Lawyers and bankers are warning property investors to perform due diligence before plopping down large amounts of cash on 'great deals.'
Experts warn some property is theft
DUBAI // Investors in Indian property should use their judgment and be wary of false promises, lawyers and bankers say.
"The greed for a better price makes people jump in too early when approvals are not yet secured," said KVS Manian, the group head of consumer banking at Kotak Mahindra Bank.
"It's better to buy when the property is at a more advance stage of construction. Also, buyers should go to well-known lending companies who do due diligence, and to reputed builders.
"Be careful of a loan from a bank that is hugely cheaper [without] approval for the project. It's not worth the risk."
Investors should also be cautious of builders who offer a price advantage for paying a large chunk in advance, Mr Manian said.
Two groups of Indian investors are fighting to get their money back after developers failed to hand over projects scheduled to be completed in 2008.
About 40 buyers from the Gulf have demanded the return of their money or their completed residences from Star Homes in southern India.
And in July, police in India arrested officials from the developer Apple A Day, which allegedly took investors' money without completing construction.
Experts said buyers must ensure clarity in the compensation clause in case of project delays.
* Ramola Talwar Badam