Sarthak Ahuja Points Out Common Property Scam In India And How To Stay Safe

For many Indians, real estate remains one of the most trusted ways to build wealth. It promises stability, pride of ownership, and long-term security. But beneath that promise lies a landmine of legal traps, and a growing number of buyers are falling for them.

Investment banker Sarthak Ahuja recently flagged one of the most frequent property frauds plaguing home buyers in India.

In an Instagram post that quickly drew attention, Ahuja described how even a seemingly legitimate transaction can leave buyers without legal rights to their property.

“You meet the buyer, look at all the documents, verify ownership…and are happy with the documentation...You pay and complete the registry. But, a few months later, you get a legal notice asking to either vacate the property or if it's a piece of vacant land, saying that you do not have a clear title or ownership of the land…” he wrote.

The scam typically hits first-time buyers the hardest, especially those from middle-class families who often commit their life savings to such deals.

“Now, you’re stuck with disputed property, unable to sell, and your money is lost,” Ahuja added.

Due Diligence Often Skipped

One of the core issues, according to Ahuja, is the lack of professional legal help during the purchase process.

“Many buyers don’t hire lawyers for a thorough title check. Banks do this when lending for homes, but they don’t check land title, especially if it’s outside your city. Such scams are common in land purchases,” he explained.

Ahuja’s cautionary note assumes significance in light of the fragmented real estate landscape in India, where disputed land titles, encroachments, and overlapping claims are common, leaving buyers at risk from unverified land or property purchase

Title Insurance: An Underused Safety Net

To safeguard against such fraud, Ahuja points to a relatively underused solution: title insurance.

The concept is simple. For a one-time premium, typically 0.5-1 per cent of the property value, buyers can insure the legal ownership of their property.

“The insurance company checks the property’s title. If any issues arise later, the insurance covers financial losses and legal fees,” he noted.

Title insurance hasn’t caught on in India, but it is a standard policy in many developed markets. In concept, it provides peace of mind, and compensation for losses resulting from title disputes, forgery or mistakes in documentation.

Debate on the Root Cause

Ahuja’s post has renewed the discussion about what it’s going to take to clean up the property market. Some thanked them for practical advice, but others said the problem goes deeper.

“Dubai’s property transactions, managed by the Dubai Land Department, are already on Blockchain, paperless, transparent, and with well-defined ownership,” one LinkedIn user pointed out. “Why not expand this approach, instead of relying on insurance” to fix problems that shouldn’t exist in the first place?

So, to be on the safer side, if you are considering buying property in India, particularly land, hire a reputed property lawyer for a comprehensive title search and purchase title insurance as an extra layer of protection.