Looking To Buy A House/Invest In Real Estate? Here Are Some Tips To Avoid Falling Prey To Fraudsters
A home of one’s own is a dream for most people in India. But that dream may turn into a nightmare if you don’t get what you wished for despite shelling out hard-earned money. In Delhi, builder frauds worth Rs 1,357 crore have been committed in 2022 alone, as per a TOI report. Even though the implementation of the Real Estate (Regulation and Development) Act, 2016, has brought down the number of real estate scams by a considerable margin, still several homebuyers are falling prey to scamsters.
Following are some of the red flags you should look forward to before investing in real estate:
- Rushed Sales : Some builders advertise their products in such a way that it’s a now-or-never offer. They’ll try to make investors believe that if they don’t accept the offer in a stipulated short time span, the offer will be gone forever. Even though we cannot say all builders using this technique of rushed sales are fraudsters, there can be chances that they’re hiding facts to push sales.
- Title Fraud : This type of fraud happens when a builder forges the property’s title documents and claims themself as the owner or power of attorney holder of the property. Properties that have been lying abandoned for several years are usually used to commit this act.
- Deliberate Delays : This happens in case of under-construction buildings. Some builders purposefully delay the process in order to get the requisite number of buyers.
- Promises Of Mindblowing Returns : Some builders try to lure investors by saying that they’ll get huge amounts of money through rentals once the property is built. Some may even make fake rental listings online. But in the end, it may be too difficult to attract tenants. The investor should do his/her own research, both about the property and realtor before signing up for the project.
- Indirectly Forcing Cancellation: Once a deal is signed between an investor and a realtor, a builder may create reasons to blame you and your payment methods. This could lead to creation of a panic inside the minds of the investors and they might cancel their bookings. In most cases, the booking amount won’t be reimbursed, otherwise, there could be a cancellation charge. Later, the builder may go for another investor for a higher rate.
- Hike Prices Artificially: In such cases, builders tend to commit fraud by manipulating payment invoices and creating artificial hikes in the prices. They might exaggerate the payment made for labour or construction material.
- Deviation From Specified Plans: When a builder approaches you to invest in the property, a luxury of extravaganza may be displayed in sample photographs. However, once the project starts, the builder may change some of the previously-agreed-upon plans to cut the cost of construction. Sometimes, they might reduce the size of something like a lawn or a parking space, or use low-quality materials for construction et cetera.
- Multiple Investors Maybe Sold Same Unit: There have been instances where a fraud seller sells the same property to multiple persons. Eventually, by the time the investors realise they were duped, the builder would’ve fled and those investors would be left to take the battle to the court.
- Sale Of Encroached Land Or Properties Built On Encroached Land: In such instances, investors would be sold land or properties built on land encroached by local land mafia. The land may actually belong to the government or some other individual who resides in a faraway location, and hasn’t visited the place for several years.