Common frauds in the transfer of properties

Perception is – Where there is property, there is a fraud!  Possibly because, there is a lack of transparency in the processes, and the documentation is not simple. Also, in most cases, there is a casual approach to property management issues.

Here’s a glimpse of what the transfer of property entails, the potential frauds therein, and the solutions

Transfer of Property:

  • The transfer of property is an act by which the owner of the property (transferor) transfers the ownership rights in the property to another person (transferee)
  • Property can be transferred in several ways like Gift, Will (Inheritance), Sale, Partition or Relinquishment of share in case of co-owners.  
  • Property is transferred along with the liabilities attached to it. But it should be with the consent and knowledge of the transferee. E.g. in case of Gift, the donee must accept the gifted property with the liabilities if there are any.
  • There can be some agreement or adjustment between the transferor and the transferee about liabilities. It is generally there in case of inheritance, partition or relinquishment.  

Also Read: Property rights of a son on mother’s self-earned property – Issues and the Law

Fraudulent transfer and frauds:

  • When the transferor transfers the property by concealing the facts of liabilities/defect in property from the transferee intentionally, it is called fraudulent transfer. 
  • Some of the common frauds committed while transferring the property are:
  • Fake title: The title deed is fraudulent. The person presenting himself as the owner is not the owner. Property papers are false and forged. The title deed can be any document which depicts the title of the owner in the property. 
    • Multiple Registrations: The property transferred (sold) has got multiple registrations. The property is sold by the owner to many buyers fraudulently. The owner grabbed the money from all the different buyers and absconded. All the different buyers have to fight legal battle to establish their ownership.
    •  Pre-mortgaged property: It happens a lot of time that the seller/transferor has already mortgaged the property sold/ transferred with a bank to avail loan against it. Thus the property is not free from encumbrances. The fact is not revealed to the buyer, and the buyer loses his hard-earned money if he purchases the property without exercising due diligence.
    • Encroached property: The property transferred has been constructed on an encroached land. The actual land belonged to Government or another party, but the person who has sold the property to the buyer never disclosed the same. The transferee has to fight legal battles later.
    • Permissions not obtained: Properties like those in a Registered Society or Housing Board flats require special approval from the Concerned Authorities before transfer. In some cases, the transfer is not even permissible. But the people manage to defraud the transferee and transfer such properties without obtaining the necessary permission. 
    • Mismatch of location and area: The fraudsters transfer the property by mentioning the wrong location. The area (measurement) mentioned is also not correct. 
    • The person not authorized to transfer: (fake GPA or misuse of GPA): A person may transfer the property which he is not authorized to transfer. The power of attorney holder misuses GPA and transfers the property in violation of the terms of the same. Hence he cheats both the actual owner and the transferee. Sometimes the GPA is a fake document.
    • Encumbrances over the property: There are various kinds of encumbrances affecting the value of the property. These can be in the form of mortgage, lien, litigation (disputed property), unpaid charges (utility charges). The transferor of the property can cheat the transferee by not disclosing the same.

Also Read: The married daughters’ right in mother’s self-acquired property

The way out – Key to avoid the frauds:

  • Be alert
  • Take timely precautions
  • Take proper legal advice
  • Scrutinize the documents

Certain precautions will enable the transferee to avoid suspicious transactions:

  • Demand the original property papers for verification.
  • It is essential to check for the payment of dues. Verify the same from the respective Authorities, e.g. office of Municipal Corporation. It is vital to check if the transferor has paid the dues.
  • Visit the offices of local authorities to check out for the encumbrances on the property. The transferor must clear any loan availed by mortgaging the property.
  • If the Power of Attorney holder transfers the property, it is significant to verify its terms to ensure that there is a right to transfer the property.

Rajinder Kaur, UK

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I would like to express my thoughts as how thankful and satisfied I am with the service and assistance provided throughout the process, I HIGHLY RECOMMEND NRI LEGAL SERVICES to anyone who has any legal issues in India and is not in a situation to travel frequently, they can deal with matters with full privacy and confidentially.

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Sunny Grewal, London UK

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