How to avoid property frauds

Property fraud occurs where fraudsters attempt to “steal” someone’s property. Property is generally the most valuable asset individuals own.

Property frauds in India

In the current market, property frauds as well as the real estate scams were increasing at all the levels gradually. They are becoming extremely hard to identify which one is true and which one is not true. It is very essential to select the right property which individuals are willing to purchase and from the individual whom the individuals are buying. But there are many property scams which could be avoided easily with precautions.

Property frauds cases

Few property frauds which could be avoided easily are-

Title Fraud:

Title fraud is one of the critical kinds of property for property owners. In this kind of fraud the individual steals the individuality and uses false documents to sell the real estate property or to obtain a new home loan against the property. Once receiving the loan, the fraudster takes off the money and then keeps the future payment burden on the owner.

The best protector for this kind of property fraud is to obtain title insurance which safeguards an individual from the encroachment errors and concerns in the public records. One more key towards protecting this kind of fraud is to employ the protection of personal information. Safety actions could also reduce mistakes.

Rental Scams:

Most of the individuals start their house hunt over the internet; which is beneficial for the property fraudsters. In this kind of frauds, criminals pose as real estate agents and take the online rental listing as well as repost the same on another site on their names. Generally, they would offer the rents for less cost and they would ask the security deposit, as well as they would also offer a fake rental document. This is excessively risky because the buyer not only would lose the deposit sum but also lose their identity as the criminal has all the information on the rental agreement.

This is one of the most common scam in the real estate market. In order to avoid this real estate rental scam, the property owner could search addresses of their units on SE (search engines) like Google image search and they must also watermark the pictures they use in listings. They must include contact numbers too.

Foreclosure and home-equity fraud

In this kind of fraud, criminal entities take the benefit of house owners who are facing problems towards paying their mortgage payments. In exchange for a less monthly payment and an amalgamation loan, the house proprietor pays upfront fees and transfers the title of the property agreement the new lender.  Then the fraudster keeps the entire payment made by the house proprietor and sells the property without the knowledge of the proprietor.

When leveraging properties, there is always a possibility of risk. The proprietors looking forward to borrowing on the equity must be attentive for less meticulous lenders, for instance, those who invite proprietors to adorn their document through inflated income as well as property assessment value sources towards securing huge loans.

While spending, an individual must carry out some general research on the property which they are going to buy like the owner name, title research of the land, earlier transactions, mortgages and liens to avoid property. One must not share the documents with others and hire a reputed real estate agent to protect themselves from property frauds or real-estate scams.

Property management frauds

There are few ways to beware of property fraud. Other than the systematic checks, such as being assured of the title deed as well as land approvals, there are many points which a home buyer should consider while buying the first abode.

Deliberate delay

There are several builders who try to buy time till their project is completely sold or booked before they start construction. They also wait till they get the purchasers that suit their requirements. After generating sums of money form buyers, they deliberately divert it towards other projects, which makes the delay even longer.

Delay in approvals

There could be a situation where even after possession; an individual might find themselves stuck. For example, the project that an individual has bought in, might not have electricity and water connection approvals. There are cases where the land on which the project is developed is under the unauthorized layout or sub-divided land, or the structure is not as per the bye-laws or the guidelines; which could cause a long delay in the basic approvals for electricity and water connection.

Assured rental returns

Many constructors market their projects by announcing assured rental returns. There are cases where this could turn out to be only a marketing gimmick. Therefore, a buyer has to research and identify the market well before parking the huge amount of money in any project.

Change in the approved plan

When the construction of the project is completed, there are several projects where an individual see the difference in the actual common area space delivered or constructed is different from the one which was presented on the designed and approved plan. Owing to this buyers might have to comprise on the parking area, club area or an open space for which they have already paid for.

Tall promises

Towards selling off their projects and generate funds, many builders make tall promises towards the buyers at the launch stage. Generally, these promises are too big to accomplish. The first time buyers must be aware of such promises.

Sale deed

This is the main legal document, a proof of sale and the transfer of ownership from the seller to an individual. A sale deed must be registered, aside from ensuring that the property has a clear title

Mother deed

This is the parent lawful document that helps trace the antecedent proprietorship of the property. An individual would need this document to sell their property in the future. One has to make certain that the mother deed has recorded the references towards earlier ownerships in a continuing sequence until the current owner.

Approval plan of your building

An owner of the property is required to acquire an approval plan either from the jurisdictional commissioner or from any additional officer authorized by the commissioner. To get a building approval plan, it is required to submit the following documents. They are:

•    Title deed

•    City/panchayat survey sketch

•    Latest tax receipts

•    Foundation certificate

•    Certificate of Land-use

•    Property assessment extract

•    Property PID number

•    Earlier sanctioned plans

•    Drawings of the property

Conversion certificate

The majority of the land in India is still farmland. Due to this revenue authorities issue a conversion certificate, affirming the change in land use from agricultural towards housing. A no-objection certificate must be obtained from the tehsildar's office for this conversion.

Encumbrance certificate

This involves a change in the ownership of property that was held against a home loan. In other words, this document would give an individual proof of mortgages, title transfers or any legally registered transaction against the property.

Power of attorney

A power of attorney is a document that lawfully given authority towards an individual to rent or mortgage the property on his behalf. However, this document, too, must be registered.

Tax receipts

One must take a thorough look at all the receipts to make certain that taxes have been paid until the date of sale. The buyer must ask for the latest original receipts so as to establish the credentials of the owner. If the seller doesn’t have the tax receipts, the buyer could contact the municipal body by using the survey number of the property towards confirming the ownership. Other regular bills like water and electricity bills must also be checked.

Completion certificate

A completion certificate through municipal authorities states that a building is in compliance with the rules and is built as per the approved plans.

Occupancy certificate

To make certain that the building is meeting each and every required norm, an inspection would be performed by the authorities when the developer applies for this certificate. This certificate certifies that the project is ready for occupancy.

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Author:

eStartIndia Team