Your Shield Against Fraud: Risks and Prevention of Illegal Sale of Property in India

Imagine this: your family owns a flat in Mumbai or a small plot back home in India. It’s part of your future something you’ve worked hard for. But what if someone tries to sell it without your permission? Scary, right? That’s what happens in the illegal sale of property and it’s one of the biggest risks for both Indians and NRIs.

The good news? You can stop it. By staying alert, verifying everything, and getting expert help when needed, you can protect your property from fraud. Let’s break it down simply.

Why the Illegal Sale of Property Is a Big Problem

An illegal sale of property happens when someone sells land or a house without having the legal right to do it maybe the papers are fake, or they don’t actually own it.

Fraudsters often target:

• Vacant land – Empty plots are easy to misuse or sell secretly.
• Forged documents – They fake sale deeds, signatures, or IDs to act like the real owner.
• Unauthorised development – In cities like Mumbai, some builders sell flats without proper permissions, society NOCs, or regularisation certificates.

For NRIs, the risk is higher because they live far away, and it’s hard to keep an eye on their property.

What Can Go Wrong in an Illegal Sale of Property?

Buying or owning an illegal property can cause big legal and money problems:

• You can lose your money – The sale might get cancelled by court, and you’ll spend years fighting to get it back.
• Your home can be demolished – If the construction isn’t approved, the city can order it to be torn down.
• No resale or loan – Banks won’t give loans on such property, and you can’t sell it legally.

How to Stay Safe: The Four Pillars of Property Security

Let’s look at four key steps to prevent an illegal sale of property.

1. Verify Ownership and Documents

Never just “trust” what a seller says. Always double-check the papers.

• Title Deed Verification: Ask a property lawyer to check who actually owns the land. They’ll trace ownership history (chain of title) for at least 30 years.
• Encumbrance Certificate (EC): Get this from the Sub-Registrar’s office. A “Nil EC” means there are no loans or disputes on the property.
• Revenue Records: Make sure property taxes are paid and the owner’s name appears correctly in government records.

This step alone protects you from most scams.

2. Check Construction and Legal Permissions

In cities like Mumbai, illegal construction is a major issue.
Here’s how to make sure your property is fully approved:

• Check Occupancy Certificate (OC) and Completion Certificate (CC): These prove that the building followed approved plans.
• Verify RERA Registration: All real estate projects must be registered with RERA (like MahaRERA in Maharashtra).
• Apply for Regularisation: If you already own a property with small unauthorised parts, apply for regularisation under state schemes (like the Gunthewari Act). Once approved, you’ll get a regularisation certificate making it legal.

3. Protect Your Property If You Live Abroad (for NRIs)

If you live overseas, you need to take extra steps to avoid fraud or illegal sale.

Here’s how:

• Use a Specific Power of Attorney (PoA): Give limited, written permission only for certain actions (like paying bills). Never issue a General PoA it can be misused for illegal sale.
• Hire a Property Manager: A trusted company can visit your land or flat regularly to check for encroachment or unauthorised construction.
• File a Caveat: If you suspect someone might try to sell or claim your land, file a caveat in court. This means the court must inform you before any order is passed.

4. If You Discover Your Property Is “Illegal”

Don’t panic. You can usually legalise it through a regularisation process.

Steps:

1. Apply to your city’s municipal or development authority.
2. They’ll check how much the construction deviates from the approved plan.
3. Pay the regularisation or compounding fee.
4. Get a regularisation certificate your property is now officially legal!

This helps increase your property’s value and makes it safe for sale or loans.

Special Case: Redevelopment and Housing Societies in Mumbai

Mumbai’s redevelopment projects come with their own risks:

• No Society Consent: Builders must have at least 51% consent from the housing society members before starting redevelopment.
• Extra Floors or FSI Misuse: Some builders build more floors than allowed this is unauthorised construction.
• Missing Regularisation: Some new buildings skip final permissions or certificates.

Tip: Always ask for the society’s resolution copy, Development Agreement, and RERA registration before buying any flat in a redevelopment project.

FAQs for NRIs and Investors

1. How can NRIs check a Mumbai property title from abroad?

Visit the state’s IGR website for property details and get the encumbrance certificate. Hire a RERA-registered lawyer to do a 30-year title check in person.

2. What if I find out my property was sold illegally?

Immediately file an FIR with the police and a civil case in court to cancel the fraudulent sale and put a stay order on the property.

3. Is an Encumbrance Certificate enough to ensure safety?

No. It only shows if there are loans or disputes not whether the building itself is legal. Always verify plans, OC, CC, and RERA details too.

4. What should I do if my neighbour builds illegally in my housing society in Mumbai?

Complain to your society committee first. If they don’t act, report it to the BMC and the Cooperative Court.

5. Can old unauthorised buildings be legalised in Maharashtra?

Yes. Under the Gunthewari Act, structures built before 2015 can be regularised after paying fees. NRIs can do this through a registered Power of Attorney.

Conclusion

The illegal sale of property is a real danger but it’s preventable.
Stay alert, verify every document, and get expert help before you buy or sign anything. Whether you’re an NRI or living in India, your property deserves protection and peace of mind.

About lawcrust Realty

At LawCrust Realty, we stand apart as a premium real estate consulting partner for NRIs worldwide, offering end-to-end solutions in Property Management, Property Regularisation, Construction & Redevelopment, and Project Management Consulting.
Rooted in a legacy of legal and hybrid consulting, we understand the unique challenges NRIs face in managing and safeguarding Indian assets. Our mission is to bridge these gaps through compliance-driven execution, strategic foresight, and client-first innovation.
Whether it’s managing NRI-held properties, transforming long-pending assets into legally regularised holdings, or delivering turnkey redevelopment solutions LawCrust Realty combines authority with accessibility.
By choosing us, you don’t just solve property challenges from overseas you future-proof your assets with one of India’s most trusted and forward-thinking realty partners.

Contact LawCrust Today

• Call Now: +91 8450968472
• Email: inquiry@lawcrustrealty.com