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.

How to file a partition suit for a property in India

how to file a partition suit for a property in india

Partition is a division of property among those who are entitled to the same. In case of property held jointly, if all the co-sharers decide mutually among themselves to divide the property and agree for specific share, there is partition by mutual consent. If there is a dispute, the parties file a suit for partition in a civil court.

Existence of a Right:

A person can claim a share if he has a right in the property. The right can be there:

  • As a legal heir
  • As a co-owner/co-sharer
  • Through any document conferring the share – Will, Gift Deed, Sale deed etc.

When the partition suit is filed, Court may fix an enquiry and appoint a Court Commissioner to ascertain the existence of the right of the party and its share in the suit property.

Read More: Division of property between brother and sister after father’s death

Process of filing a partition suit:

Partition suit is a civil suit, and the process of filing is the same as that of a civil lawsuit.

A. Drafting and filing of plaint – A plaint is nothing but a statement of facts of the case wherein the claimant explains and justifies his claim for the share in the property.

  • A plaint is drafted as per the formats applicable in a particular court. Generally, it is the same everywhere in India with a few differences in presentation.

B. Affixing the appropriate court fee – Requisite court fees must be deposited at the time of filing the plaint. It is essential to submit an accurate court fee. The court fee depends upon :

  • Nature of the case- If the parties are in joint possession of the suit property, the amount of the court fee is fixed. The court fee does not depend upon the market rate. If the party is not in  possession, the court fee is paid on his share as per the market rate.

The court fee structure varies from State to State.

Read More: Division of Property Among Daughters and Daughters-In-Law

C. Placing on record the relevant documents: The party in support of its claim submits the relevant documents. The documents can be-

  • Title deed – It is the primary document which confers the title to justify share in the joint property. It can be in original. If original not available, certified copy can be obtained.
  • Valuation of property- A certificate is issued by the Office of Sub Registrar confirming the value of the property as per the market rate.

Any other document can be filed, which establishes the right in the suit property or which fails the claim of the defendant.

The party filing the suit may or may not possess the original documents. Certified copy of the same can be obtained from the offices of concerned authorities.

Read More: Property rights of a wife after husband’s death

Who can file?

Any or all of the co-owners can file a partition suit. The co-owners can be legal heirs also if it is a family property. Anyone having a share in the property which is intended to be partitioned can file the suit.

Where to file?

A suit for partition is filed in a Civil Court having jurisdiction over the area where the property is located.  If there are several properties, the lawsuit can be filed in any one of the courts.

The partition suit results in a decree which ends the joint nature of the property. Court may order sale of the property and distribution of sale proceeds.

What property lawyers have to say to protect you against builders disputes

property lawyers protect you against builders disputes

One of the most frequent complaints that we receive from NRIs is their property disputes and claims against Builders. Whether it is false claims or unnecessary delays, NRIs often fall prey to the manipulative attitude of the property developers and seek legal advice from our property lawyers.

Our government is trying to create a transparent environment by bringing about certain changes. Black money, Benami Property, and Corruption are few parasites on which our government is focusing on and trying to eradicate them. Along with this, the authorities are seeking to attract investors so as to improve India’s infrastructure.

However, Real Estate remains one of the major sectors where NRIs face issues of corruption and false claims. These could be all kinds of issues related to property such as illegal possession, fake deals, delay in transfer of assets and much more – especially in the case of NRIs.

NRIs mainly face Property Issues in two cases:

  • When they invest in property in India
  • When they sell their assets located in India

When they invest in Property in India:

NRIs invest their money in real estate in India as an investment to earn returns or as security but many times face various challenges. One of the major issues that they face is Non-delivery of Possession on Time or Investing with wrong builders who delay project completion, causing significant financial loss to them. The Property Developers in India try to attract NRIs with fake claims of projects which are backed by false information, photos and videos. They take benefit of the fact that NRIs live overseas and can’t always be there to keep an eye on them and the development.  But the NRI can take precautions on his/her behalf and protect from such fraud builders.

  • Check the track record of the developer such as the projects completed by the builder in the past
  • Delivery of the said project on time
  • Transfer of title of the property without any issue
  • Criminal history of the developer if any
  • Quality of the previously delivered projects
  • Ensure that the seller owns the property and has the right to sell the same.
  • Check if the land falls under village survey or city survey.
  • If the land is under village part make sure it’s not an agricultural land because as per government rules NRIs cannot invest in Agricultural Land, Farmhouses, and Plantation Property.
  • If the land is under city part, the NRIs can invest in residential or commercial property without any hesitation.
  • Before buying the property, the investor should check the approved layout/plan of the concerned property along with the common space available to other buyers. The investment money also includes the cost of the common areas.
  • Sometimes at the time of investing the builder does not ask for the stamp duty and registration. In such a case the NRIs should request a declaration stating these are not applicable.

Once the investor has selected a suitable developer, he/she should with the help of a property lawyer study the agreement properly. It should be ensured that the agreement contains the:

  • delivery date
  • possession date
  • the contract amount
  • regular maintenance fees

Also, it is better to ensure that the development is as per state’s laws and bye-laws. The investor should ask for detailed drawings of structural details, electrical fittings, plumbing, drainage and water supply details for future reference. The investor should ask for Completion Certificate specifying that everything is as per the norms. One needs to ensure that all the signatures involved are proper. But one can use fingerprints to protect themselves from any fraud as it is a foolproof thing. Sometimes even with all the precautions, the NRIs may face the problem of delay in possession of property.

In such a case there is an excellent solution to the problem i.e. The Consumer Court. It has been set up in every state mainly to address the need of the consumers who have been given inadequate services. These are known as fast track courts. Here the NRIs can exercise their rights and hire a legal aid to file an application for the Developers for their wrong doings.

NRIs are not only entitled to receive their refund back but also to get a penalty, litigation cost, full interest, and damages from the developers. The NRI should be ready with following documents before filing the complaint application-

  • The complete record of communication with the builder
  • All the proof of payments made
  • The contract/agreement should be in his/her custody
  • The process of filling the complaint is very swift.

When they sell their assets located in India

Living overseas often restricts the person to travel to India to manage their property. In such a case they face problems of illegal possession, land grabbing, complete loss of assets due to lack of proper documents and much more.

But sometimes they face major issues when try to sell their assets located in India. They face fraud due to the lack of knowledge of their legal rights.

While selling their property, the NRIs should verify all the details of the buyer and take help of the property lawyers. The agreement should be made with the help of an attorney and contain all the information such as buyer’s name, seller’s name, the amount of contract, etc. and special focus should be put on the signatures involved.