Beware of ‘Assured Returns’ Schemes
May 07, 2019 Real Estate News
Once in a while, we come across ‘Assured Return’ scheme on the real estate properties. The schemes offer 12- 18 percent returns till possessions. They are even advertised under different names to attract buyers.
The Securities and Exchange Board of India has already declared such schemes as Ponzi schemes and has urged the buyers to refrain from investing in any such project. The returns that the builders offer are unrealistic, and the buyers generally fall into the trap due to the false promises of high returns. There have been cases where the buyers have complained about how the payments stopped after a few months or the cheques keep bouncing. They have even complained about the principal amount getting stuck, finding themselves in hot waters.
Recently, the Cabinet has approved the proposal for Banning of Unregulated Deposits Scheme Bill, 2018. Under this scheme, the government will crack down all the assured return investment schemes and treat them as a Ponzi scheme. The buyers must stay away from such schemes offered by the developers and only approach further if the SEBI approves it.
No guarantee no return:
Buyers should be mindful of the valuable investment. The builders often promise to pay rent for the property but how can they pay it if the property is not there. They take the money as their capital to fund the project but cannot afford to pay their buyers back. This not only puts the principal amount at risk but also the interest that they have been promised. The buyers feel cheated and betrayed when the builders do not keep their promise and buyers start losing money.
The Securities and Exchange Board of India has already declared such schemes as Ponzi schemes and has urged the buyers to refrain from investing in any such project. The returns that the builders offer are unrealistic, and the buyers generally fall into the trap due to the false promises of high returns. There have been cases where the buyers have complained about how the payments stopped after a few months or the cheques keep bouncing. They have even complained about the principal amount getting stuck, finding themselves in hot waters.
Recently, the Cabinet has approved the proposal for Banning of Unregulated Deposits Scheme Bill, 2018. Under this scheme, the government will crack down all the assured return investment schemes and treat them as a Ponzi scheme. The buyers must stay away from such schemes offered by the developers and only approach further if the SEBI approves it.
No guarantee no return:
Buyers should be mindful of the valuable investment. The builders often promise to pay rent for the property but how can they pay it if the property is not there. They take the money as their capital to fund the project but cannot afford to pay their buyers back. This not only puts the principal amount at risk but also the interest that they have been promised. The buyers feel cheated and betrayed when the builders do not keep their promise and buyers start losing money.
Take the legal road
In such a case, one can always knock on the door of the court and ask them for help. Filing a case against the builder can help in recovering the money that you have invested. There’s however, no promise that you will also recover the money that you have lost.RERA here to help
RERA was formed to help the buyers who have been cheated by the builders. At RERA you can address your grievances, and it will be provided with a solution. Few states have already started giving out notices to the builders who have advertised their properties with ‘assured returns’ schemes. The agents who are trying to sell the property under the same tag are also under the light and are given notices too. The authorities will look into every project with the tag ‘assured returns’ and will look into it. If the scheme is found fraudulent then, the government will cancel the license of the builder.Looking for property portal?
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