What Are the Key Points to Consider Before Sale Deed Registration?

Introduction

Many Indian property laws are complex and confusing, making them vulnerable to fraudsters. Property fraud has increased in India due to an increase in demand for properties, an increase in the number of real estate transactions, and a lack of awareness among buyers. Fraudsters exploit this vulnerability, often using fraudulent means to acquire properties or defraud buyers. This blog post discusses the dark side of Indian property laws and illustrates various types of property-related frauds with case laws.

Documents that have been forged:

One of the most common types of property-related fraud involves forged documents. Fraudsters often create fake documents, such as title deeds, sale agreements, and power of attorney documents, to appear as if they own the property. Upon selling the property to unsuspecting buyers, the real owner appears, leaving the buyers in legal trouble.

In 2021, a woman sold a property to a buyer that she did not own. The Bombay High Court heard the case in 2021. To appear as if she owned the property, the woman created a fake power of attorney and forged documents. According to the court, the woman must repay the buyer's money.

Agrarian grabbing:

Land grabbing is another type of property-related fraud that occurs in India. Land grabbers often use force or intimidation to acquire the property of another individual. They may use fake documents or bribe officials to accomplish their objective.

A case was heard by the Madras High Court in 2020 in which a builder constructed a building on government-owned land. To obtain the land, the builder created false documents and bribed officials. According to the court, the builder must demolish the building and return the land.

Transactions on a Benami basis:

The Benami transaction is an agreement in which one party owns property, but another pays for it. Benami transactions are illegal under Indian law and are frequently used to evade taxes or hide unlawful funds.

Karnataka's Income Tax Department raided the properties of a prominent politician in 2020. Benami transactions were found by the department, where the politician purchased properties under the names of his family members and friends to evade taxes. The politician was charged with tax evasion and benami transactions.

Disputes over property titles:

Conflicts over property ownership often arise when the property has changed hands several times or when there is an inheritance dispute.

The Supreme Court heard a case in 2020 in which two brothers fought over the ownership of a property. Although the brothers had inherited the property from their father, there was no clear record of the ownership of the property. Having been able to demonstrate that he had paid for the property and had lived there for a long time, the court ruled in favor of the brother.

Property misrepresentation:

The term "property misrepresentation" refers to a seller intentionally concealing or misrepresenting defects in a property to a buyer.

A case was heard in 2020 by the National Consumer Disputes Redressal Commission (NCDRC), which involved a buyer purchasing a flat based on false promises made by the builder. In an attempt to compensate the buyer for the cost of these amenities, the NCDRC ordered the builder to provide amenities such as a swimming pool and gym, which were not provided by the builder.

Conclusion:

Buying properties in India can be fraught with fraud, so buyers should be cautious when purchasing properties. Buyers should verify the authenticity of properties before purchasing them. The Buyer needs to be extremely vigilant as these frauds can include title fraud, encroachment fraud, selling a property with a disputed title, unauthorized construction, property misrepresentation, and much more. The prevention of property fraud requires due diligence, proper documentation, and clarity. The best course of action is to seek legal advice before entering into any property transaction to protect your interests.