The Enforcement Directorate has issued a strict advisory for homebuyers to report builders demanding cash or hiding RERA registrations. The regulator simultaneously attached ₹129.80 crore in assets from the Ahmedabad-based Keshav Narayan Group. This action underscores the rising scrutiny on real estate developers over fraudulent projects and the misuse of subvention schemes, urging investors to prioritize document verification.
The Enforcement Directorate (ED) has issued a stern warning to homebuyers regarding potential fraud in the real estate sector. The agency is urging buyers to be vigilant against developers who refuse to share RERA (Real Estate Regulatory Authority) registration details, demand cash payments, or fail to provide refunds as promised. The regulatory push comes as the ED intensifies its crackdown on developers accused of running fraudulent schemes that promise unrealistic returns without obtaining mandatory government approvals.
Asset Attachment in Ahmedabad
In a significant move under the Prevention of Money Laundering Act, the ED has provisionally attached assets worth ₹129.80 crore linked to the Ahmedabad-based Keshav Narayan Group. Promoters Ronak Ravjibhai Sonani and Vipulbhai Gordhanbhai Gangani are under investigation following multiple police complaints. Authorities allege that the group marketed various flat and shop projects while failing to secure necessary approvals, including mandatory RERA registration. According to the investigation, investors were lured into these projects with promises of exceptionally high returns, ranging from 54% to 100%, without the backing of legal project viability.
Risks in 'No EMI' Schemes
The ED’s latest advisory also touches upon broader concerns in the industry, including the risks associated with 'subvention' schemes—often marketed as 'No EMI till possession.' In these arrangements, the developer agrees to pay the buyer's home loan EMIs until the property is ready. However, if the developer defaults on these payments, the financial burden falls directly on the homebuyer, often leading to credit score damage and legal complications. The agency has been investigating several developers in the Delhi-NCR region, including firms such as AVJ Developers and Rudra Buildwell Construction, regarding alleged irregularities in how these schemes were managed and the resulting financial liabilities for consumers.
Investor Safeguards and Verification
The regulator has outlined several warning signs for prospective buyers to consider before finalizing any property deal. The agency advises against relying solely on verbal assurances from brokers or informal booking forms that lack legal standing. Instead, buyers are encouraged to insist on a formal, written agreement for sale or a registered sale deed. A primary defense against such risks is the verification of RERA registration numbers on official state portals, which confirm whether a project is approved and authorized for sale. Investors are also cautioned against schemes that guarantee buybacks or offer deep, unexplained discounts, as these often lack the underlying asset security required for a safe investment. The focus for investors now should be on checking the legal title of the land and confirming that all statutory approvals are in place before committing capital.