Real Estate has grown to be one of the most difficult and expensive possession with some even investing their whole life’s wealth in the land or building. Considering the scams occurring in the real estate industry, purchasing property has grown difficult. Although now there is RERA monitoring the real estate sector and buyers are watchful before making a purchase, it can be challenging to spot and avoid falling victim to fraud. Additionally, first-time purchasers find it to be much more challenging. Title deception, hasty sales, forced cancellations, delays in possession, fake and unkept promises, selling without authorization, selling the same unit to multiple buyers, and encroachments are a few examples of the various forms of real estate fraud. Legal procedures are expensive and time-consuming. Therefore, here is a short check a consumer can do to avoid real estate and property fraud.
- Don’t rush the purchase. Conduct due diligence and make sure the offer is a fair price or not by gathering information about surrounding property prices from a variety of sources.
- Don’t just rely on the visuals displayed on the internet, in advertisements or in brochures. Visit the land or project site and get the opinions of the nearby store owners and neighbours on the location and neighbourhood.
- Check to see if the project has received any bank approval for financing, this is a strong sign of dependability as banks only grant loans after carefully inspecting the project.
- Check the owners'/developers’ track records, get references from previous customers to attest to their dependability, check internet reviews, and Google them to look for any indication of fraud in the past.
- To comprehend each clause and its implications, thoroughly read the documents several times. Have a legal professional study it so they can warn you away from anything concerning. Talk to the builder or seller about the conditions or sentences that don’t sit well with you and get them modified.
- Make sure that the agreement explicitly states the construction timeframe and a delay clause to protect yourself against project completion delays.
Documents to check while purchasing a built property or land:
- Title/Mother deed: This is the primary legal document that aids in tracing the history of property ownership. The references to prior owners shall be listed in the mother deed in a sequential manner till the present owner.
- Land conversion certificate: The document is issued when agricultural land is converted to non-agricultural land allowing commercial or residential development on the land parcel. Any construction on the land without the conversion certificate is considered illegal and allows the responsible authorities to demolish it. A land conversion certificate must be secured before purchasing the land or building.
- Land-use certificate: A certificate mentioning the specific utilization (residential, green belt, commercial etc) on the land parcel.
- Property assessment extract: The property assessment is done by the municipal authorities for tax purposes on a yearly basis considering the property prices and market conditions in the neighbouring areas.
- Latest property tax receipts: Evidence from the municipal authority showing the property tax payments made to date. The buyer might use the property’s survey number to get in touch with the local authority to authenticate ownership if the seller doesn’t have the tax receipts.
- Encumbrance certificate: This certificate shows any mortgages, title transfers, or other legally recorded transactions made against the property.
- Power of Attorney: A power of attorney is a legal document that grants someone the ability to rent or mortgage property on his or her behalf. However, it is also necessary to register this document.
- Property Survey Sketch: The borders of the land parcel are precisely measured by a property surveyor, creating to-scale maps, and plots for use in buildings or other legal papers. This is crucial to prevent any future boundary disputes and determine whether there are problems that need to be revealed before you decide to buy a property.
- RERA certificate: A RERA certificate is a legally binding document that attests to the registration of a property, project, or real estate agent with a state-level RERA body. Along with the unique project registration number, the certificate contains details on the developer, the property, and the agent. A developer, builder or real estate agent cannot promote or schedule the sale of the property without the RERA certificate.
- Sanctioned Building Plans: A set of plans (site plan, building plan, landscape layout, services layout etc.) and specifications submitted under the bye-laws in connection with a building and duly approved and sanctioned by the authority before starting the project.
- Completion certificate: A completion certificate issued by municipal authorities certifies that a structure has been built in accordance with the regulations and according to the authorised plans.
- Occupancy certificate: The concerned authorities will inspect the building to ensure it complies with all applicable standards. This document attests that the construction is ready for occupancy.
Given the issues with land records, digitization has become a realistic option since it helps property owners, buyers and the government, bringing transparency and clarity to real estate property deals. However, to prevent any kind of property fraud or real estate scams it is important to undertake the verification of these documents with the help of a good real estate lawyer or consultant.
