Frauds in real estate are very common as a large amount of money is involved. Many builders cheat innocent buyers of their hard earned money by employing various methods. So, it is very important for homebuyers to be careful while investing their money to buy a dream home. In this blog, we will discuss various techniques used by builders to cheat home buyers.
1. Fake promises by builders
Fake promises by builders to homebuyers, is one of the common frauds in real estate. To persuade homebuyers invest their money in the project, builders make a lot of fake promises. Builders make promises like homebuyers will get possession of the property within a certain period of time and they say if they don't get possession, 12% returns will be paid on the money invested by them. There are also cases where homebuyers asked for the returns, and builders gave them cheques which bounced.
2. Title fraud
Title fraud is one of the most common ways, builders cheat homebuyers. Even individual sellers employ this technique to make money. Under this fraud, sellers create fake title deeds and pretend to be the owners of the property. Title fraud is very common on a disputed property, property which is vacant for a long time or whose owner stays in a foreign country for a long time. After creating the fake title deeds, sellers sell the property to innocent buyers. By the time the buyer gets to know he is cheated, the fraudster would have disappeared. So make sure to do proper research, before investing all your money to buy your dream home.
3. Delayed project
Another problem faced by homebuyers is a delay in the completion of the project. Builders simply give reasons like they are waiting for certain approvals or there is a shortage of raw materials, but this isn’t true. There are many projects in India, which are still under construction for the past several years. Builders usually do this because they want the project to be completely booked or to divert money from one of their projects to another. This kind of cheating by builders has caused a lot of problem to several homebuyers.
4. Changes in the approved plan
In some cases, when the project is completed, there will be a lot of variation when compared to the approved plan. These variations may be in terms of common area. This will cause a problem to buyers as they must compromise on the facilities, even though they have paid additional amounts for the same.
5. Delayed Approvals
In some cases, builders delay various approvals, even if the project is complete. These include approval for an electricity connection, water connection and so on. In such cases, even if the project is ready for possession, it is of no use without basic facilities.
6. Rental yield trap
Many builders cheat buyers by promising fixed rental income from the house. Buyers assume that they will get good rental income from the house and make a purchase without doing proper research. After receiving possession of the property, buyers find it difficult to rent it out.