15 Property Fraud in India and Steps to Avoid Them in 2025

With the increasing number of property purchases in India, the scope of property scams is also rising.

Buying a home is a significant financial and emotional milestone that represents security and stability. Yet, this aspirational journey is often fraught with risks, especially in India’s vibrant but complex real estate sector.

This article is a complete guide for homebuyers, highlighting the most common property scams in India and the legal measures available to protect your investment, so that buying a home becomes a safe and confident decision.

Property scams are not isolated events; they are often interconnected schemes that exploit systemic vulnerabilities and a buyer's trust. To protect your money, it’s important to understand how these scams work.

Below, we have listed 15 types of fraud in property. And, explained how they are carried out, what makes buyers fall for them, and how to protect yourself against these scams.

1. Title Fraud

Title fraud strikes at the very heart of ownership. In this type of real estate scams, fraudsters forge title deeds or powers of attorney to falsely claim ownership. They often target vacant properties and properties owned by NRIs or out-of-state residents. Once forged documents are prepared, the scammer sells the property and vanishes before the fraud is detected.

Tips to Protect Yourself from Title Fraud

• Always demand the original title deed/sale deed.
• Cross-check registration details at the sub-registrar’s office.
• Obtain an Encumbrance Certificate (EC) to confirm no mortgages or legal dues exist.

2. Multiple Sales Fraud

One of the oldest tricks in a property cheating case is selling the same property to multiple buyers. Since each buyer believes they are the rightful owner, disputes arise later, often leading to long legal battles and heavy financial losses.

Tips to Protect Yourself from Multiple Sales Fraud

• Check the property’s registration history to ensure it hasn’t been sold multiple times.
• Insist on a registered sale agreement before making any payment.
• Verify the seller’s identity and ownership through government records.

3. Encroachment Scam

This is one of the land scams that happens when part of the land being sold is illegally built on government land, forest area, or even someone else’s private property. Buyers may not realise it until authorities issue demolition notices or legal owners claim the land back.

Tips to Protect Yourself from Encroachment Scam

• Confirm land boundaries with official survey maps and municipal records.
• Avoid properties near government land, forest areas, or disputed zones.
• Hire a surveyor to physically measure and validate the plot.

4. Project Delays

One of the most common problems is inordinate project delays, where under-construction properties are not delivered on time. While some delays may have genuine causes, in many cases, the root reason is a deliberate diversion of funds. 

Builders collect money from investors and, instead of using it for construction, divert it to acquire more land or finance other ventures. This practice can leave projects stalled indefinitely, with buyers' money tied up for years.

Tips to Protect Yourself from Project Delay Scams

• Ask for approved building plans, completion certificate (CC), and occupancy certificate (OC).
• Ensure the builder’s track record includes on-time deliveries.
• Insist on a written agreement for all promises; avoid relying on verbal assurances.

5. Forced Cancellations

In a rising real estate market, some builders may deliberately provoke a “forced cancellation”. They find fault with a buyer's payments or documentation to create an excuse to cancel the booking, allowing them to resell the same unit at a significantly higher price.

Tips to Protect Yourself from Forced Cancellations

• Maintain all payment receipts and communication in writing.
• Ensure your agreement clearly defines cancellation terms and penalties.
• Avoid paying large amounts without a registered agreement.

6. Pre-launch Scams

Another fraud in property is the "pre-launch scam", where builders offer projects at a steep discount before securing all necessary government approvals. This exposes buyers to the risk of investing in a project that may never be built if the approvals are denied.

Tips to Protect Yourself from Pre-launch Scams

• Never invest in projects without all government approvals in place.
• Verify approvals like building plan sanction and land use clearance.
• Prefer projects listed on RERA for added security.

7. Online Listing Scams

With the rise of online property portals, fake listings have also become common. Scammers post attractive deals with low prices to lure buyers, collect advance payments or booking amounts, and then disappear without a trace.

Tips to Protect Yourself from Listing Scams

• Avoid paying any advance before physically inspecting the property.
• Verify the seller’s identity and ownership documents.
• Use trusted property portals and cross-check contact details.

