Property frauds: How to avoid being the victim of property scams

Kerala’s real estate is hot property now. But as real estate market is getting hotter, property frauds are also becoming common. While investing in property, what are the basic things that you need to keep in mind? Here are a few tips from Keral.com.

A couple in Queensland attended a free seminar on property investment from where they got the contact details of a ‘recommended’ agent. They contacted the agent and purchased the property on which weekly rental income of USD450 was guaranteed. Today, the couple is stuck with an un-disposable property which gives them hardly USD370 a week. The agent who promised the returns is nowhere to be seen.

So what was the fundamental mistake the Queensland couple made? A.) They signed the contract without getting a written guarantee from the agent. B.) They did not stop to verify the agent’s credibility through other sources C.) They did not check out the innate flaws in the property they purchased.

Rule number one of any property purchase is to identify the elements involved in the deal. The elements will mainly be the Agent, the current Owner and the Property in question.

Now that the elements are identified, verify them one by one. Is the agent/owner credible and recommended by people you know? Is the property in good condition? Note to book, as a thumb rule, you must avoid any property that is landlocked or located right by the main road.

Your next step should be to study, study and study. Learn the history of the property. Was the property under any particular dispute? Is the owner the sole authority of the property or are there others involved? If yes, what is their stand on selling the property? Is there any interest shown by the government on the property? Is the price being offered to you the going price in the locality? These are some of the things which you may need to investigate on.

Do not be rushed until you have verified all the facts and do not sign any contracts. All the agreements that require your signature should be signed only after the crucial documents of ownership have been produced before you. And no contract should be signed without taking some time out to read and comprehend it fully or probably even run it though your attorney.

Also, do not give a deposit unless you have no other way. A lot of scams occur where deposits are collected by the agents from various investors and then they abscond with the collected amount. For every deposit that has to be ‘compulsorily’ made, get a receipt with a stamp and a seal.
Beware of the Power of Attorney scam. The person acting as the middleman may be collecting too heavy a sum from you as deposit. For property purchase in the form of land, it helps to have a surveyor measure out the land and confirm its dimensions.

So these are some simple rules which can help you avoid being the victim of property frauds. Additionally, the NRIs may find it useful to visit the RBI website and check out the rules and regulations in place for non residents to purchase property in India. And remember, if anything is offered for free (even advice) you might want to think twice as to why it is being given away for free!

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