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Scams and frauds in real estate

There are many types of property scams going in the real estate market from small to big all type of scams while buying a property you should check many things which I am going to tell you in the article

What we are gonna learn

  1. Are there scams and frauds going on in the real estate sector ?
  2. How this frauds happen?
  3. some most common frauds and scams
  4. Things to keep in mind to save your self from this scams
  5. Government’s step to save buyers from this scams or frauds?
  6. Conclusion
  7. FAQ

Are there really scams and frauds going on in the real estate sector?

Yes there are a lot of small and big scams going in the real estate sector. Real estate is a sector in which a large amount of money is involved.

Generally, a property starts from minimum 12 to 15 lac rupees and there are a lot of property scams happening in this as a form of small expenses like taking excessive money for electricity meters, duplicate papers, keeping you unaware of some charges, any dispute going on. Let’s have a look at it all

property scams

How this property scams and frauds happen?

Now we go to a real estate broker when we want to buy a property, then we tell them about our budget and they suggest some properties.

 Trusting on a broker is a must, but trusting blindly can be very dangerous. In most of the scenarios one person buys property one or two times in his/her life.

So the buyers have very low experience especially in the case of 1st- time buyers, they don’t have any knowledge about the property, how to check about the materials or quality of construction because in many cases the quality of construction is not up to the mark and the brand shown is not used in it.

 Many buyers lose their money in paperwork or work related to tehsil, because in our country the paperwork thing is very difficult and the environment in these government offices is not friendly at all. Now we will talk about the frauds and scams in this segment

Some most common frauds and scams

Disputed property:

It is very commonly seen that buyers accusing seller or broker about the disputed property, we don’t check the paperwork to save some money, and that small saving can make your life long saving into a waste.

 It’s very common to see that a new buyer has purchased a property and when they move there, they received a legal notice or get to know about the disputes going on the property.

And now the new owner is fighting for his property. Because of this type of fraud some people go into depression and some commit suicide.

Dual registry:

In Punjab, it’s very common fraud one property is registered on the name of two or more persons. Now you must be thinking that how it can be possible. How can be there 2 registry of 1 property, but trust me I have seen peoples whose property is registered in many people’s name.

 It is possible by tampering the paperwork and this happens a lot. After all this, you have to fight a long legal fight which takes up to years, and yet there is no guarantee that the result will come by your side.

 Most of the time its seen that the property goes to the person on whose name the intakal is updated.

property scam

Keeping you unaware of the expenses other than BSP:

There are a lot of cases that came to highlight the extra expenses other than the base selling price of the property. We have seen so many times in the newspaper about the buyer saying that the seller or builder has never talked about any other expenses other than the base selling price, but now they are asking for more money as of many expenses. And at the end buyer have to pay that expenses.

Late possession:

It was very common in Indian real estate about the late possession of under-construction properties. It’s seen that there are some projects which are around 5 years late from there a deadline and the buyer who has purchased property in that project are crying because they are paying the EMI from the last 5 years and they have to pay rent also and they are not getting their homes. And the builder Companies are not even paying any compensation to buyers.

Bad quality or not delivering what they have promised:

It is seen that in the real estate field there are so many cases that the builder has not given the quality they have promised, and have used local brands instead of the brands which are mentioned earlier at the time of sales. Quality is a must factor in terms of real estate but some builders don’t fulfill this either.

Charging more amount for documents:

As I have a wok experience I real estate, I have seen many brokers charging more than the amount which is needed. In documents like non-encumbrance certificate, a 13-year record are necessary for loan, it takes around 1 week for this document after you have applied and it takes time for the appointment in tehsil too.

Brokers try to be over smart and talk to clients about they know people inside the tehsil. And brokers charges almost double the amount whats required.

 As normal buyer don’t have enough information about it that how much amount is needed for this, the buyer trusts the broker and pay them double money from his hard-earned money.

Charging fee as tehsildar’s black fee:

If you have any previous property buying experience then you must have seen broker saying about the 1% black fee of tehsildar.

 There’s nothing like that brokers knew the fact that the buyer is new and he can not do the entire registry on his own so they make this story to make more money out of it.

 You should not trust anyone blindly, if they say you about this say them to give you a proper receipt for this as in tehsil at the time of registry you will get receipt of any amount you pay so keep this in mind.

Things to keep in mind to save your self from this property scams.

  • Don’t trust brokers blindly, and always search for a broker who has  a good customer feedback.
  • When you are going to finalize a deal, take everything in written form with companies stamp. Price at which deal is finalized and other expenses also. How much you have paid and how much amount is pending.
  • Before finalizing any deal take a look at the paperwork verify it with the tehsil. You have to pay a small amount for verification. But in case of any disputed property that small amount can save your life long savings.
  • Try to do almost all the paperwork by yourself. Because paperwork is one of the ways for brokers to earn extra money
  • Do not pay any black fee on the name of any government officer. As there is no such thing, all this is just to earn more money out of you.

Government’s step to save buyers from this property scams or frauds?

Government is doing there bit to save buyers from this type of scams. But for that to you have to be extra conscious before taking any decision

RERA:

RERA is the real estate regulation act of India and it was started in 2016.

Which tracks almost everything about projects and it has imposed a large numbers of fines to the companies. For every project which is more than 500 yards they have to apply for RERA number.

how RERA helps buyers

 RERA number is a unique number which is allotted to all the projects that are registered by RERA.

For RERA registration companies have to submit every detail. About material from tiling to paint and from cement to iron bars to the RERA. And in the final product they if change anything before taking approval from RERA they have to pay a huge fine.

 RERA has also solved the late possession issues. As the company has to choose a proper deadline for the completion of a project. And they have to deliver the project from that date, they can delay it for max 3 months.

In the case of late possession builders have to give a proper justification. And if the company fails to justify the reason or fails to give the project on time that have to pay huge fine to RERA. And compensation to the buyers.

There are many other features of RERA too.

Government is spreading awareness amongst the peoples so that they could know what to do and what not to do. The government advises people to go for only RERA  registered projects.

If they are going for projects like apartments, buildings, or townships. If you are going for an individual home than you don’t have the option of RERA. But you should in mind what we have discussed in the upper section of this article.

Conclusion

There are a lot of scams going in real estate field. you should be aware of it and follow the things mentioned in this blog to save your self from this scams.

FAQ

Are there scams in property?

yes, there are many types of scams in property. like dual registry, late possesion, bad quality material, hidden costs.

How to save your self from this scams?

You can save your self from this scams by doing some normal things
like verifying property through municipal authorities before purchasing
giving money only through check and bank transfer
and asking for full payment plan in written form with company stamp

more on this topic

proeprty and its 3 types

change of land use

property tax and its 2 types

indian mentality about property

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