Property Fraud Alert: Major Red Flags That Signal a Scam

A recent case linked to DLF Camellias in Gurugram has brought property fraud back into focus. It has once again highlighted how even premium real estate buyers can fall victim to property fraud. As per the media reports, a woman was duped of ₹12.04 crore after being convinced to buy a non-existent luxury flat, using forged sale certificates and auction receipts.

This case is a reminder that property scams are becoming more complex and widespread. Buying a home, which is often a once-in-a-lifetime decision, can quickly turn into a nightmare when buyers fall victim to such property fraud. Attractive deals, limited-period offers, and false assurances often push people into rushed decisions without proper verification. In many cases, buyers realise the fraud only after making payments, leading to major financial losses and legal disputes.

Common property frauds buyers fall for  

Many property scams can be avoided by paying attention to small but critical details. The points below highlight the most common types of fraud every property buyer should watch out for.

1. Too good to be true deals

Exceptionally low-priced properties in premium locations are a common trap for buyers. But, if it seems too good to be true, it most likely is. If a property is being sold at an unusually low price, which is far below the market value, it should raise concerns. Such low prices often mean ownership disputes, legal complications, or forged documents.

Red Flags

• Promises of hot deals if you commit today.
• Offers quoting unrealistic future returns.

Tip: Cross-check prices of similar properties in the area with verified listings from top real estate platforms or agents before considering a deal.

2. Fake RERA registration

The Real Estate (Regulation & Development) Act (RERA), 2016, was introduced to protect buyers in India. Under the Act, all legal projects must be registered with the state authority. 

Scammers often use false or forged RERA registration numbers, or they may quote registration details of a different project altogether. Since homebuyers rely on RERA as a mark of trust, they tend to skip other checks. In reality, such projects may not have approvals or face legal issues and delays. An unverifiable RERA registration is one of the clearest signs of scams.

Red Flags

• The agent or builder can’t provide a RERA number.
• The RERA registration details don’t match the official records.

Tip: Always check and confirm the registration number on the official portal of RERA.

3. Pressure to close the deal “today”

Scammers often pressurise buyers with their hard-selling tactics, such as “pay now or lose the deal”. Genuine sellers and agents do not rush buyers, given that it’s a huge decision for a person.

Red Flags

Statements or messages like:

• “This price expires today!”
• “Another buyer is ready to pay cash!”

Tip: Legitimate agents and sellers won’t push a buyer for immediate or rushed payment. Take an ample amount of time for verifying documents, checking approvals or consulting a lawyer.

4. Forged property documents

Fraudsters use forged or manipulated documents to fool the buyers. In many cases, scammers change names, dates, or signatures on actual documents, or use fake stamps and seals to make them appear authentic. They also use forged sale documents and bank auction receipts. These fake documents are used to prove ownership or hide legal disputes.

Forged documents can be very difficult to notice for an untrained eye. Since many buyers are unfamiliar with legal paperwork, such fraud often goes unnoticed.

Red Flags

• The seller avoids showing original documents.
• Documents contain inconsistencies in data.
• The property changed hands many times in a short period.

Tip: Always cross-check the documents with the local sub-registrar office and digital land records. A buyer must get the following documents verified through a property lawyer while closing a property deal:

• Title Deed
• Encumbrance Certificate
• Sale Agreement
• Approvals and RERA Registration
• NOCs and Building Plan Approvals

5. Fake or misleading online Ads & listings

With online real estate platforms and social media marketing, buyers today research localities and even compare prices online. These days, scammers create attractive listings using stolen photos, false location details, and heavily underpriced rates to grab attention. In many cases, the property shown in the ads does not exist, is already sold. It may also be completely different from what is being shown.

Once a buyer is interested, they are pressurised to pay a token amount, site visit fee, or booking advance for physical verification. Once the amount is paid, the scammer usually disappears.

Red Flags

• Show stunning properties at low prices.
• Claim approvals they don’t have.
• Use stolen or overly edited images.
• The seller avoids in-person meetings.
• Asks for booking advance or site visit fee.

Tip: Always confirm the listing, builder credentials and official land records through RERA. Do check about the property on other reliable platforms as well.

6. Use of power of attorney for “NRI” seller

One of the most common ways to dupe buyers is to use the Power of Attorney (PoA) to sell property. The fraudster will act as a representative of an NRI seller and will sell the property without the true owner’s consent. There have been numerous fraud cases where properties have been sold to buyers using fake PoA documents.

As per the Supreme Court of India, a Power of Attorney (POA) alone is not a legal document to sell property. A registered Sale Deed is mandatory to transfer property ownership, with a POA only authorising someone to execute that deed on the owner's behalf.

Red Flags

• The agent is unable to provide a registered sale deed.
• No communication with the owner.
• Unclear or questionable Power of Attorney.
• Transactions are handled entirely through a third party.
• Pressure for quick payments.
• Requests for payments to personal or overseas accounts.

Tip: Ask the agent to provide the registered sale deed. Conduct a full title check through a property lawyer. Also, verify that the Power of Attorney is legally valid and has been executed and attested by the Indian Embassy.

What to Do If You Suspect a Property Scam

It is important to be alert while buying a property. Here are the steps to follow if property fraud is suspected:

• Stop Payments Immediately: Stop all payments until and unless the verification is done from your end.
• Verify Documents Thoroughly: Re-check all documentation related to properties, ownership, formalities, and RERA registration details.
• Get Legal Expert: Take the assistance of a competent property lawyer to identify the problems.
• File Complaint: File a complaint at RERA if the property comes under the RERA authority. Also, file a complaint at the consumer forum or police station if fraud is suspected.
• Avoid Confrontation Alone: Nobody should confront the seller alone. Scammers may change their behaviour and become uncooperative, leading to further complications in the case. One should always be in touch with their lawyer and act accordingly.

Tips to Avoid Property Scams

Property scams can easily be avoided by proper knowledge and verification. Here are a few tips to help buyers avoid such scams:

• Check Ownership & Title Papers: Verify the owner has clear and marketable ownership rights of the property being sold. Also, verify the same from the sub registrar's office.
• Check for Registration Under RERA: Verify registration of both the project and the broker with the concerned state authority for RERA.
• Refrain from Making Hastened Decisions: Do not fall prey to pressure tactics or limited-time offers. Allow sufficient time to review documents.
• Engage a Property Lawyer: Attorneys have expertise that can point out some issues which the buyer may overlook.
• Refrain from Using Cash: As a buyer, one should avoid using cash. Use bank transfers for the payment. It is advisable to keep the receipts for all the payments.
• Go and See the Property: It is a necessity for the buyer to visit the site and see the house personally.
• Be Cautious with Overseas Sellers: When it comes to a seller who permanently resides overseas, extra caution is needed. Always verify the Power of Attorney and the identity of the owner.

Frequently Asked Questions