HRCS India flags hidden legal risks in Hyderabad real estate
HYDERABAD: In an online awareness session, Housing Requirements Customized Solution (HRCS) India warned property buyers, builders, and investors regarding hidden legal complications in the real estate field, especially with pre-launch projects and unverified properties. Led by HRCS India CEO D. Harshavardhan Reddy, the webinar offered guidance on navigating the real estate markets in Hyderabad and Bengaluru.
During the session, titled “Buying a home soon? Don’t take the risk blindly,” HRCS India CEO D. Harsha Vardhan Reddy addressed a common misconception. “Until now, we used to buy properties blindly if we were told that a bank loan was available,” he said. “But now we understand that just because a bank gives a loan doesn’t mean the property is 100% legal.” He explained that banks and NBFCs often approve loans based on personal indemnity, leaving buyers solely responsible for any legal issues with the property.
The webinar also addressed the risks of investing in pre-launch or “too-good-to-be-true” offers. Reddy cited recent scams, including one from September, and warned that unapproved projects carry significant risk and stress. “We are investing, hoping to get a good deal. Until the project is completed, we are putting our money in a risky situation,” he said, adding that such offers often lack guarantees, layout permissions, or clear titles.
RERA : Non-negotiable shield
The session highlighted the importance of the Real Estate Regulatory Authority (RERA) registration. Reddy clarified that any project with more than eight units, including apartments, villas, or plotted developments, must be RERA-registered. This requirement ensures that 70% of customer funds are held in an escrow account for the project. It also holds the builder and landowner accountable and gives buyers legal recourse in cases of delay, fraud, or quality issues. RBI guidelines state that non-RERA projects are ineligible for home loans, though some banks may still lend based on buyer indemnity.
Reddy urged buyers, builders, landowners, and bankers to support only verified properties. “Let’s promote verified properties, let’s only transact with verified properties, and let’s all work while respecting the law,” he said. He emphasized that this approach reduces the risk of Non-Performing Assets (NPAs) for banks and secures investments for buyers.
The session concluded with a strong analogy “Buying property without legal verification is like driving a car without brakes. You might move fast, but you can’t stop safely.”
