Fraud and hidden problems

How to check if a property is mortgaged or has unpaid dues

By Adil Builders · Updated 25 September 2026

A property can be owned by the seller, sold by the right person, and still have money owed against it. That debt can become your problem.

Mortgages and bank charges

Imagine Ahmed owns a house and borrows from a bank against it. The bank now has an interest in the property as security. Ahmed then offers to sell it to you and says he will clear the bank later.

Do not accept that casually. You need to know:

Is there a mortgage, charge or other encumbrance on the property?
If so, how much is owed, and to whom?
Exactly how and when will it be cleared: before your payment, or out of it?
What document will prove it has been cleared?

A right, interest or restriction like this is called an encumbrance. A property with one has an encumbered title. You want a clear title.

Unpaid dues

Not every problem is a bank loan. There can also be society dues, development charges, utility bills, taxes and penalties.

Say the price is two crore and the seller says "two crore final." After the sale you discover eight lakh in society dues, and an argument starts about who pays.

How to protect yourself

Ask the society in writing for a statement of dues and development charges on the plot.
Ask the seller in writing whether there is any mortgage, charge or debt, and put their answer into the agreement as their responsibility.
Make it a condition of payment. The final payment is only due once the bank charge is cleared and the society confirms no dues. Lawyers call this a condition precedent.
Say who pays what. The agreement should state that all dues from before completion are cleared by the seller before transfer.

Your agreement should say clearly who is responsible for every amount owed before the transfer.

Price is not the full cost

Seller A offers Rs. 1.85 crore with Rs. 10 lakh of development charges outstanding. Seller B offers Rs. 1.90 crore with everything paid. Seller A is not cheaper. Compare the total cost of getting a clean, transferable property, not the headline price.

From Chapter 5, Due Diligence and Fraud of Understanding Property in Lahore, built from PLRA, LDA and FBR sources.