The most common fraud while buying a house is this…
You meet the buyer, look at all the documents, verify ownership from conveyance deeds, inheritance documents, utility bills and are happy with the documentation…
You transfer the payment…
A few months later you randomly receive a legal notice asking to either vacate the property, or if it’s a piece of vacant land – saying that you do not have clear title or ownership of the land…
Why? Because some sibling of the seller has a share in it, which was not disclosed to you…
Or there were some dues of a government department which have not been paid by the seller and you need to pay a bill of a few lakhs to clear it…
Now you’re stuck… the property’s title is disputed… you can’t sell it, it gets stuck in court and all your money goes down the drain…
Now, very few people hire lawyers to do a thorough title check of the property…
And especially when you are buying a piece of land which is not anywhere in your city of familiarity, such scams are common…
To counter this, there is now an insurance called “Title Insurance”, by which an insurance company does a full check on the title of the property, and for a one time premium that is approx 0.5% of the property’s value…
You get an insurance that will cover any such claims that may come to you so that you don’t have a financial loss from such a transaction… it also covers legal fees to get your money back…
It’s definitely worth exploring.
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A Chartered Accountant with about 10 years of experience in areas of Tax Advisory, Startup Consulting, Fundraising, Audits, Deal Advisory, Business Modelling and contract CFO services.
Winner of the ISB Young Leader Award 2017 and the Best All Rounder, PGP Class of ’17, Sarthak has also been published about in the leading financial newspapers such as The Financial Express as possibly the youngest Indian to have completed the courses of CA, CS and CMA along with a graduate degree in Financial & Investment Analysis from University of Delhi, all by the age of 23 years.
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