BENGALURU: A property management company is under scrutiny for allegedly using dual agreements to facilitate hidden deposits, unpaid rents, and questionable HRA claims, ensnaring property owners and sub-tenants.
Residents of Bengaluru have long been aware of the risks posed by unscrupulous tenants and property management firms that exploit unsuspecting landlords. Recent revelations expose another scam that appears to defraud the government by misrepresenting claims for house rent allowance (HRA) exemptions.
A homeowner who wishes to remain anonymous shared their experience with Catena Homes, stating, “I only received rent for a few months after entering an agreement with them. When I checked on my apartment, I discovered it had been leased out for nearly ₹20 lakh. They stopped payments, and now I’m struggling to manage my EMI. I had no idea the tenant had made such a large payment to Catena Homes.”
For years, sub-tenants in different apartment complexes have occupied units through arrangements made by Catena Homes. While rental agreements were submitted to housing associations and posted on digital platforms like myGate, separate lease agreements between Catena Homes and these sub-tenants detailed significant upfront deposits ranging from ₹17 lakh to ₹20 lakh, with even higher amounts for villas and extended lock-in periods.
Reviewing documentation from multiple properties reveals the existence of paired agreements for the same apartment and sub-tenant—one being a lease agreement, the other a rental agreement. Many lease agreements specify hefty deposits and multi-year terms, while rental contracts display modest amounts and standard monthly rents.
Some sub-tenants allegedly utilized these rental agreements to claim HRA, misrepresenting their rental status to employers and the government. In several cases, the PAN number of Catena Homes was provided instead of the actual property owner’s, prompting investigations by the income tax department.
The situation indicates a deliberate attempt to maintain a façade of conventional rental arrangements while obscuring the underlying financial dealings. This scheme allowed sub-tenants to exploit tax exemptions repeatedly, with Catena Homes retaining control over properties and cash flows.
The scenario worsened when income tax investigations led to the freezing of Catena Homes’ accounts, hindering their ability to make rent payments. As a result, property owners demanded overdue payments and sought possession of their properties, exposing the fundamental issues with this business model.
Realizing the extent of the deceit, sub-tenants have started filing legal injunctions, presenting the true lease agreements to substantiate the large sums they paid. Until the scheme’s collapse, many sub-tenants seemed complicit in maintaining the illusion. Previous reports from Bangalore Mirror have highlighted similar cases, including “Tenant poses as owner to lease out flat” on April 20, 2024, and “Rent scam: Victims at lurch, staging protest against inaction” on June 25, 2024, underscoring the plight of both property owners and tenants amid alleged inaction.
