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The Dark Side of Real Estate

Last updated: September 16 2013
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  • The Dark Side of Real Estate

    The IREF forum, without a doubt, has helped a lot of investor/end user to choose from apartment, villas, Individual homes and plots. Thanks to the vast amount knowledge that has been shared by all members of forums, gullible buyers have been informed about the pros & cons of an area, construction quality offered by a builder, the prevailing selling rates in an area, the rental rates of an area etc. But there hasnít been much information that has been shared about the darker side of real estate activity.

    Many consider Chennai as a safe bet in real estate and feel that there isnít much land grabbing cases compared to other metros. People seldom see a case or two in the newspaper in a month about land grabbing and comfort themselves thinking Chennai to be safe. My view about Chennai real estate changed after I came to know about few such cases and one in particular, that affected my friend.

    Clearly Chennai has got a dark side that is more than what meets the eye. May be out of 15-20 cases in a month, one or two might be reported in newspaper and gets resolved quickly but god knows what happens to the rest of the cases.

    I will share my friendís story in a short while but before I do that, I would like the forum members to share about personal experiences (if any) & views about such darker side of Real estate, especially Land Grabbing.

    An article in this context that appeared in TOI last week is shared below.

    Article Window

    (By the way, I donít believe land grabbers to become protectors. Devils/Demons donít turn into Angels)
  • #2

    #2

    Re : The Dark Side of Real Estate

    Encroachment is a part of risk and is nothing new.
    Every investment has risk. Many things do not come out as highlighted by article, so there are lot more cases than we know. Good share this will help people to be aware and take the risk into account when making investment.
    Last edited August 17 2013, 09:25 PM.

    Comment

    • #3

      #3

      Re : The Dark Side of Real Estate

      Some senior members will strongly disagree with what I say, but the fact is most people hesitate to buy plots due to land grabbers. If land grabber menace is taken care off, apartment sales will go down substantially.

      Comment

      • #4

        #4

        Re : The Dark Side of Real Estate

        Originally posted by Wishland View Post
        The IREF forum, without a doubt, has helped a lot of investor/end user to choose from apartment, villas, Individual homes and plots. Thanks to the vast amount knowledge that has been shared by all members of forums, gullible buyers have been informed about the pros & cons of an area, construction quality offered by a builder, the prevailing selling rates in an area, the rental rates of an area etc. But there hasnít been much information that has been shared about the darker side of real estate activity.

        Many consider Chennai as a safe bet in real estate and feel that there isnít much land grabbing cases compared to other metros. People seldom see a case or two in the newspaper in a month about land grabbing and comfort themselves thinking Chennai to be safe. My view about Chennai real estate changed after I came to know about few such cases and one in particular, that affected my friend.

        Clearly Chennai has got a dark side that is more than what meets the eye. May be out of 15-20 cases in a month, one or two might be reported in newspaper and gets resolved quickly but god knows what happens to the rest of the cases.

        I will share my friendís story in a short while but before I do that, I would like the forum members to share about personal experiences (if any) & views about such darker side of Real estate, especially Land Grabbing.

        An article in this context that appeared in TOI last week is shared below.

        Article Window

        (By the way, I donít believe land grabbers to become protectors. Devils/Demons donít turn into Angels)

        True - what makes the individual believe that the encroachers would not use the same trick one more time? Moreover in india, its mostly normal people who finally suffer and law is toothless to bring justice..unfortunately we have so much of corrupt politicians who rule the masses that its very difficult to find one good person in that crowd...may be we can only learn some lessons or take some preventive measures which senior RE forum members might be doing to protect their land while they are away from the places.

        Comment

        • #5

          #5

          Re : The Dark Side of Real Estate

          Best way to protect is to build and rent it out/get someone to live there.
          But anytime you put a building on a faraway plot, the investment depreciates. It all depends on one's risk taking potential.

          By the way the guy in the article paid 6L for a 65L plot. So it is not a big deal for him.
          But the encroachers would be boldened by this and will continue doing with twice effort on other properties after seeing money.
          Last edited August 18 2013, 01:32 AM.

          Comment

          • #6

            #6

            Re : The Dark Side of Real Estate

            Originally posted by k11 View Post
            Best way to protect is to build and rent it out/get someone to live there.
            But anytime you put a building on a faraway plot, the investment depreciates. It all depends on one's risk taking potential.

            By the way the guy in the article paid 6L for a 65L plot. So it is not a big deal for him.
            But the encroachers would be boldened by this and will continue doing with twice effort on other properties after seeing money.
            I completely agree with you k11. If plot owners start budging to such tactics of encroachers, then such acts would continue till they run out of vacant land to milk money from owners.

