- NRIs are an easy target for scammers when it comes to property fraud.
- Common types of property fraud targeting NRIs are the sale of fake property, forged title documents, unauthorized Power of Attorney, multiple sales of the same property, etc.
- NRIs should always be patient with purchasing or selling property in India. They should make an informed decision after a thorough research.
- You can avoid property fraud by taking measures, such as scrutinizing property-related documents, physically inspecting the property, and getting legal assistance wherever required.
- If you want to bear the fruits of real estate investment without putting in the time and effort, you should hire a reputed property lawyer to safeguard your rights and interests.
We see common occurrences where naive NRIs are scammed into buying properties in India that do not exist. The real estate market in India is filled with scammers who promise NRIs a hundred per cent return on real estate investment. However, when NRIs invest their hard-earned money in such schemes, the scammers vanish. Buying real estate is usually the most significant investment in one’s life; therefore, it becomes imperative to be diligent while investing your lifelong savings into real estate. This article is written to protect NRIs from such real estate scams and make them aware of common types of property fraud.
Why are NRIs the target of property fraud in India?
NRIs are often easy targets of property fraud as they are unfamiliar with local market trends, risk factors involved in real estate and their inability to be physically present in the country to scrutinize the transaction at every step. Before we jump on to how we can safeguard ourselves from various property frauds, first, we need to ascertain the common types of property fraud in the Indian real estate market.
Types of common real estate frauds:
- Sale of fake property: Scammers and phoney brokers create fake property advertisements online at lucrative prices to lure NRIs. These fraudsters will ask for down payments to book the property, but they vanish into thin air once you make the payment.
- Forged Title documents: Fraudsters forge title documents as they know NRIs will not be able to verify the authenticity of documents. Some brokers deceive NRIs, showing forged title documents of properties that they do not own.
- Misuse of Power of Attorney: Generally, NRIs give a POA to a trusted friend or family member. Sometimes, the attorney holder takes advantage of your trust reposed in them and uses the Power of Attorney to sell your property.
- Impersonation: Fraudsters make fake IDs or websites of legitimate real estate agents or developers. Once NRIs are convinced they are dealing with a legitimate company, they invest in real estate through this fake channel. After receiving the funds, the scammers delete their IDs and websites and are nowhere to be found.
- Project development fraud: Real estate companies lure the NRIs clientele with fake promises. However, once you invest in one of such projects, the builders fail to complete or deliver the project in a prescribed time.
Numerous other property fraud surrounds the NRIs, and these scams are emerging daily as scammers use advanced technology to deceive innocent buyers.
Tips to identify and avoid property fraud:
NRIs should remember that when they get a deal too good to be true, it is a scam in most cases. The first step to avoid these scams is to identify the common property scams, and the next step is to take measures to verify the transaction’s authenticity on each step.
Tips for NRIs to avoid property fraud:
- Do your research: NRIs should thoroughly research about the property, title documents and authenticity of the seller before investing in the real estate.
- Scrutinize property documents: Always get all the property-related documents, such as the sale agreement, encumbrance certificate, land record, etc., from the seller. Hire a reputed advocate to conduct thorough due diligence on all the documents and verify the property’s current status.
- Physical inspection of property: Physical inspection helps in assessing the current condition and valuation of the property. Physical inspection of property is a difficult task for NRIs; therefore, they can send an authorized person for property inspection.
- Registered Power of Attorney: If the seller is not the owner but has Power of Attorney authorizing him to sell the property, you should be cautious. Power of Attorney should be registered and not merely notarized. You should contact the owner to verify the authority of the Power of Attorney holder.
- RERA Registration: You should make sure the project is RERA registered if you are planning to purchase a flat or property from a developer. RERA compliance ensures transparency and safeguards the interests of the buyers.
- No Objection Certificates (NOC): Ensure the seller has NOC from relevant authorities in cases where the property is situated in a society.
- Record of all the transactions with the seller: Keep documentation of all the payments, agreements and communication with the seller in a secure place.
- Legal Assistance: In case of any doubt or issue, NRIs should immediately consult a lawyer and take steps to safeguard their interest.
Making an informed decision when investing your hard-earned savings into real estate projects is always advisable.
As an NRI, you should do thorough due diligence before purchasing or selling real estate in India to avoid property fraud. Suppose you want to avail yourself of the benefits of real estate investment in India without the hassle. In that case, you can hire a property lawyer to do the due diligence for you and protect your future rights and interests.