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Buying a house? The ED has listed key red flags for homebuyers, from missing documents and cash demands to guaranteed returns and unusual discounts.
Construction work underway at a residential site in Noida. The ED has advised homebuyers to verify property documents, RERA registration and approvals before making payments. (IMAGE: PTI FILE)
Buying a house? The Enforcement Directorate (ED) advised homebuyers to verify property documents carefully and watch out for red flags such as demands for cash payments, missing regulatory approvals and promises of unusually high returns.
The agency issued the advisory on Monday while announcing the provisional attachment of assets worth ₹129.80 crore belonging to an Ahmedabad-based real estate company and its promoters in an alleged homebuyers’ fraud case.
Check RERA Registration, Property Documents
“Homebuyers and investors are advised to verify RERA registration, statutory approvals, title documents, land records and encumbrance details before making payment,” the ED said.
The agency also advised buyers to check whether the property is mortgaged or involved in any dispute.
“Buyers should not rely only on oral promises, booking forms, notarised papers or assurances from brokers,” it said, asking them to insist on a proper agreement for sale or sale deed.
Builder Refuses Documents? Report It
The ED said buyers should report a builder to law enforcement authorities, RERA and other competent bodies if the developer refuses to share documents, insists on cash payments, delays registered documents or fails to refund money.
“If a builder refuses to share documents, insists on cash, delays registered documents, fails to refund money or tries to transfer project land to third parties, the matter should be reported to law enforcement authorities, RERA and other competent authorities,” the agency said.
The ED also warned homebuyers about offers that appear too good to be true. “Promises of very high returns, guaranteed buyback or unusual discounts should be treated as ‘warning signs’,” the agency said.
Why ED Issued The Advisory
The advice came alongside the ED’s action against an Ahmedabad-based realty company and its promoters. The agency said it had provisionally attached assets worth ₹129.80 crore in the case of Keshav Narayan Group and linked persons Ronak Ravjibhai Sonani, Vipulbhai Gordhanbhai Gangani and others.
The attachment order was issued on August 14 under the Prevention of Money Laundering Act (PMLA).
The ED’s case stems from multiple FIRs and chargesheets filed by Ahmedabad Police against the accused. The agency alleged that the accused cheated homebuyers, small investors, traders and middle-class families by presenting their real estate schemes as genuine projects.
According to the ED, the accused offered flats and shops at attractive pre-launch prices and promised assured returns ranging from 54% to 100%. The agency alleged that the projects were marketed without mandatory approvals, including RERA registration.
“The attachment has been made to stop further sale, transfer or concealment of these properties,” the ED said. “It will help protect the interests of defrauded homebuyers and investors.”
What Is RERA?
RERA, or the Real Estate (Regulation and Development) Act, 2016, established the Real Estate Regulatory Authority framework to protect homebuyers and promote transparency in the real estate sector.
The ED said it remains “committed” to tracing and restraining proceeds of crime and “protecting” the interests of victims and legitimate claimants by confiscating the assets of accused builders under the anti-money laundering law and subsequently restoring or restituting them to homebuyers.
Key Questions Answered
Ask News18Common red flags in real estate deals include demands for cash payments, missing regulatory approvals, promises of unusually high returns, and unusual discounts. Homebuyers should also be wary if builders refuse to share RERA registration details or fail to refund money.
Ask News18About the Author
Shankhyaneel Sarkar is a chief sub editor at News18. He covers international affairs, where he focuses on breaking news to in-depth analyses. He has over seven years of experience during which he has …Read More
August 17, 2026, 8:16 PM IST
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