            My friend is now trying to build a small house and rent it out.

            Comment

            • #7

              #7

              Re : The Dark Side of Real Estate

              Originally posted by Rameshr49 View Post
              True - what makes the individual believe that the encroachers would not use the same trick one more time? Moreover in india, its mostly normal people who finally suffer and law is toothless to bring justice..unfortunately we have so much of corrupt politicians who rule the masses that its very difficult to find one good person in that crowd...may be we can only learn some lessons or take some preventive measures which senior RE forum members might be doing to protect their land while they are away from the places.
              The sorry state of our judicial system is that, it wakes up to a crime only when it has done some big time damage. Although there are some Anti-land grab cell that functions in TN, they seem to have their own agenda rather than serving the purpose for which it was conceived.

              A one off case by the Anti-land grab cell is presented in the article below.

              Man drags land-grab cell to high court - Times Of India

              Comment

              • #8

                #8

                Re : The Dark Side of Real Estate

                Originally posted by Love4land View Post
                Some senior members will strongly disagree with what I say, but the fact is most people hesitate to buy plots due to land grabbers. If land grabber menace is taken care off, apartment sales will go down substantially.
                L4L,

                There is nothing to disagree on the fact what you have mentioned. Well, I am now pretty scared to make any investments in plots. Vacant plots will be a strict NO for me hereafter.

                Comment

                • #9

                  #9

                  Re : The Dark Side of Real Estate

                  Originally posted by Wishland View Post
                  The IREF forum, without a doubt, has helped a lot of investor/end user to choose from apartment, villas, Individual homes and plots. Thanks to the vast amount knowledge that has been shared by all members of forums, gullible buyers have been informed about the pros & cons of an area, construction quality offered by a builder, the prevailing selling rates in an area, the rental rates of an area etc. But there hasnít been much information that has been shared about the darker side of real estate activity.

                  Many consider Chennai as a safe bet in real estate and feel that there isnít much land grabbing cases compared to other metros. People seldom see a case or two in the newspaper in a month about land grabbing and comfort themselves thinking Chennai to be safe. My view about Chennai real estate changed after I came to know about few such cases and one in particular, that affected my friend.

                  Clearly Chennai has got a dark side that is more than what meets the eye. May be out of 15-20 cases in a month, one or two might be reported in newspaper and gets resolved quickly but god knows what happens to the rest of the cases.

                  I will share my friendís story in a short while but before I do that, I would like the forum members to share about personal experiences (if any) & views about such darker side of Real estate, especially Land Grabbing.

                  An article in this context that appeared in TOI last week is shared below.

                  Article Window

                  (By the way, I donít believe land grabbers to become protectors. Devils/Demons donít turn into Angels)
                  Long story cut short.
                  1. The land, measuring one ground was bought by my friendís father in late 80ís. The plot is a corner plot with roads on Southern and Eastern side. The layout was promoted by converting agriculture lands into plots. Minimum plot size promoted is 1 ground (40í x 60í).

                  2. 5 years later (around 1995): Very few houses built in the layout. Each house built covers less than 50% of plot area. Coconut trees, mango trees and a well are common sightings in each house. Vast tract of land (resembling a cricket ground) makes it ideal for children to play cricket during weekends. No tar roads, no streetlights. The area is infested with snakes.

                  3. 10 years later (around 2000): Some more houses come up. But this time, the houses are big, occupying almost the entire area of 2400sqft. Playground shrinks, no more gully cricket. Dirt roads, streetlights come up. But area still looks deserted. The area is low lying, becomes a pond when it rains hard. Still infested with snakes.

                  4. 15-20 years later (around 2005-2010): Adjacent areas of this layout become a proper residential area and 4 in one ground apartment concept catches on. Schools come up, infrastructure gets better, bus routes are established. The layout kind of becomes an island with developments on all 4 sides. Some Celebrities throng the place to buy whatever is available for sale. Snakes make way for brokers. Snakes become a rare sighting and broker a common one. Local newspaper agent, guy who runs tea stall, small grocery shop owner, auto driver & many more, all become real estate brokers. All want to make big bucks in shortest span of time.

                  5. Around 2011: The Area is included under Chennai corporation limits. Budget is allocated for laying sewage lines, storm water drains and tar roads. There are very plots that remain vacant (one among them is my friendís plot). Corporation Work begins but progresses at snailís pace.

