5 Common Real Estate Scams Targeting NRIs (And How to Avoid Them)
The Direct Answer
The most common scam is "The Double Sale", where a developer sells the same flat to two people. The fix? Ensure the Agreement for Sale is Registered (not just notarized) immediately. The second most frequent is "Squatting", where a caretaker refuses to leave. The fix? Never let a caretaker stay without a registered Leave & License agreement, and never for more than 11 months at a stretch.
The 'Cash Deal' Trap
If a seller insists on a large "Cash Component" (Black Money) for a discount, walk away. NRIs have no way to generate cash legally in India. Participating in this makes you liable under the Benami Transactions Act, which includes confiscation of the property.
The Scam Index
1. The "Soft Launch" Scam
The Pitch: "Invest before official launch at 20% discount." The Reality: The builder has no approvals. They are using your money to buy the land. If approvals fail, your money is stuck for 5 years. The Fix: Ask for the RERA Number. No RERA = No Deal.
2. The GPS (General Power of Attorney) Fraud
The Pitch: "Give me GPA to manage the property." The Reality: The holder sells the property to a third party without telling you. The Fix: Use a Specific POA, and strictly exclude "Sale" powers unless absolutely necessary.
3. The Assured Return Scam
The Pitch: "Buy this shop, we guarantee 12% rental return until possession." The Reality: They pay you back your own capital for 12 months, then stop. The project stalls. The Fix: Real estate return comes from Rent or Appreciation. "Guaranteed Return" is a financial product disguised as real estate. It's unregulated and often a Ponzi scheme.
Kanav Arora
Real Estate Investor
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