Frauds dim Gurgaon’s real estate sheen

Proximity to the international airport and the national capital have made Gurgaon a real estate hot spot offering quick returns to developers. But this boon came with some banes — several developers, land owners and brokers ended up indulging in fraudulent practices.

In the last decade, Gurgaon’s burgeoning real estate sector has helped many fill their coffers. The downside of it has been that thousands of apartment buyers and investors have fallen prey to numerous property frauds — projects delayed by years, apartments are sold without licences and financial products are sold in the garb of real estate projects.

Proximity to the international airport and the national capital have made Gurgaon a real estate hot spot offering quick returns to developers. (Parveen Kumar/HT Photo)

Proximity to the international airport and the national capital have made Gurgaon a real estate hot spot offering quick returns to developers. But this boon came with some banes — several developers, land owners and brokers ended up indulging in fraudulent practices.

The frauds include delay in delivery of projects, diversion of funds allotted for projects to create land banks, sale of projects in which licences have not been procured and change in the specification of flats at the time of delivery, among others.

Experts say this is one of the major reasons, apart from the economic slowdown, that has stolen the sheen from Gurgaon’s real estate sector.

One has to think twice before investing in Gurgaon as property fraud cases in the city are making headlines almost every other day.

Police records show that the number of cases has been consistently increasing since 2010, when the department registered 130 cases. This year, the department has registered 623 cases till October 27.

In the last five years, the police has seen a 35% increase in fraud — from 140 cases in 2011, the number rose to 216 in 2012 and 257 in 2013. Last year, 439 cases were registered.

Even prominent builders have property fraud cases against them.

According to the police, the modus operandi in most cases is the same — fraudsters sell projects that don’t have licences as the intention is to cheat investors.

One such example is of Vighneshwara, which promised buyers high returns if they invested in their schemes. But the latter ended up in huge losses when the builder refused to keep to his promise.

“We receive several complaints of property fraud and in many cases we immediately take action and register the case. In case of technical issues, we send the case to EOW for investigation,” DCP (crime) Ved Prakash Godara said.

Godara also said on many occasions, fraudsters attempt to acquire ownership of a property either by using a forged document or by impersonating the registered owner.

“It is only after paying substantial installments that the victims realise that they are being cheated. Fifty-eight cases were registered in Gurgaon last year where buyers signed agreements when builders bought the land,” he said.

Meanwhile, experts have said there are a large number of such buyers in Gurgaon who face trouble in the absence of regulation and checks by the government. The district town and country planning department, in particular, has been lax in monitoring the real estate sector and has been accused of being part of the builder-government nexus.

However, under pressure from disgruntled buyers, the Haryana government has directed the Gurgaon district administration to set up a real estate arbitration council to hear their grievances.

The government has also constituted the Justice SN Dhingra Commission that has been probing scams in several New Gurgaon sectors. Recently, the commission had asked residents and buyers to share information of property fraud.