Real estate of India for decades has seen disputes over the ownership of properties due the lack of transparency, due to which the process of any legal action has been delayed. The cost of land in India has grown tremendously in past few years as there are faulty land records. In today's time no property transaction is covered under an insurance policy by Indian insurer. Reason being the title can challenged and courts do not accept government records, agreement as definitive or title reports.
The most common problem faced by developer is that anyone can stall the construction of project by making a legal objection on land titles even after the purchase of the land. This is done even if the purchase of the land has been advertised, announced and the possession has been taken of the land and once the work of the project reaches its peak objection come up for titles of the land. And lifting courts orders on the stay takes a long time.
Now that RERA (Real Estate Regulation & Development Act) has come in effect from 1st may 2017, there is possibility of systematic approach and transparency in the real estate sector. Under the RERA act Promoter/ developer has to provide written affidavit stating the title of the land taken for construction has legitimate documents of ownership. This will ensure that the project will not be delayed due to title disputes.
This step by the government has bought relief to home buyers and will have a big impact on real estate market in India. Homebuyer now has confidence that their investments are safe. There are other concepts which are coming up in India such as Title Insurances. It is common factor in US and Europe, Conclusive titles allows for certainty of title to the land in dispute. Last year insurance regulator IRDAI had proposed to introduce this product Title Insurance to provide cover to people in case of property titles in dispute.
With RERA in effect home buyers do not have to depend on developer's commitment in regard to titles legality. The title insurance products will private equity investment a boost in future.