Hyderabad, Dec 21 (.) Housing Requirements Customised Solution (HRCS) India today cautioned homebuyers and investors that ‘bank loan approval should not be mistaken for legal clearance of a property’, warning of hidden legal risks in Hyderabad’s rapidly expanding real estate market.
The advisory was issued during an online awareness webinar, titled “Buying a Home Soon? Don’t Take the Risk Blindly”, attended by over 100 participants, including homebuyers, investors, industry professionals and legal experts.
Addressing the gathering, D. Harshavardhan Reddy, CEO of HRCS India, said that loan approval is not the same as legal approval and described this belief as a costly misconception. He explained that banks and NBFCs often sanction loans based on buyer indemnity, which means the buyer alone bears the legal risk if disputes arise related to land title, approvals or regulatory violations.
Referring to recent HYDRAA demolition drives, he said these incidents clearly proved that bank financing does not guarantee the legality of a project.
Reddy also warned prospective buyers against pre-launch offers and heavily discounted deals, stating that such projects often lack statutory approvals, clear land titles and layout permissions. Investing before approvals are in place, he said, exposes buyers to high financial and legal risk, as the entire uncertainty remains with the buyer until the project is fully completed and verified.
Highlighting regulatory compliance, Reddy stressed that RERA registration is non-negotiable for any project with more than eight units, including apartments, villas and plotted developments. He said RERA registration ensures that 70 per cent of customer funds are secured in an escrow account, holds builders and landowners accountable and provides legal protection to buyers in cases of delay, fraud or quality issues.
He further pointed out that RBI guidelines clearly state that non-RERA projects are not eligible for home loans, even though some lenders may still proceed under indemnity clauses.
Calling for responsible real estate transactions, HRCS India urged buyers, builders, landowners and bankers to support and transact only in verified and legally compliant properties to reduce financial stress on buyers and curb the growing burden of non-performing assets on the banking system.
Concluding the session, Reddy said buying property without legal verification is like driving a car without brakes, warning that while one may move fast, it is impossible to stop safely.
. KNR .