8. Assured Return Schemes

Builders promise a high percentage of return (e.g., 12-15% per annum) until the project is handed over. While some builders provide post-dated cheques to legitimise the offer, these cheques often bounce, leaving investors with no returns and a project that remains incomplete.

Tips to Identify Assured Return Schemes

• Be cautious of unrealistic return promises; verify the builder’s financial health.
• Avoid schemes without written agreements and bank guarantees.
• Check if the project is RERA-registered and legally compliant.

9. Fraudulent Home Loan Schemes

Under these real estate scams, fraudsters forge documents to secure loans. In some cases, banks disburse large amounts directly to builders without proper checks. If the builder goes bankrupt, the buyer bears the financial burden.

Tips to Identify Home Loan Schemes

• Understand the loan disbursement process and avoid builder-controlled schemes.
• Verify bank approvals and ensure payments go directly to your account.
• Read all loan documents carefully before signing.

10. Deviation from Plans

Builders attract buyers with glossy brochures and promises of luxury features. But the actual building may look very different or lack those facilities. Sometimes, construction even happens illegally on restricted land, which can later face demolition.

Tips to Identify Deviation from Plans

• Compare approved building plans with actual construction progress.
• Include specifications and amenities in your agreement.
• Visit the site regularly to monitor compliance.

11. Benami Transactions

Benami transactions involve buying property in someone else’s name to hide the real owner’s identity, often for tax evasion or laundering black money. Such real estate scams are punishable under the Benami Transactions (Prohibition) Act. If caught, both the property and the invested money can be confiscated by the authorities.

Tips to Protect Yourself from Benami Transactions

• Avoid buying property in someone else’s name; it’s illegal under Indian law.
• Verify the seller’s PAN and Aadhaar to confirm identity.
• Ensure all payments are made through traceable banking channels.

12. Forged Deed Fraud

Fraudsters may use genuine documents but make small changes in names, dates, or property details. These forgeries are difficult to spot without a legal expert’s help, which is why professional document verification is so important.

Tips to Avoid Forged Deed Fraud

• Check for alterations in names, dates, or property details on documents.
• Validate documents at the Sub-Registrar’s office before signing.
• Engage a legal expert for thorough document scrutiny.

13. Rushed Sale Pressure

In this property scam, agents or sellers create a false sense of urgency, claiming limited availability or price hikes to push buyers into quick decisions. This tactic prevents proper due diligence and legal verification.

Tips to Protect Yourself from Rushed Sale Pressure

• Never commit under pressure; take time for due diligence.
• Verify all documents and approvals before paying.
• Walk away from deals that demand instant decisions.

14. Mortgage Scams

Fraudsters misrepresent property ownership or inflate valuations to secure loans fraudulently. Sometimes, the same property is mortgaged to multiple lenders without disclosure. 

Tips to Protect Yourself from Mortgage Scams

• Obtain an Encumbrance Certificate to check for existing loans.
• Confirm with banks if the property is mortgaged.
• Avoid properties with unclear financial history.

15. Rental Scams

Scammers post fake rental listings and demand advance deposits before showing the property. In some cases, they impersonate owners and rent out properties they don’t own.

Tips to Protect Yourself from Rental Scams

• Never pay large deposits before verifying ownership.
• Meet the owner in person and check the original documents.
• Sign a registered rental agreement for legal protection.

To make the abstract concepts of fraud tangible, it is helpful to evaluate real-life examples of property fraud cases that illustrate the scope and scale of these crimes.

The ₹14 Crore Nagpur Land Fraud | Year 1993 - 2023

Two individuals linked to a housing society defrauded buyers of ₹14 crore by selling 7.72 acres of land while owning only one acre.

They created a fake layout of 159 plots and sold them over decades without proper ownership documents.

This case highlights large-scale title fraud and selling land you don’t own.

The Builder-Bank Nexus in NCR | Year 2013 - 2019

A collusion between builders and banks left thousands of homebuyers paying loans for homes they never received in multiple locations in India.

