Beware! Real estate frauds on the prowl

Beware! Real estate frauds on the prowl
The Times of India

Bangalore: Watch out! Real estate frauds are on an upswing. If you are not careful, your life’s savings could be at risk.
Booming markets invariably bring with it unsavoury people, who try to make some quick money through illegal methods. This is precisely the state of the Bangalore’s property market today.

There are developers who sell the same piece of land to several customers, those who sell land without clear titles, those who construct without mandatory permissions from the authorities, those who violate building by-laws and those who flout sanctioned plans. Even advertisements that quote the Bangalore Development Authority (BDA) approval numbers are no guarantee that the approval has actually been obtained.

“We are worried about these developments. There are many fly-by-night operators and others in the unorganised sector who do such fraud,” says B.M. Jayeshankar, president of the Karnataka Ownership Apartments Promoters Association (KOAPA) and managing director of Adarsh Group. Girish Puravankara, director of Puravankara Projects, says when the market is good, anybody who has funds and some backing starts property developing. “Customers go to these players in the unorganised sector to save Rs 2 or 3 lakh. But this could be risky,” he says.

So what should you as a buyer do? First, check the developer’s credentials and track record, check how long they have been in the business and whether they have delivered good products. You can also visit the other properties built by the developer. If the developer is a KOAPA member, you can be reasonably sure about the safety of your investment. KOAPA, which has 64 members today, has a code of ethics, which the developers are obliged to follow.

Second — this is important if you are going to an unorganised sector player — check for yourself, the titles of the land and make sure the developer has obtained all approvals for the project or employ a lawyer for this purpose. Also, in the course of construction, make sure the developer is going as per the sanctioned plan.

There are developers who claim that the project has the approval of certain banks. Often such approvals come from a single branch of a bank and is not the result of any thorough scrutiny by the bank. Even banks are under pressure to disburse maximum amount of loans and consequently some of them skip scrutiny. So do your own scrutiny.