Property frauds: 4 checks that will keep you safe Any laxity in doing due diligence could cost you your entire life savings. Here is your user guide to buying a legally verified home
Often naive home buyers are tricked by scamsters who take advantage of the former's ignorance to dupe them of their hard-earned money. Buying a house is normally the biggest purchase a person makes in his lifetime. Therefore, any laxity in doing due diligence while buying the property could cost you your entire life savings.Here are four common ways property is sold fraudulently which you should be aware of.
When title deeds or revenue records are fabricated
It is imperative to check if the property you're buying has a clear title and is in the name of the seller whether it's an apartment, land or an independent house. Moreover, the original sale deed should have been registered. You should thoroughly cross-check the entire chain of documents. The chain starting with title deed which validates that the seller is the true owner of the property to sale deed, encumbrance certificate, property tax receipts, among other things.
"As one applies for the encumbrance certificate from the sub-registrar's office, the document should reflect the name of the owner," says lawyer Saravpreet Gurna, who practises in the Punjab and Haryana High Court. The encumbrance certificate certifies that the property has no dues. This means that the title of the property is clear and marketable. In addition, all the transactions related to the flat will be displayed on this certificate. A fake document quoting similar details as mentioned in the original sale deed could also be prepared. "Without relying on photocopies, it's advisable to check the original deed and get it examined by a lawyer," says Noida-based lawyer Atulay Nehra, who specialises in real estate litigations. He says many times a conman gets into sale agreements with different people simultaneously, fraudulently pocketing earnest money from all the deals.
Many cases have emerged in big cities where even though the flat is registered in the name of the owner, the owner may have given a power of attorney to a third party to deal with the property. It is important to check if the power of attorney holder has entered into any arrangement with any third party. Also, it is advisable to cross-check revenue records, such as in the government land revenue department, in situations where the title documents to support the ownership of an individual, is absent. "There have been cases where a property has been registered but mutation has not been done in the local municipal corporation office. It should be cross verified either online or in the revenue department office. Apart from that, making local enquries always come handy," adds Gurna.
"In recent years, many state governments have digitally recorded the revenue and land records, municipal records, and other records at the office of the sub-registrar. These digital documents are available online, at the websites of the relevant government departments. At the time of review of title documents, it is now a standard practice to also verify the records available online. If any mismatch is found between the documents physically available and the documents available online, then the possibility of fabrication cannot be ruled out," says Srinivas BR, Partner, DSK Legal.
When power of attorney is forged
Legal eagles advise against buying properties through power of attorney because there are good chances that the property being bought by you on power of attorney is a fake one. A conman prepares a fake power of attorney, based on which the sale is executed in favour of unsuspecting buyers. The modus operandi of the fraudster is to fabricate the title deed of the real owner and the seller claims that the original documents were lost. "In this scenario, it's important to get the power of attorney verified by the owner whose name is mentioned in the property papers Also, obtain an affidavit from the present owner stating that the originals have been lost, and once traced, will be handed over to the purchaser," says Gurna. He adds that a power of attorney is prone to frauds because the same property can be sold to different persons. "Many such cases have come to light where the real owner nominates more than one person for the specific power of attorney and all of them end up selling the property to different people," says Nehra. A registered PoA is considered safer than a simple notarized PoA. Adding a blanket indemnity clause in sale deed helps to protect buyer against future risk.
Srinivas adds that online litigation search can be conducted at the e-court website, although in a limited way, to ascertain pending or past litigation in connection with the property. "If any litigation is identified, investigation into the same will disclose past or ongoing issues which may relate to authenticity or hidden mortgages," he adds.
He adds that one must also obtain photocopies of the seller's PAN card and voter ID and get them verified.
When the mortgage is not cleared
Many cases have emerged where the seller has not cleared the mortgage before transferring the house. "The scam artiste avails of a home loan against the property, disposes of the property and vanishes into thin air. The person at the receiving end often has to fight a protracted legal battle to get his money back," says Nehra. Therefore, it's advisable to take a home loan to buy a property. "It's a simple way to check if the property is 'clean' as banks or financial institutions approve only legally cleared properties, which have the requisite documents. This helps buyers avoid getting trapped into a bad deal," says Gurna.
When succession certificate if fake
Here properties are sold based on fake legal heirship certificates. These kinds of frauds usually happen due to unavailability of original documents. Fraudsters usually give an advertisement stating the loss of the original document in a lesser-known daily. "Buying a property whose original title deed documents are not available is a very precarious situation. It's important that along with the succession certificate, the death certificate is also cross-verified either online or with the records of the issuing authority," says Gurna.
"It's very important to do due diligence with regards to the title of the property. Apart from thoroughly checking the title documents, the seller must give an advertisement in the newspaper inviting objections from the public regarding the transaction on the property. This will mitigate the possibility of fraud or concealment of issues," says Srinivas.
Nehra adds that it is increasingly getting difficult for scam artistes to defraud people based on fake property papers because everything is online. "In earlier times, when everything was done manually it was easier to forge papers. These days photographs and thumb impression on documents have made the job of conmen much difficult," he sums up.
Thus, it's important to tread carefully as scam artistes are always looking for an opportunity to take you for a ride.
This story originally appeared on: Muscle & Fitness - Author:Tax Cognition