                  6. 2013: My friendís father gets his shock of life. A single strand barbed wire fence springs up in the plot. A few enquiries in the neighborhood reveal that it was put up 6 months ago. Angered, he pulls down the barbed wire fence. EC confirms the ownership and no transactions for the past 20+ years. A week later, a hollow block compound wall springs up in the same place. Neighbors drew a blank face when asked who constructed the wall. Scared about losing the plot to some forgery, the family installs a ďNOT FOR SALEĒ board mentioning the ownership of land.

                  The moment the board is put up, a person (Broker-A) calls up my friendís father and claims that he had received information that the plot is for sale. Broker-A claims he was informed about the sale by Broker-B. Broker-B is made to come to site and my friendís father is advised to act to as a prospective buyer. Broker-B comes to site, claims he was informed by the broker-C. A call to broker-C confirms that he was informed by Broker-D, who in turns points at Broker-E. Broker-E doesnít pick the call and the chain as of now ends at Broker-E. The land grabbers who want to sell this property off remain untraceable. My friendís father realizes the complexity of the case and calls up old contacts, lawyers and police officers.

                  The same night the board is stolen.

                  Next day the family lodges a police complaint and in the presence of SI they demolish the wall. A push is what it all needs to tumble like a domino block. The family enquires about any such occurrences in the same locality. Police & neighbors are clueless of any such land grabbing activities in that locality. Term it as the first instance.
                  My friendís father meets up with the Sub registrar, explains the sequence of events and the possibility of impersonation to sell the property. Sub registrar says that he has got no legal way of stopping a fraudulent transaction. All he can do is delay the registration once or twice.

                  A JCB was used to clean the bushes, level off the plot and are now building up a boundary wall.

                  The people who tried to encroach the land still remain untraceable.

                  I donít know the exact modus operandi of a land grabbing, but have been collecting some information about it, after this incident, which are shared below:
                  1. Land grabbers seem to target high value areas. Make easy bucks in minimum transaction is the motto.

                  2. Land grabbers scan the areas for months, get input from brokers (may be part of the group itself) before finalizing on a plot/layout.

                  3. Land grabbers apply for an EC in the registrar office. If there arenít any transactions in the last 10 to 15 years they seem to put up a small barbed wire fence. Land grabbers donít show up at the site, it is only the laborers who do the work.

                  4. After the fence is put up, the land grabbers look for any opposition from the owners. If they find out the owner is within the city, they go into hiding.

                  5. If there are no regular visits by the owner, then the group brings in gullible buyers (mostly cash party) to the site. These site visits take place mostly on weekdays and at a time when there is minimum public movement in that area.

                  6. If the gullible buyer is interested in the property a token advance is immediately taken from him to keep him/her locked on to the property. If the original owner finds about the fraud, land grabbers vanish away with whatever money made in the form token advance.

                  7. Documents are forged and imposters are used to complete the registration process.

                  Possible learning from this case are:

                  1. Vacant Lands in areas that have come under corporation limits very recently are high risk group.

                  2. Non-fenced plots/land with no ownership board is more susceptible to land grabbing

                  3. The deduction of a fire triangle is that in order to cause a fire a fuel, a source of ignite and Oxygen is required. Similarly the deduction of a Land grabbing triangle is that the probability of land grabbing is high when there is vacant non fenced land, in a big layout with houses constructed in minimum of one ground plot area, with brokers/JV construction companies lurking 24x7 to make a quick buck.

                  4. Vacant land/plot owners who have not kept neighbors informed about the ownership of the land have lost their land to grabbers.

                  5. If one has got celebrities, political heavy weights, big hotshots living in the same area then owners of vacant land have got to do double time to protect their interest.

                  6. Registrar has got no powers to stop a bogus transaction. All he/she is worried that registration charges are paid correctly and no transaction occurs below the guideline value in force from time to time.

                  7. There is no denying the fact that land grabbers are mostly politically linked. I wouldnít like to drag names of political parties involved in it. But I hope most of us are well informed that in whose regime it happens the most and the regime in which the least.

                  8. Owners should visit the site regularly (atleast once in a month). If for some reason they arenít able to do, ask someone who can go on your behalf (if not monthly, atleast once in 2 months).

                  9. Make friends with neighbors. Ask them to report any suspicious activity.

                  10. Some sort of fencing should be available (at least cattle fencing). It acts as a deterrent.

                  11. If there are a chain of brokers involved in a property, it is prudent to back off as a buyer.

                  Now there are news that the 3 such transactions have taken place in and around the same locality. I cannot confirm how genuine the information is, but taking into account what happened in my friend's case I can be sure plot owners in Chennai can be in for some rude shock.

                  Comment

                  • #10

                    #10

                    Re : The Dark Side of Real Estate

                    Now that we know what to do for preventative measures, what can be done if one finds their property targeted? ... police land grabbing cell?

                    Comment

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