The Supreme Court called it a “systematic fleecing,” stressing the need for buyer vigilance.

• Verify All Property Documents Thoroughly: Before buying, always check the original property papers like the title deed, encumbrance certificate (EC), and building approvals. A property lawyer can help trace the ownership history for 12–30 years, which protects you from forged or fake claims.
• Cross-check RERA Registration: Make sure your real estate agent and the property are registered with RERA by verifying their numbers on your state’s official RERA website. This step ensures the builder follows legal norms and prevents you from falling into pre-launch scams or unapproved projects.
• Avoid Cash Transactions or Shortcuts: Always make payments through bank channels like RTGS, NEFT, or cheques instead of cash. This creates a clear financial trail, gives you proof of payment, and protects you in case of disputes.
• Research the Builder and Agent: Spend time checking the builder’s track record, past delivery timelines, and customer reviews before committing. 
• Do a Physical Check of the Property: Never rely only on documents or online listings. Visit the property in person to confirm it exists, matches the paperwork, and is free from encroachments. 
• Take Professional Help: Hire a lawyer who will help you detect hidden clauses, forged papers, and compliance issues you might miss. This small investment can save you from massive financial and legal troubles later.
• Don’t Rush Decisions: Scammers often create urgency with “limited-time offers” or “last few units” tactics. So, take time to verify ownership, approvals, and financial terms before committing.

If you suspect property scams, you can take the following steps:

• Report to RERA: If you believe the builder or developer is involved in fraudulent practices, file a formal complaint with RERA through your state’s RERA portal.
• Approach the Consumer Court: You can also file a complaint in the Consumer Court under the Consumer Protection Act. 
• Inform the Police or Cyber Cell: In cases involving forgery, fake documents, or online fraud, immediately lodge an FIR with the local police or report to the Cyber Cell.
• Alert Your Bank: If you have made any payments related to the scam, notify your bank right away. They can help stop or reverse transactions and secure your account from further misuse.

Yes, there are several laws to protect buyers and owners from property fraud in India. The 5 most crucial property laws you should be aware of are as follows:

• The Real Estate (Regulation and Development) Act, 2016 (RERA): This law protects property buyers by making real estate transactions more transparent and fair. It requires builders to register their projects with a state authority and disclose all details like approvals, timelines, and layout plans. If they fail to deliver possession on time or provide false information in the advertisement of brochures, buyers can file complaints with RERA for a refund or compensation.
• Bharatiya Nyaya Sanhita, 2023 (BNS): BNS is India’s updated criminal law code that replaces the old Indian Penal Code. For property buyers, fraudulent property deeds, e.g., showing false sale amounts or hiding real ownership, can be reported under BNS Sections 318 and 323. Intentional deception in property transactions can lead to imprisonment for up to 7 years under this law.
• Registration Act, 1908: This Act governs the legal registration of property documents, ensuring their authenticity and enforceability. Under Section 17, sale deeds, leases over one year, and other property-related instruments must be registered to be legally valid.
• Transfer of Property Act, 1882: This Act defines how property can be legally transferred between living persons. It covers various modes of transfer such as sale, mortgage, lease, gift, and exchange and outlines the rights and obligations of both parties. If you suspect a transfer was made to cheat you, you can challenge it in court under this Act.
• Consumer Protection Act, 2019: This Act gives you a fast-track legal route to claim damages and enforce your rights as a consumer. Under this law, you can file complaints with Consumer Commissions for issues like false promises, poor construction, or delays. You can report misleading advertisements and seek compensation, refunds, or penalties for unfair practices.

The journey to homeownership, while filled with hope and excitement, must be approached with your eyes wide open. The threats posed by property fraud cases, from forged ownership documents to sophisticated financial schemes, are real and can result in significant financial and emotional distress. 

A thorough due diligence process that includes a deep dive into legal documents, background checks on all parties involved, and a physical site verification is your first line of defence to manage and mitigate the risks.