With government policies favoring Foreign Direct investments and also NRI’s redirecting their focus to native land, there is a great need to have title insurance in India to change the modus operandi of property transactions. The digitization of land records, Government’s amendment to Land Titling Bill 2010 and fair acceptance of title insurance by the realty players can bring about a facelift to the realty sector. Foreign investors will be willing to invest their funds in the realty sector. The absence of title insurance has been a concern.

• Registration of property:



The thumb rule to be followed in all property related transactions is that properties should be registered, which will determine or trace the history of ownership of property. Moreover, relevant documents like mother deed, encumbrance certificate, tax (Khata) certificate, NOC etc will be required for the registration process and to prepare the authenticated sale deed in the Indian context. This process is mandatory and can be quicker with title insurance, where the title experts will conduct a thorough search to obtain the details of the property records.




A cue to the search is the most recent sale deed and a back-dated search to obtain the source of the property ownership.



• Safer realty transactions:



For small, medium or large property dealers, there is always a risk involved when a part or entire property is under a different owner than the one they purchased from. It is becoming rampant with many unregistered properties and unauthorized acquisition of land in a few regions in India.




Flaws in land and property laws will continue to be a debatable issue but title insurance system can cover this loophole, where there will be a clear distinction between a legal or illegal property. The government is already in the process of digitizing the land records which is the first step towards seamless property transactions.



• Rapid urbanization:



For more than a decade now, urbanization has been following an accelerated pace. With industry, not just IT/ITeS, growing, other sectors are gaining global attention too. Recession around the world did hit India to some extent but the industrial experts were positive that it would not be for a long time. Now, as the world economy and India recoup from recession, there is an increasing demand for residential and industrial properties across India.




With the current system of tracing the ownership or other property details, there is scope for frauds. Title insurance will be mitigate these risks that can result in legal transactions while we fuel urbanization.



• Assurance to the property:



Industrial experts in the title insurance domain do a detailed search and will cover any future losses that may arise if they miss elements that question the authenticity of the property, like lack of clear ownership history, delinquent tax, incomplete documentation or unregistered property. This is a one-time cost as title insurance is paid once along with charges as applicable. Indian consumers, being more traditional compared to the West, will find it beneficial to pay a title insurance premium rather than go through the hassles of legal tangles in case of defective title.