Saving yourself from fraud while buying or selling a property

Saving Yourself From Fraud While Buying or Selling A Property

It is a bitter fact that there is an occurrence of frauds while buying or selling the property. Misinformation or Ignorance or lack of information on procedures and documentation is the main cause.  However, one can easily avoid these complications. 

Some of such common frauds are:

Imperfect Title – For a buyer, it is significant to ensure that the seller has a clean title and can transfer the ownership rights in the property to the buyer. The title should be free from defects. The imperfect title means there is any encumbrance on the property or the property is disputed.

Multiple mortgages: The seller has mortgaged the house to different banks before selling the same.

Read More: How to obtain probate of a Will

Delayed possession by developers – In case of buying house/flat constructed by a builder, possession of the flat is often delayed. The buyer’s money gets blocked.   

Building not as per the approved plan– The builder does not construct the building as per the sanctioned plan. Necessary approvals from the Government are not taken. The property is not as per the description/advertisement. Sometimes the location of the property may also differ.

Fake Documents– There is also a practice of preparing fake title deeds. Either the signatures are forged or the document (property document) is not valid i.e. proper stamp duty not paid or document not registered as required.

Fraud by Impersonation: The person presenting himself as the owner of the property is not the actual owner. The documents are signed forging the signatures of the actual owner.

Home equity frauds– In simple words, home equity frauds means a fraud where the fraudster hacks the information about the true owner and reroutes the loan amount to his account by forging the signatures of the actual owner.

Read More: Transfer of Property on the basis of Registered or Unregistered Will

Misuse of power of attorney: A POA granted to execute a sale deed can be misused. It is better to get the same verified from a lawyer to avoid any dispute later.

How to avoid them:

Information and knowledge is the key to avoid any property related frauds. Some steps can be:

To verify the Credentials of the developer/builder:

If the builder/company is reputed, it can help to ensure that necessary approvals have been taken and promises made are not fake. Possession will not be delayed as the developer has maintained a good track record.

Checking the revenue records:

There is a mention of the lien/mortgage over the property in the revenue records. The same can be verified to ensure that property is free from encumbrances and title is clear.

Buying a resale property:

Collect the encumbrance certificate from the office of the Sub Registrar as it helps to verify that the title is clear. EC also contains the name of the previous owner. Also, check the tax payslips. Try to verify that all dues have been paid.

Read More: How to file a partition suit for a property in India

Buying a house in a society:

Check that the society is registered and there is a resident welfare association in place.

Buying a house from a builder:  

It is better to check that the project is registered with RERA. It helps to ascertain that all necessary approvals are in place and construction is as per norms. Moreover, possession will be granted as per promise.

From Seller’s point of view certain precautions are:

  • Buyers generally ask for original ownership documents. Sellers must possess the same
  • Seller must have Approved building plan or occupation certificate from the local authorities
  • Sellers must ascertain the identity of the buyers especially if the buyer is executing the conveyance deed using a power of attorney
  • Proper valuation of the property to quote the correct price

Taking legal advice:

Property transactions are complex. To avoid the occurrence of fraud, the parties must take legal advice and ensure proper documentation.

 Investment in the property must be taken seriously. The casual approach may land you in trouble.

Property law in India for daughters

Property law in India for daughters

The property laws for daughters and sons were different until the Hindu Succession Act, 1956, but were amended in 2005. Earlier, the sons had complete power over the father’s property. Daughters enjoyed the property right only till they got married. After marriage, a daughter was considered a part of her husband’s family.

Hindu Undivided Family (HUF)

Under the Hindu law, a HUF is a group including more than one person, all lineal descendants of a common predecessor/ancestor. The term HUF is supposed to apply to by people of Hindu, Jain, Buddhist, or Sikh faith. Currently, the laws keep the daughters in consideration and take care of their interests too.

Laws favouring daughters in their fathers’ properties:

Daughters’ rights in Hindu Succession Act, 2005

  • Earlier when a daughter got married, she discontinued being part of her father’s HUF which was seen by many as curtailing women’s property rights.
  • On 9/9/2005, the Hindu Succession Act, 1956, which governs the transference of property among Hindus, was altered.
  • According to the above Act, every daughter, whether married or unmarried, is now considered a member of her father’s HUF. She can even be appointed as ‘karta’/manager of father’s HUF property.
  • The amendment now provides for such laws that give daughters the same rights, duties, disabilities and liabilities that were earlier limited to sons.
  • However, a daughter can avail the benefits granted by the amendment only if her father passed away after 9/9 2005.
  • Moreover, the daughter is eligible to be a co-sharer mainly if the father and the daughter were alive on 9/9/ 2005.
  • Equal right to be coparceners
  • A coparcenary includes the eldest member of a family and three generations.
  • Earlier, it was said to include a son, father, a grandfather, and a great-grandfather.
  • Now women of the family can be a coparcener as well.
  • The coparceners obtain a right by birth over the coparcenary property.
  • A member of the coparcenary can further sell his /her share in the coparcenary to a third party.
  • A coparcener can file a suit asking partition of the coparcenary property but not a member.
  • Thus, a daughter, as a coparcener, can now demand the partition of her father’s property/business/house.

Muslim Law

Quranic laws of inheritance are extraordinarily specific. As per Muslim Law, daughters have right to maintenance and shelter in their parent’s house till they get married. Under Muslim law, both Sunni and Shia, a daughter is entitled to succeed to the property of the parents, yet there are customs and statutes, the operation of which excludes a daughter from inheritance. Such customs and statutes are treated as valid and daughters as non-existent at the time of opening of the succession.

Christian Law

According to Christian Law, a daughter inherits equally irrespective of the fact whether she has siblings or not. She also has the complete right to the personal property upon attaining majority.