A very disturbing incident involving real estate malpractice has been unearthed in the city of Bengaluru, where the same apartment was sold to different buyers on different occasions through registered sale agreements. The incident has left several homebuyers stuck in a limbo, even though they have signed a registered sales agreement and, in many cases, obtained a home loan.
As reported in Bangalore Mirror, the matter came to light as potential buyers in completed as well as partially completed properties were getting ready for possession as well as registration of sale deeds, only to realize that there were other people in possession of the registered sale deeds for the same property. In some cases, the matter came to light during the process of verification at banks or during legal verification at the sub-registrar's office.
Methods of Carrying out the Fraud
Probing inquiries into this matter bring out a disturbing trend. Builders are said to resell the same apartment after making minute changes to technical parameters such as carpet area, and with the same apartment number, floor, and location. These minute differences were enough for such transactions to be registered separately without raising objections at the sub-registrar level.
Sometimes, the same apartment was sold twice or even three times over a period of years. Each purchaser was sure that he was involved in a genuine deal, as there was a registered agreement, the stamp duty was paid, and the papers were in order. The absence of an integrated electronic database for the apartment numbers, approved blueprints, and sales records made it possible to disregard the duplication.
The case draws attention to the substitution of procedural registration for substantive verification, with the result that counterfeit activities fall between the cracks.
Status of Sub-Registrar Offices Under Scrutiny
The sub-registrar offices are required to check the details on properties before registering any agreements. The fact that there are multiple registrations for the same unit indicates that the checks may have been done on whether the units' documentation is complete or not.
According to experts, the registration authority does not have access to the database of apartment numbers, layouts, sanctioned layouts, or the transactions done previously. Due to this limitation, the concerned authorities verify the information supplied by the builder or the buyer, without the facility to verify if the particular flat is not already sold.
The case has led to mounting demands for accountability at registration centers, with home buying associations calling for an examination of the possible involvement of negligence and/or collusion in allowing the successive registrations to take place.
Banks and Lenders Also Face Scrutiny
The case has also increased uncertainty about the roles of banks and housing financing companies. It has been reported that some of the homebuyers got their home loans sanctioned on the basis of the sale agreements already registered despite having prior agreements with respect to the same apartment.
This points towards the possibility that the lender's due diligence exercise has mainly been dependent on the registration status of the documents and not the actual verification of the titles. Experts in the field have stated that such activities have the potential of exposing the buyer, as well as the lender, to high risk, especially when the level of transparency at the project level is low.
Impact on Home Buyers
Buyers have faced serious ramifications. Buyers have invested their life's savings, have paid EMIs for many years, have calculated possession dates based on the promises made by the developers. Finding out that their property is not their own is causing immense distress.
Certain buyers are currently embroiled in legal disputes over claims of priority, while others are claiming refunds plus interest. For cases where there are various contracts, courts will have to establish ownership through time, intent, and actions, which will take many years.
The home buyer associations assert that ‘registered agreements must not contain any scope for such ambiguity,'” meaning the agreement must not include any room for such uncertainty, “and the onus of verification certainly may not rest exclusively with the consumer.
Regulatory Gaps Despite RERA
Although intended for greater transparency and the benefit of buyers, there is also a lack of integration between the Real Estate (Regation and Development) Act, commonly known as RERA, and land registrations, according to experts. Registration of projects under RERA does not preclude a developer from signing more than one agreement regarding a single unit in case of weaknesses in internal control mechanisms.
This incident in Bengaluru makes it imperative that there be coordination between RERA databases and registrations to ensure that a flat, once it is sold, is "e-locked" to avoid any subsequent sale.
Systemic Issues at Play
Industry observers note that the problem is not limited to one builder or project. It reflects broader structural issues, including:
- Fragmented land and apartment records
- Lack of unit-level digital identifiers
- Manual verification processes
- Weak accountability mechanisms
- Over-reliance on paperwork rather than data-backed validation
Without systemic reform, experts warn that similar cases could emerge in other high-density urban markets.
What Needs to Change?
Homebuyer groups and legal experts are calling for immediate reforms, including:
- A centralised apartment registry linked to sanctioned plans
- Mandatory disclosure of unit sale status at registration offices
- Automated alerts for duplicate apartment numbers
- Stronger penalties for developers involved in multiple sales
- Enhanced accountability for registration officials
A proposed clause can also be made to temporarily freeze the agreements for the sale of a property after they are registered to forestall misuse.
The affected customers are now taking legal recourse through civil courts and consumer tribunals. Some are hoping for possession, while others are seeking compensation or project-level intervention. The Bengaluru experience is a reminder that registration does not always confer ownership, as the property registration systems in Indian cities are in dire need of computerization. Until this happens, home buyers are at the mercy of property brokers despite following all due procedures.
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