Scams of Plot Files and How to Avoid Them
Manahil Estate always brings useful blogs to help readers stay aware of the real estate market. This article is about scams of plot files and how to avoid them.
The need for housing is increasing in Pakistan significantly, and hundreds of new housing projects are emerging regularly to cope with it. In the past, traditional methods were used in the real estate sectors, where people bought plots and constructed residential and commercial structures. But with time, the traditional system evolved, and emerging housing societies started to use files instead of on-ground plots and introduced installment plans to ease the people.
What is a file?
Before jumping into the scams of plot files and figuring out how to avoid them, first, you need to understand what is a file. A file is a document that contains information and purchase proof about a specific piece of land/plot but there is no solid allocation on the ground of that specific land area or plot. Files generally undergo balloting, and possession before they are converted into actual plots and assigned to the owner. There is no physical existence of the plot while it is in the file state.
Any housing society or project that is new generally issues the files to customers, then after sufficient submission of dues, balloting is held, and after that, the possessions are granted to users. Plots are generally allotted to the rightful owners after balloting and possession.
Different Plot Files Scams that Happen in Pakistan
Since files are nothing more than the confirmation to allot the plot to the customers; the chances of fraud are very high. The real estate market of Pakistan has seen different scams and frauds in the name of files and it can still happen today. Therefore, it is necessary to understand the frauds that can happen.
Following are the scams made by different housing societies to steal hard-earned money from the general public:
The Growing Need for Housing can give Rise to Increased Files Frauds
As you already know, the demand for housing is increasing consistently and there are lesser resources to cope with these ever-growing housing needs. Therefore, hundreds of new housing projects are emerging on the map of the country. As people are in tired need of affordable housing, this gives a good chance for the scammers and fraudulent housing schemes to take money out of the pocket of the innocent general public.
Generally, scam housing societies display the acquisition of land far away from the urban areas where there is low inhabitance so that there is no one to specify the rightful ownership of land. The general public is not aware of the procedures to follow while purchasing land. Therefore, mostly, they end up trusting the claims of scammers and investing in illegal housing schemes. After acquiring large chunks of money, the management of such housing societies disappears, taking the hard-earned cash along with them. This way people face loss, not only they are scammed of money, but also, no plots are allotted to them.
Housing Societies Selling Files without Land Acquisition
Another major case scenario often observed in Pakistan is that many new housing projects in different areas of the country claim to have large portions of land in far-off areas. Fraudulent schemes use far-off areas to display their false land acquisition because such areas are out of reach of administrative authorities and the general public. Generally, files are just a piece of paper that has no physical existence.
The land that is claimed by the society is either owned by another individual or a group of individuals. It is also possible that such land doesn’t even exist on the face of the earth, let alone be owned by someone else. Based on this false claim, non-authentic housing schemes gather millions and even billions of rupees and harm the general public.
Selling of Files to Purchase Land in Future
This concept is followed by the majority of the housing societies operating today in Pakistan. They do not have the Promised Land but create such an image that they are the owners of a specific land area. This way they try to gain the trust of investors and end-users but don’t have any land in reality. Such housing societies gather funds by selling plot files to the general public and opt for purchasing land after they have gathered an adequate amount of funds.
In simple words, such housing societies cheat the innocent general public through false claims of land ownership. Such residential societies take decades to collect funds and purchase land for development and even more time to develop the society physically. Furthermore, there is a high chance that land prices rise and societies fail to acquire the Promised Land area, hence, harming the customers in one way or the other.
Illegal and Unapproved Housing Societies Selling Files
There are hundreds of housing societies present today that are not approved by the administrative authorities. It is important to note that the government of Pakistan has made special authorities that deal with all the housing societies, land, and development matters in different cities of Pakistan like the Capital Development Authority (CDA), Rawalpindi Development Authority (RDA), Lahore Development Authority (LDA) and more.
According to law, all government and private housing schemes need to acquire Approval from the administrative authorities and get a No Objection Certificate (NOC) before selling any property. Most housing projects start selling plots before approval of the administrative authorities and carry out the approval process in parallel. It is noteworthy that authorities do not take responsibility in case of scams/fraud in illegal or unapproved housing projects.
Overselling of Plot Files
Overselling is yet another clever and dirty method in scams of plot files, adopted by the developers of housing projects. The main purpose of overselling plot files is, solely, to consume as maximum benefit from the general public through scams as possible. Generally, the management of housing societies sells more files than the land area they have or will acquire in the future. No housing society plays this dirty trick on the front end but they do such frauds at the back end and harm the investors and buyers, without caring about the money. Sometimes, society fails to challenge the competitors and get the desired results, therefore, they scam as many people as possible and disappear from the market once and for all.
How to Avoid Plot File Scams
Now, you have abundant information about different scams of plot files that can happen to you in the market. The next thing to learn is, how to save yourself from these frauds and differentiate between authentic and fraudulent housing societies.
Here are some things you should always check out before thinking of investing in any housing society to avoid scams of plot files:
Get Knowledge about the Developers
The first thing you should do to avoid scams of plot files if a society appears to be attractive is that you should search for the developers of the housing projects. There are numerous well-known and reliable housing society developers operating in Pakistan, who have noticeable projects in the market.
Make sure you search for the work history of the developers and the projects they have delivered in the past. It is not necessary if the developer is decades old, the thing that matters are experience and reliability. For instance, Rudn Enclave is being developed by RMRSCO, Capital Smart City by Habib Rafiq Private Ltd, Park View City by Vision Group, and Nova City by Nova Developers.
Always Check the NOC Status of a Society
Before, investing in any housing society, one thing to make sure of is that the society is duly approved by the administrative authorities. Acquisition of a No Objection Certificate (NOC) is a time-consuming process and it involves multiple steps. The government of Pakistan has also made it mandatory for all housing schemes to get approval from relative districts before applying for the final NOC.
Different authorities such as Punjab Housing and Town Planning Agency (PHATA) need to approve the housing society. If a society is declared illegal by the authorities, it is better to avoid it and invest somewhere else. However, exceptions can be made if the society is approved by District authorities or they are under process for the final NOC.
Consult a Reliable Real Estate Agency
The majority of the general public consults real estate agencies instead of buying the plots themselves, this is a good practice. However, there are hundreds and even thousands of real estate firms operating in different cities of Pakistan, the majority of which are not registered with government bodies. Most real estate consultancies are just working for their benefit. They want to sell as many files as possible without any concern for the legality of a housing scheme or caring for the deposits from the customers.
Therefore, it is crucial that choose a reliable real estate consultancy that has a respectable image amongst the customers such as Manahil Estate. You can contact us to get the most precise and authentic information about different housing projects in different cities of Pakistan, mainly Islamabad and Rawalpindi. Customer care and satisfaction are our top priority and we make sure you invest in the right projects that benefit you the most!
Conclusion
In conclusion, there are numerous scamming and misleading housing schemes already present in Pakistan and they continue to rise. Such housing schemes are not limited to any city but are present in the major cities of the country. FIRs have been lodged against a large number of illegal housing schemes and some black sheep are still operating in the market.
It is better to do some homework and research before investing in any housing society instead of facing dire consequences for prolonged periods. Just understand the scams of plot files as we’ve discussed in this blog and make sure you understand them well. Moreover, follow the tips we have provided to ensure that you invest in the right housing project that rewards you in the future!
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