Real Estate Frauds and How to Avoid Them

Posted 2025-07-07 09:01:57

Real estate is one of the most lucrative sectors, but it also attracts scammers looking to exploit buyers, sellers, and investors. Whether you’re purchasing your first home, investing in property, or renting, you must be aware of potential frauds that could cost you your hard-earned money.

In this blog, we’ll explore the most common real estate frauds and, more importantly, how to avoid them.

⚠️ Common Real Estate Frauds

1. Title Fraud

Scammers may forge documents to transfer ownership of a property to themselves or a third party. You may lose your rights to the property if someone else illegally registers it under their name.

How to Avoid:

Always check the property’s title deed through the official land records office.

Get the property documents verified by a lawyer.

Purchase title insurance if available.

2. Fake Listings

Fraudsters post fake rental or sale listings using pictures of real homes. They often demand upfront payments to “secure” the property.

How to Avoid:

Never pay before visiting the property.

Use verified property portals and agents.

Do a reverse image search to ensure the listing is genuine.

3. Builder/Developer Frauds

Some developers delay possession, change the project layout, or even vanish after collecting booking amounts.

How to Avoid:

Choose RERA-registered projects and check builder credentials.

Ask for a written agreement before making any payment.

Avoid cash transactions and ensure all payments are receipted.

4. Power of Attorney (PoA) Scams

Fraudsters may misuse a fake or expired Power of Attorney to illegally sell a property.

How to Avoid:

Verify the validity of the PoA with a legal expert.

Ensure the PoA is registered and not just notarized.

Meet the actual property owner if possible.

5. Loan Frauds

In some cases, properties are mortgaged multiple times to different lenders. Buyers unaware of this end up in legal trouble.

How to Avoid:

Get a No Dues Certificate from banks if the seller had a loan.

Conduct due diligence through a legal consultant.

Check for encumbrances through official records.

✅ Tips to Protect Yourself from Real Estate Frauds

Work with Verified Agents
Choose agents registered with local authorities or RERA. Ask for ID proof and registration numbers.

Legal Due Diligence
Always hire a real estate lawyer to verify property papers, titles, and legal clearances.

Cross-Check Documents
Verify sale deed, encumbrance certificate, tax receipts, and building plan approvals.

Avoid Cash Deals
Always make payments via bank transfers or cheques. Cash deals are untraceable and illegal above certain limits.

Check RERA Registration
Visit https://rera.gov.in (or the respective state RERA portal) to check if the project and developer are officially registered.

Record Every Communication
Save every email, receipt, and document related to the transaction. This can protect you in case of a dispute.

What to Do If You’re a Victim?

File a police complaint under sections related to fraud and cheating.

Approach consumer courts or the Real Estate Regulatory Authority (RERA).

Consult a lawyer immediately to understand your legal options.

Conclusion

Real estate frauds can be devastating, but awareness is your best defense. Don’t rush into property transactions, no matter how attractive the deal seems. Take your time, verify all documents, work with trusted professionals, and never skip due diligence.