Property frauds: 10 checks that will keep you safe
Often naive home buyers are tricked by scamsters who take advantage of the former’s ignorance to dupe them of their hard-earned money. Buying a house is normally the biggest purchase a person makes in his lifetime. Therefore, any laxity in doing due diligence while buying the property could cost you your entire life savings.
Here are a few common ways property is sold fraudulently which you should be aware of;
- Forged Property Documents:
- Fraudsters may provide forged property documents, including fake sale deeds, titles, or ownership documents. Always verify the authenticity of the documents with legal authorities.
- Legal eagles advise against buying properties through power of attorney because there are good chances that the property being bought by you on power of attorney is a fake one.
- Properties are sold based on fake legal heirship certificates. These kinds of frauds usually happen due to unavailability of original documents.
- Encumbrance Certificate Fraud & Non-Disclosure of Liabilities:
- Ensure that the property’s encumbrance certificate is genuine. Some sellers might manipulate or provide fake certificates, hiding existing debts or mortgages on the property.
- Sellers may hide existing liabilities on the property, such as outstanding loans or legal disputes. Conduct a thorough due diligence process to uncover any hidden issues.
- Land Grabbing & Identity Theft:
- Unauthorized individuals or groups may take possession of land illegally. Verify the ownership and possession history of the land through proper channels.
- Fraudsters may pose as property owners or authorized representatives. Always verify the identity of the seller through legal means and conduct transactions in person.
- Bogus Builders/Developers:
- Verify the credentials of builders and developers. Some may promise amenities or construction quality that they do not deliver. Check reviews, visit completed projects, and verify their track record.
- When title deeds or revenue records are fabricated:
- It is imperative to check if the property you are buying has a clear title and is in the name of the seller whether it’s an apartment, land or an independent house. Moreover, the original sale deed should have been registered. You should thoroughly cross-check the entire chain of documents. The chain starting with title deed which validates that the seller is the true owner of the property to sale deed, encumbrance certificate, property tax receipts, among other things.
- Misleading Advertisements:
- Be cautious of property advertisements that seem too good to be true. Some scammers use fake listings to attract buyers and take advance payments without intending to sell the property.
- Under-Valuation Fraud:
- Some sellers may undervalue the property to reduce stamp duty or registration fees. Be wary of such practices as they can lead to legal complications later.
- Advance Fee Fraud:
- Be cautious about paying advance fees or token amounts without proper documentation. Scammers might vanish after receiving the money, leaving you with no legal recourse.
- Illegal Constructions:
- Verify that the property adheres to local building regulations and zoning laws. Some constructions may be illegal, leading to potential legal issues.
- Non-Approved Projects:
- Ensure that the real estate project has received the necessary approvals from local authorities. Investing in non-approved projects can result in legal complications.
To avoid falling victim to these frauds, it is advisable to consult with legal experts, conduct thorough background checks, and work with reputable real estate agents and developers. Always check document transactions carefully and seek legal advice if needed.