A Practical Legal Guide

With rising prices of the property across the country and particularly in regions like Delhi-NCR. It is a breeding ground for scammers, fraudsters, document forgers and land sharks. However, most property fraud cases can be taken away if basic due diligence and legal verifications are done.

 

1. Understanding Property Fraud in India:

Property fraud generally involves committing Cheating or any sort of deceitful misrepresentation to obtain the wrongful use of property and causing loss to the property owner. These can involve:

• Fake or forgery of property deeds and title documents
• Selling the same property to more than one buyer
• Illegal trespass and unauthorized occupying (land-grabbing) of land
• Misuse or undue exercise of power vested in an attorney holder
• Fraud by developers (non-approved projects, selling multiple units, failure to deliver
• Benami transaction and cash payments

A proactive approach involving preventive measures and swift legal action when required is the ideal response.

 

2. Pre-purchase: Essential Legal Checks:

 

(a) Title and Ownership:

Your legal protection starts with checking the property’s legal status. Examine the chain of titles (previous deeds), identify who legally owns the property. Get an EC (Encumbrance Certificate) to check the property’s history. 

An EC is a certificate obtained from the Sub-Registrar’s office.  An EC registers encumbrances or any other charges like mortgages, sale, lease, or loan on a property. A clear EC free of any entries signifies no loan or legal case on the property.

• Title deed / Sale deed
• Chain of title
• Encumbrance Certificate (EC)

 

(b) Revenue &Municipal records:

Verify mutation/khata/record of right entries from land records authorities to see if current ownership is updated. Review the latest property tax receipt to know that property has not encroached or built on land that has illegalities attached.

• Mutation/khata/record of rights
• Property tax receipts/ municipal tax records.

 

(c) Sellers Identity verification:

Sellers’ I.D proof like PAN/Aadhaarcard, photos and signatures should match property documents. If the seller is operating under a POA, ensure that it is legally registered, valid and unrevoked. If the POA is not notarised, you can lose claim on the property.

 

(d) Physical verification and boundaries of property:

Ensure that the dimensions of property and Boundaries match the document information. Site inspection may help you know how exactly property is planned and structured. Land measurement with experts and comparing it with original records may save you in property fraud cases like encroachment.

 

3. RERA and Project Approvals for flats and houses:

Before signing for properties booked in ongoing construction phase – either flats or houses, make sure of;

• RERA approval for projects and compare with actual on-ground project. RERA Registration number needs to be verified for its validity on state RERA website.
• Government’s relevant building sanctions & approvals (Occupancy/Completion certificates) for housing projects are critically important.
• Builder’s background. Check the records of developer on RERA website. For example, many instances of fraudulent claims of RERA-registered properties are doing rounds in news. Always seek assistance of lawyers.

 

4. Making transaction “Safe:

 

(a) No cash payments:

Any money paid for property needs to be in verifiable channel, such as Bank transfer through RTGS/NEFT or cheque . Avoid any sort of cash payments or under the table” pay outs. Cash payments usually help Fraudsters easily deny transaction if they want to renege on the deal.

 

(b) Always register Sale Deed :

Once satisfied and done with legal checks and property seems a worth buying; execute a Sale deed after paying necessary stamps duty and registration fee before Sub-Registrar, and get back registered deeds for possession and security. A Registration of sale deed is legally a proof of possession. Unregistered documents are merely weak proof.

 

(c) Seek legal consultation:

Property lawyer or law firms offer services like title searches, document vetting, legal opinion for specific property transactions which will secure you from property fraud risks and avoid financial loss, legal hassles later. Title Search Report gives an overall idea of clear title of property to buyer.

 

5. After-sales Property Protection:

Once purchased make sure –

• Store all deeds, tax-receipts, EC etc., safely in one place. Take digital copy for backup and in case originals get damaged.
• Confirm properMutation in land records is done in buyer’s name.
• Update all details for utility connections like electricity bill and water bill.
• If your property is an vacant plot – Fence it out, give notices that no construction is permitted and also inform registrars about it.

 

6. Legal Steps on Property Fraud:

If, unfortunately you have already faced any property fraud:

1. Immediately file your FIR in nearest police station: If not, get the case lodged against the individual or entity who defrauded you; usingIPC sections like 420 (cheating), 467 & 471 ( forgery of documents).
2. File civil case in court: For a cancellation deed of fake sale deed. Other remedies could be declaration suit of title on property from court. In certain cases, injunction orders can also be sought to prevent further sale.
3. For builder fraud: File complaint in RERA tribunal and consumer court.
4. File a ‘Caveat’ petition with registrar: A ‘caveat’ petition will directly alert you if anyone attempts to register any document regarding the said property and help block future transactions.

Property is one of biggest financial investment and must be treated very cautiously. Prevention and timely legal check ups will largely curb most common property scams and fraud issues faced by property buyers in India, especially in the rapidly growing real-estate market like that of Delhi NCR regions.