Learn about Real Estate Fraud and the Ways to Avoid it

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2024-03-09

Real estate investment is one of the most popular types of investment because of the profits it achieves. It is known that real estate investment is active in countries that have a strong and stable economy because these countries provide an atmosphere of profitable investment and guaranteed return.

Nevertheless, it is not without risks, such as the risk of real estate fraud, which we will expand on in today's article.

Definition of real estate fraud:

Real estate fraud is a process carried out by the fraudster to collect money from the person who is going to buy a property as a result of the buyer's lack of care or experience, or his lack of knowledge of all the laws related to real estate, especially if he is a foreigner in the country in which he intends to buy a property.

It is possible for the fraud to take place by exploiting loopholes in writing the contracts, which lead the contract holder to lose his money and lose the property.

Therefore, the person who is going to buy a property must be aware and careful in every step he takes, and seek the assistance of someone who provides him with help to have extensive experience in the field of real estate.

In our article, we will learn about the forms of real estate fraud, and the most important precautions to be taken in order to avoid falling victim to fraud.

Rules to follow when buying a property:

We will mention several steps that the next person to follow when buying a property, o protect him from being exposed to real estate fraud:

- Inspecting the property on the ground, and making sure that it conforms to the full specifications mentioned about the property, paying attention to the smallest details of the area and number of rooms, the view, the location, the services available in the property and its surroundings, in addition to its proximity to the transportation network, and the full specifications mentioned about the property.

-Ensure that the price of the property matches its specifications, and it is preferable to hire a real estate expert.

-Visiting the real estate registry department and verify the legal status of the property, such as not being under mortgage, seizure, or an unexpired lease contract, or other reasons that prevent the completion of the sale.

-Ensuring that the seller is the real owner of the property, and that there are no partners in ownership, in addition to paying attention to the psychological and mental state of the seller, as the buyer bears responsibility in the case that his mental state is not normal and the sale contract is invalidated.

-The most important thing is to use a real estate agent, or a reliable real estate company, as real estate companies are distinguished by specialists and experts on the legal and real estate levels, and they can accompany the client to complete all the steps successfully and safely.

Real estate under construction:

Investors tend to buy properties that are under construction or off-plan, because of the large profits they make with real estate investments, yet they are threatened by fraud and need a lot of caution and precaution.

It must be ensured that the company undertaking the project is credible and trusted by customers.

The company must provide all details related to the project, including determining the economic feasibility of it, the date of delivery and others.

The most important thing is to visit the project site and check the specifications of the view, location and surrounding services.

The company's signing of regular contracts obligating it to complete the project and deliver it on time.

Real estate fraud methods:

In our article, we will focus on real estate fraud in Turkey, given the great demand for real estate investment by foreign investors, because of the facilities provided by the Turkish government that stimulated the real estate investment market in Turkey, and this great demand for real estate in Turkey، was accompanied by large operations of fraud, relying on Lack of foreign investor knowledge of Turkish laws.

Among the most common fraud methods:

-Exploiting the high demand from foreigners to buy real estate in Turkey to obtain Turkish citizenship، and selling them inappropriate properties that do not meet the full requirements for citizenship.

-Raising the price of the property above the price it deserves.

-The property is under mortgage, seizure, or tax accrual.

-Falsely claiming ownership of the property, and selling it by someone who does not own it.

- The low investment return from the property, which does not match the high investment value of the property.

-Fake construction companies, who sell off-plan properties.

Turkish government advice for buying a property from a construction company:

-Preferably the construction company is affiliated with the Turkish government.

-Pay part of the price of the property, and agree to complete the payment of the full amount with the completion of the project and the receipt of the property.

-The entire agreement is documented by a contract certified by a government department, in which the first payment and the agreed monthly payments are specified, with the project start date, delivery date and full property specifications.

-Hiring a person capable of following up on the progress of the project, preferably an architect capable of matching the specifications in reality to the specifications identified in the contract.

Problems of buying real estate in Turkey:

Foreign investors face many problems when they buy real estate in Turkey, and they may be exposed to real estate fraud, including:

Unreliable companies:

One of the most common problems facing foreigners wishing to own a property in Turkey for housing or investment, as these companies take advantage of the foreigner’s lack of experience, and his ignorance of real estate prices in Turkey, and their differences according to the property’s specifications in terms of space, location and services, and he may not have sufficient knowledge of active and less active sites active in Turkey.

As a result, he is exposed to fraud and loses a large part of his money.

Ignorance of steps and laws:

The foreigner's problem could be his ignorance of the necessary steps to buy a property in Turkey, where a defect in one of the steps could cause him to lose money.

In addition to his lack of knowledge of all real estate laws in Turkey, the required papers and the method of ratifying these papers in state departments.

He may not be aware of all the state departments responsible for completing the purchase and transfer of ownership.

Insufficient knowledge of the real estate investment market:

Despite the strength of the real estate investment market in Turkey, many foreigners suffer losses as a result of not having enough information about real estate investment activity sites and seasons of activity.

As an example, the process of buying a property for real estate investment in the field of tourism can cost the investor many times the price if he buys the property in the peak season.

Turkish real estate market

What do you do if you are exposed to real estate fraud?

The best that can be done is to hire a lawyer who has experience in the field of real estate fraud, and assign him to be able to follow up on your case and bring back your full right.

The lawyer must be provided with all the information related to the process of purchasing the property, all the procedures and documents you own, and everything that serves him in proving your right and convicting the fraudster before the Turkish judiciary.

What has the Turkish government done to reduce real estate fraud?

The Turkish government sought to secure a safe real estate investment for foreign investors, and protect them from real estate fraud, so it approved the Real Estate Valuation Law, to assess the real price of the property and protect the investor from exploiting his inexperience in evaluating real estate in Turkey. On the other hand, the law prevents tax evasion operations related to real estate.

What is the Real Estate Appraisal Law?

The real estate appraisal is obtained from real estate experts in the Turkish government, or by real estate companies or real estate experts granted by the Turkish government a license to prepare a real estate appraisal report in accordance with internationally known laws and standards.

The report includes an assessment of the real value of the property, with all information related to the property and its location. The real estate appraisal is an official report that is required to complete the process of registering the title deed in the state real estate records.

Benefits of real estate appraisal law in Turkey:

Protecting foreign investors from real estate fraud.

Raising the value of real estate investment in Turkey by increasing investment safety.

Controlling real estate prices in Turkey.

By following the laws of the Turkish government, and using a reliable real estate company, you can protect yourself and your money from the risk of real estate fraud.