Real estate frauds in India on an upswing

By Vipin Agnihotri

Watch out! Real estate frauds in India are on an upswing. Believe me, if you are not careful, your life’s savings could be at risk.

There is no doubt that booming markets invariably bring with it unsavory people, who try to make some fast money through illegal routines. This is more or less the state of the India’s property market at this point of time.

It has come into the notice of The India Street that there are developers who sell the same piece of land to number of customers, those who sell land without clear titles, those who construct without mandatory permissions from the authorities, those who violate building by-laws and those who flout sanctioned plans.

Even advertisements that quote the government department approval numbers are no guarantee that the approval has actually been obtained.

"We are worried about these developments. There are plenty of fly-by-night operators and others in the unorganized sector who do such fraud," pointed out Kanti Shah, managing director of Kanti Group.

Rahul Chandani, Director of Sunshine real estate, says when the market is good, anybody who has funds and some backing starts property developing. "Customers go to these players in the unorganized sector to save Rs 2 or 3 lakh. But this could be risky,” he says.

The question now arises: What should a buyer do?

First and foremost, it is important that you check the developer’s credentials and track record, check how long they have been in the business and whether they have delivered good products. In addition, you can also visit the other properties built by the developer.

Second — this is quite pivotal if you are going to an unorganized sector player — check for yourself, the titles of the land and make sure the developer has obtained all approvals for the project or employ a lawyer for this purpose. Also, in the course of construction, make sure the developer is going as per the sanctioned plan.

If experts are to be believed, there are developers who claim that the project has the approval of certain banks. Quite a number of times, such approvals come from a single branch of a bank and are not the result of any thorough scrutiny by the bank. It is worthwhile pointing that even banks are under pressure to disburse maximum amount of loans and consequently some of them skip scrutiny. Therefore, please, do your own scrutiny.

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