Real estate is considered a better investment option when compared to others like the stock market (risky) and FDs (less return on investment). While you may fetch higher ROI investing in real estate, it can also be a breeding ground for people who want to take advantage of unsuspecting buyers. In these property frauds, they deceive buyers with deals that are too good to be true. And, more often than not, the unsuspecting investors take the bait. Unfortunately, in the heavily disorganized Indian real estate market, they are common, Pune real estate scene is no different.
Let us explore some common property fraud tactics and tips that can help you avoid the same.
- Title Fraud
Title fraud is when the owner of the property is deliberately made unclear. This usually happens when you are buying second-hand property from someone and they make duplicate papers with their name on the property when in reality the papers are not in their name. This can happen when a person wants to sell a property that is not theirs. Another situation is when the building is built by a developer but the land it is being built on doesn’t legally belong to them.
In another tactic of property fraud, a criminal might steal the title and personal information of a landowner and assume ownership of the real estate. Upon striking a deal, they’ll look for buyers or get a loan against it. Once the transaction is completed, the swindler will take off with the money, leaving the victim in debt.
- Offering Assured Returns
Many times developers say that they will offer assured returns of up to 12-14% at the time of possession if one invests immediately. Here, the buyer must ensure that there is a legal binding to this because otherwise, developers can opt-out of this promise. They may also offer post-dated cheques, but make sure you are purchasing from a reputable developer otherwise, the cheques may bounce.
- Being Forced To Cancel
Property rates grow over time. So a lot of initial buyers will get the same place at a much cheaper rate when compared to those who buy it 2-3 years later. So if you are someone who has bought the property at a cheaper rate then the developer may compel you to cancel your booking so that they can sell their property to a new buyer at this higher price. The ways the developer can get you to cancel are by delaying possession, unnecessary harassment, and more. So make sure all terms are determined before purchase.
- Delayed Possession
This is the most common type of property fraud in India. Delay of possession not only occurs in small projects but is also done by larger companies. Delays in possession can happen if the developer is in some legal trouble, does not have enough funds to build the amenities promised, etc.
But how does one avoid these types of fraud? Here are some quick tips so that you can stay alert.
Tips to Avoid Fraudulent Activities
- Always check details such as ownership title, price inclusions, etc. in detail before signing any agreement.
- Always check the RERA website and check for the project. Important details like the possession timeline can be found here so that your home acquisition doesn’t get delayed.
- Always take any sort of assurance/ promise in writing or official documents that are signed by both parties to avoid later challenges.
- One way to avoid these schemes is to get title insurance. This will help secure your real estate from infringement issues. It’ll also safeguard you from financial loss due to claims, encumbrances, and problems in the actual ownership of your property.
- Also, make sure that you work with reputable agents and lawyers. They’ll help you confirm the authenticity of the real estate you’re eyeing and may even serve as the mediator between you and the seller.
Hope these tips help you to avert fraud on your real estate investment. All the best!
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