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Fake Papers

Rakesh Purohit - Real Estate Mentor
              Real estate is a big paper game. Every thing is in paper; if you have possession of or selling or buying any property, my friend you are inside World of Papers. You might hear of paper tiger that is nothing but a counterfeit; however this paper world is real and can destroy you if you are not moving cautiously. In my opinion, before venturing into any deal you must realize power of a paper.
              From fake proposal to fake registry, realty world is full of fake document. Fake receipts, fake agreement, fake possession, fake demand, fake will, fake approvals, fake sanctions, fake bankers cheque, fake demand draft, and so on; interestingly whenever I tell anyone about fake documents most of the people don’t take it seriously until they actually suffer because of their KNOW IT ALL attitude.
              I tell you a short but interesting example when a developer submitted incorrect layout plans (quoting wrong SHIZRA) in Development Authority for sanctions and got approvals from the same office those who actually drafted master plan of that particular area.
              I am sure you are not surprised from my illustration because you know level of corruption in society and will undeniably say, “No big deal, this is very much possible, anyone can get it done with the help of few links and money power”.
              Exactly! This is what I am trying you to recognize, forgery through documents is extremely easy to execute and documents can be manipulated at any level. Though I have incalculable list of papers those can be forged but here I will tell you about the most vital and commonly forged document “Agreement between Buyer and Seller” commonly called “Buyer Seller Agreement” or “Builder Buyer Agreement”.
              What is the scope of forging in this agreement? First, fake terms and Second commitment of those terms by fake person
              My experience says no buyer take it seriously until they fall into trap of wrongly quoted terms in buyer’s agreement Most of the people live in a notion that if anything is given in writing and signed by individual in stamp paper got legal value. Yes, you are right; but only to some extent.
              If anyone given you wrong commitment and you have documents to prove the same; you have an upper hand and will be supported by judiciary.
              But, don’t you think that wrong commitment can be done in a stamp papers. You cannot prove it wrong, until you challenge these documents in the court room.
              Another important point; do you really believe at the time of signing the documents, that in case anything goes wrong you will challenge second party into the court.

Here are few examples; what kind of wrong commitment seller can do in the agreement?
Claim of ownership
A seller may have false claim related to ownership of land. Sometimes the property is purchased or allotted from Development Authority but the terms of allotment may restrict the builder to start selling it further before completing certain formalities or depositing certain amount and other charges.
              Or the Builder enters into agreement with the land owner and develops the project as joint venture (this is possible in PPP models too). The actual joint venture agreement may restrict the builder to collect all charges into specified account only or restrict builder to collect cash deposit.
              Or the Builder is in agreement with land owner after making part payments and has power of attorney only which are subject to fulfillment of certain clauses those are not open to the buyer who buys to property from the builder
              Or the Builder is working as a capacity of contractor on the behalf of Co-operative Group Housing Society and appointed as an agent to register membership only

What should be done?
As a buyer, you have all rights to check every document related to the ownership of land. Ask copy of allotment from Authority and read all terms of allotment. Demand attested copy of all related documents if the project is a Joint Venture (even in the case of PPP). Insist for details of all agreements between land-owner and builder where the builder is acting as attorney.
              After getting relevant documents go and get it verified from concerned department or concerned party. Don’t forget photocopies can be forged. If the confirmation is to be taken from any government body than persist for written verification

Project approvals
Sanctioned DPR to Environmental Clearance there is a series of documents what need to be furnished by the developer to his clients; not even 5% of Developers are ready to share these details with the customers. Though they do mention this in their agreement and take customer’s consent that he have seen, studied and got himself satisfied in relation with all approvals and sanctions related to the project.
              All over India, majority of builders are in practice of getting their booking before required approvals. Showing unapproved design for the purpose of selling is an offence but when a builder is printing lucrative brochures and mentioned fictitious details in the agreement about the size, area, floor or plot details than the client assume as these things are authentic. And as because on later state the builder manage to get those designs sanctioned than people leave this point unnoticed that actually whenever the commitment was made, things were not in existence.

What should be done?
As a thumb rule; always as for relevant document whenever a builder is making his claim regarding sanctions and approvals. And don’t forget to crosscheck from issuing authorities to judge validity of the papers.

Payment terms
Some of the payment terms in the agreement especially “Earnest Money” is generally an unexplained term. Forfeit clause is also one-sided in majority of builder-buyer’s agreement and most of the buyers pay heavy damage in case of any adversity.

What to be done?
Agreement between two parties (no matter under what condition), in not legal until it’s covered under the law. Earnest money condition and forfeit clause are totally one-sided and biased in most of the agreements. As a buyer don’t believe that whatever is written got legal entity. Every illegal clause in the agreement (even after signing by the buyer) can be challenged in the court.

Authorized signatory
Chances are that whosoever is signing the agreement on the behalf of builder is not actually authorized person.
              An authorized signatory is the officer or representative vested (explicitly, implicitly, or through conduct) with the powers to commit the authorizing organization to binding agreement. These powers are given by the board of directors or by the proprietor of the company in writing. The authorization letter also explains powers of authorized signatory.
              In practice whosoever signs the authorization letter get no authorization to enter into agreement with the buyer. This can create legal complication and to be supported with other payment proofs to prove sale transaction.

What to be done?
Ask for attested copy of authorization letter whenever you sign any agreement.
              Buying home is actually a legal action but in real for a property buyer it’s an emotional venture. Everyone says that you must take everything in writing from the seller; but are you checking what the seller is writing or is the seller is authorized to write so or it’s only a false claim.