Note these five real estate scams before investing

The real estate sector in our country has a good growth rate. Given its competitive nature, many entities within this field are trustworthy and provide excellent customer service. However, investors should remain vigilant as there are potential risks involved. Many people fall victim to fraud in this sector due to inadequate research and preparation. With the advent of the Real Estate Regulatory Authority (RERA), a more effective monitoring and complaint redressal system is possible. Let's look at some of the important things that prospective investors in the real estate market should be aware of.

Beware of false promises
As competition within the real estate industry intensifies, developers are adopting various strategies to attract the maximum number of people at the onset of each project. This approach also serves as a means to secure funding for the completion of the project. Many developers attract investors through misleading advertisements. A notable example involves a real estate developer in Gurugram who deceived 700 investors by promising a 12 per cent return on their investment upon project completion. Through this scheme, the developer amassed Rs 1,000 crore from the investors.

'Fake' promise of getting money for rent
Another method by which people are deceived is by misleading individuals by guaranteeing substantial rental income from the property to facilitate real estate transactions. To further mislead potential investors, fraudulent listings labelled as 'previously rented' are also promoted. Many individuals who accept these claims without conducting thorough research often find themselves in difficult situations when they are unable to secure tenants and recover their investments.

Delaying projects intentionally
It is also important to be cautious of potential delays in project completion, as builders may take longer than initially promised and may become unresponsive. This is a trend where builders hold investors until they get the required number of investors. In some cases, funds collected for one project may be redirected to another, resulting in extended timelines for the original project. Numerous investors find themselves waiting for the completion of the projects they have invested in, holding only purchase agreements as evidence of their commitment.

Scam in sale deeds
This is a scam perpetrated by both individual property sellers and builders. They deceive by creating fake documents of vacant or disputed properties. By the time the buyers become aware of the situation, the perpetrators would have fled the country with the funds they obtained. There have also been cases where individuals who reserved a house prior to construction were provided with a different property than what was stipulated in the contract once the building was completed.

Delay in receiving approval for essential facilities
Another way in which people are scammed is when purchasers face challenges in securing necessary approvals for essential services following the completion of construction and acquisition of the property. Delays in obtaining approval for electricity and water connections are a major concern for investors. If it is discovered after the contract is signed or after the completion of the building that the plot, land use, and floor area are not legally compliant, the property owners will encounter significant difficulties.