Property Fraud: How to Identify Fake Registrations While Buying a Home or Land

Avoid scams with simple checks before investing in property

Buying a house, flat, or piece of land is one of the biggest financial decisions in a person’s life. For many, it represents years of hard work, savings, and dreams of security. Unfortunately, property fraud has become alarmingly common in India and abroad. Every other day, news reports highlight shocking cases where the same piece of land or house is sold to multiple buyers.

In such cases, the victims not only lose their money but also face long legal battles to reclaim their rights. The harsh truth is that once the fraud is done, the only remedy is to fight in court — a process that is expensive, time-consuming, and emotionally draining.

This is why it is critical to take precautions before buying any property. A little awareness and due diligence can protect you from massive financial loss.

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Why Does Property Fraud Happen?

Property fraud occurs because many buyers assume that a registered sale deed (registry) is the ultimate proof of ownership. While registration is an important legal step, it alone does not guarantee that the property is free from disputes.

Here are some common reasons why fraud occurs:

1. Multiple Registrations on the Same Property
   Unscrupulous builders or landowners sell the same piece of land to different people. They prepare convincing documents, take money from each buyer, and vanish before the fraud is discovered.

2. Fake or Forged Documents
   Fraudsters sometimes forge signatures, create duplicate property papers, or manipulate government records to make a property look clean.

3. Ignorance of Buyers
   Many buyers do not check the legal history of the property. They rely solely on the builder’s or broker’s assurances without cross-verifying documents.

4. Weak Verification by Authorities
   In some regions, loopholes in the registration system allow fraudulent practices to go unnoticed until disputes arise.

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Real Examples of Common Frauds

• A builder sells the same flat to 10–15 people with convincing agreements and receipts. When construction is delayed and buyers demand possession, the fraud comes to light.

• Landowners create fake sale deeds of plots already mortgaged to banks. Buyers later find out that the land was never free to sell.

• Properties under litigation are sold to unsuspecting buyers because they failed to check court cases linked to the land.

Such scams are cleverly designed, making it difficult for a normal person to detect them without proper knowledge.

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How Can a Property Have 2–3 Registrations?

To understand this, let’s look at how registrations work.

• In villages, land records are maintained through revenue offices and gram panchayats.

• In cities, sub-registrar offices handle registrations of plots, flats, and houses.

Fraudsters exploit these systems by either registering the same property multiple times in different names or by selling subdivided plots without proper approvals.

The problem is more common in cities, where builders buy large parcels of land, divide them into small plots, and sell them without proper clearance. Once a few buyers fall into the trap, the scam snowballs.

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Essential Checks Before Buying Any Property

Now let’s look at practical steps that every buyer should take to avoid becoming a victim.

1. Verify the Title of the Property

• The seller must have a clear and marketable title to the property.

• Ask for previous sale deeds to confirm the ownership chain.

• Ensure that the person selling the property is legally authorized (especially in the case of inherited or joint property).

2. Demand an Encumbrance Certificate (EC)

• The EC is issued by the sub-registrar’s office.

• It shows whether the property has any loans, mortgages, or legal disputes.

• If the property is already pledged to a bank, it will be reflected in the EC.

This is one of the simplest ways to identify red flags.

3. Check Land Use and Approvals

• In cities, ensure that the property has been approved by the local development authority or municipal corporation.

• Agricultural land cannot always be converted into residential plots. Verify conversion approvals before purchasing.

4. Take Title Insurance

• Title insurance is a form of property insurance that protects buyers from financial loss due to defects in ownership.

• If someone challenges your ownership later, the insurance company will cover your loss.

Though not very popular in India yet, it is a smart safeguard for large investments.

5. Bank Loan Verification

• If you are planning to take a home loan, consider it a blessing in disguise.

• Banks conduct strict legal verification before approving loans. They check for disputes, ownership, and legality of the property.

• If a reputed bank approves your loan for a property, it is a good sign that the property is legally sound.

6. Physical Site Visit

• Visit the property personally to check for encroachments or disputes.

• Speak to neighbors — they often know if the land or house has been sold multiple times or is under dispute.

7. Cross-Check with Government Records

• Use online property portals provided by state governments. Many states now have digital land records available.

• Check mutation records, survey numbers, and tax receipts.

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Common Red Flags You Should Not Ignore

• The seller is in a hurry to close the deal and offers huge discounts.

• The broker or builder avoids showing original documents.

• The property price is much lower than the market rate.

• The property has been recently transferred multiple times.

• Sellers refuse to sign indemnity bonds or give written guarantees.

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Legal Precautions You Must Take

1. Hire a Property Lawyer
   A lawyer specializing in property law can examine documents more effectively than a layperson.

2. Execute a Proper Sale Agreement
   Always draft a registered agreement before making large payments. Avoid “cash deals” or unregistered agreements.

3. Get an Indemnity Bond from the Seller
   This ensures that if any dispute arises later, the seller will be legally responsible for compensation.

4. Pay via Bank Transactions
   Avoid giving cash. Online transfers or cheques create a record of payment, which is useful in legal disputes.

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How Courts View Property Fraud Cases

Unfortunately, once fraud has occurred, buyers usually have no option but to approach the court. The process involves:

• Filing a civil case to claim ownership rights.

• Filing a criminal complaint against the fraudster.

• Presenting all documents and payment records as evidence.

The process may take years, which is why prevention is far better than cure.

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Role of Technology in Preventing Fraud

The government is taking steps to reduce fraud through digitization of land records. Online portals now allow buyers to:

• View mutation details.

• Check whether land is government-owned, agricultural, or private.

• Access maps and survey numbers.

In some states, blockchain technology is being tested to make land records tamper-proof. Once fully implemented, this will drastically reduce fraudulent registrations.

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Expert Tips for Safe Property Buying

• Never rely only on the builder’s word — verify independently.

• Avoid investing in unapproved layouts.

• Keep copies of all communication, receipts, and agreements.

• Don’t let emotions or urgency push you into a quick decision.

• If something looks too good to be true, it probably is.

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Conclusion

Property fraud is a growing menace, but it is not unstoppable. With awareness, careful verification, and the right legal safeguards, you can protect yourself from being cheated.

Remember:

• Registration is important, but not enough.

• Always check encumbrance certificates, ownership history, and approvals.

• Take professional help if required.

Buying a home is a dream — don’t let fraudsters turn it into a nightmare. Be alert, stay informed, and make your investment secure.