Land-share housing fraud: 40,000 buyers caught up in Tk12,000cr cases

Highlights:

As land prices in Dhaka and other major cities move out of reach for ordinary buyers, land-share housing projects have emerged as an attractive way to own both land and an apartment at a relatively low cost.

Under the model, a plot is divided into shares, with each buyer promised a proportionate ownership stake and an apartment. However, the arrangement's growing popularity has also created opportunities for fraud, with buyers alleging they were cheated through unregistered land shares, unauthorised projects, and the sale of the same plot to multiple investors.

As of 30 September this year, 9,823 cases involving alleged land-share housing fraud were pending in courts across the country, involving nearly 40,000 buyers and around Tk12,000 crore, according to Supreme Court and court sources.

Buyers discover shares sold twice

Holistic Home Builders Limited has been accused of collecting nearly Tk200 crore from 470 customers by promising land shares and apartment construction across 11 projects in Dhaka.

Following an investigation, the Criminal Investigation Department (CID) filed a case against the company. Its Deputy Managing Director Haider Kabir Mithun was arrested in May and remains in jail.

At a project in Uttarkhan, the company allegedly sold 36 shares in a 10-katha plot, promising to construct a nine-storey building.

Asadul Islam Rumon, one of the investors, told TBS that he signed an agreement in 2022 and paid Tk15 lakh for a share.

The agreement promised each buyer an apartment measuring 1,220 square feet. It also stated that the investors would jointly construct the building after acquiring the land. The company showed them what Rumon later alleged was a fake Rajdhani Unnayan Kartripakkha (Rajuk) building plan.

All 36 investors completed their instalment payments by November 2023, he said.

"We later learned that the same shares had been sold to another 40 people," Rumon said.

The company subsequently delayed registering the land in the buyers' names. Investors eventually discovered that it had allegedly put up a signboard on rented land to make it appear that the property was part of its housing project.

According to the CID, 470 customers invested in seven such projects run by Holistic Home Builders from 2020 onwards.

When this correspondent visited the company's office in Uttara Sector 4 on 13 October, he found the premises closed. Security guard Md Ziaul said it had remained shut since angry customers vandalised it in March.

Govt land sold as housing project

In Sylhet, Swapno Chhaya Abashon has been accused of collecting around Tk90 crore from 150 customers by promising a land-share housing project on 40 kathas of land in Lamabazar.

Mohsin Hossain, a private bank official who invested in the project, told this newspaper that advertisements in local newspapers and on social media in 2017 promised a 10-storey building on the property.

Each share cost Tk11.80 lakh and investors were promised apartments measuring 1,400 square feet. All shares had reportedly been sold by early 2020.

When he later contacted the company's managing director Shamim Khairul Islam about registering the land, he allegedly faced repeated delays.

The investors subsequently discovered that the land was government-owned khas land, he said, alleging that Shamim and his cohorts misappropriated the money by presenting the property as a private housing development with the help of some government officials.

Later, Shamim moved to the UK with the project money, he said.

Khairul Hossain, chairman of the Sylhet Apartment and Real Estate Group, said they had received over 50 complaints of land-share fraud.

He said they cannot take disciplinary action because neither the companies nor the individuals involved are its members.

Firms without track records

An investigation into 20 alleged fraud cases in Dhaka found that 16 involved companies operating under the banner of real estate businesses but not affiliated with the Real Estate and Housing Association of Bangladesh (REHAB).

Holistic Builders is among them. Although registered with the Registrar of Joint Stock Companies and Firms, it is not a REHAB member.

Share Land Build Home, accused of collecting around Tk30 crore from more than 100 customers in Aftabnagar, is also not a member.

Another company, Amar Bari Amar Ghor, operating in Merul Badda, has allegedly misappropriated Tk70 crore through it. Sixty-five people filed cases against it.

The investigation found that many companies behind the disputed projects had no previous experience in apartment construction or plot sales.

Beyond Dhaka, over 100 such projects have reportedly been established through individual initiatives along the Dhaka-Mawa Expressway corridor.

Data from the Munshiganj District Judge Court show that 538 cases involving alleged fraud through land-share sales are pending, involving more than Tk1,500 crore. Court sources said 286 individuals had misappropriated the money.

Abdul Aziz, public prosecutor at the court, said many cases involved Keraniganj, Louhajang and Sirajdikhan.

More than 1,000 housing projects have developed around the Dhaka-Mawa Expressway, driven by demand for new housing. Fraudulent groups have exploited that demand to attract investors, he said.

Dhaka accounts for most cases

Supreme Court data show that 5,948 of the 9,823 pending cases are in Dhaka metropolitan and district courts, involving around Tk4,500 crore.

Chattogram has 386 pending cases involving nearly Tk1,000 crore. Narayanganj has 286 cases involving around Tk700 crore, while Sylhet has 213 cases involving around Tk800 crore. Significant numbers of cases are also pending in Gazipur, Manikganj, Narsingdi, Mymensingh, Rajshahi, Bogura, Rangpur, Tangail and Sirajganj.

Laws exist, but enforcement remains concern

Kamal Mahmud, a former REHAB vice-president, said sections 19 and 20 of the Real Estate Development and Management Act 2010 address operating a real estate business without registration and developing or selling projects without approval.

Section 24 states punishment for illegally selling contracted property to another party without the buyer's knowledge, he said, adding that section 31 also provides for potential personal liability for owners, directors and officials when a company commits an offence.

Victims can file criminal cases for deception. However, a cell under the Ministry of Housing and Public Works tasked with addressing such problems has failed to provide effective remedies to complainants, Kamal alleged.

Rajuk is also responsible for overseeing housing projects, but allegations have surfaced that some of its officials and employees have links with fraudulent operators.

REHAB President Dr Md Ali Afzal said the accused companies were not members of the association, preventing it from taking action against them.

He urged buyers to verify a developer's REHAB membership, Rajuk approval and land ownership documents before investing. 

Afzal called on Rajuk and the housing ministry to take action.

Rajuk Member for Administration and Finance and Spokesperson Md Shahinur Alam told TBS that several illegal land-share projects have been closed in recent months as part of regular drive against unauthorised housing projects.

Rajuk would take stronger action if it received complaints, he added.