the courts for legal remedies. Rahul Hingmire, Founding Partner at Vis Legis Law Practice, adds, "Approach a Civil Court if the possession of the property is no longer with the rightful owner. This step is crucial to secure a court order to restore the possession and restrict the culprits from accessing/using the property on the basis of the said forged document. Another purpose of this action is to restrict the culprits from using the document to enter into any further transactions and secure a stay order if any further transactions are entered into on the basis of forged documents."

In summary, Indian real estate is growing rapidly. With a large number of property transactions being conducted, fraud can occur. Hence, as a home buyer, it is prudent for you to be alert before committing to any such deals.

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