When investing your hard-earned money in a property, you
would like to ensure that the investment will not run into any trouble in the
future. This is a likely possibility especially if there are any uncertainties
with regard to the title of the land. Your property might not necessarily have
a clear title.
When you are buying or selling a property, title refers to
the legal right to the property that is obtained through a legal and registered
document. There is a change in the title every time there is a change in the
ownership of the property.
During the course of the property changing hands or in the
transfer of the property, defects in the title come to the fore. Past ownership
claims, fraudulent transactions by third parties and the lack of government
guarantees on the ownership of the land has given rise to the issue of ownership or
title in real estate transactions.
The main motive behind this act was to protect buyers from
falling prey to the malpractices of builders engaging in unfair practices. The
act specifies certain norms for real estate transactions to ensure
transparency.
The act provides several rights to homebuyers and specifies
certain rules and regulations to be followed by builders and developers. One
important aspect of the act is the inclusion of the need to have title insurance.
This feature safeguards the interests of owners and
investors. This insurance can successfully pre-empt the issue of ownership or
title which is a prominent issue in real estate transactions and forms the
basis for most title disputes because a defective title holder cannot pass on a
valid title to the buyer of the property.
Title insurance basically protects property buyers against
loss in terms of settlement funds or litigation funds that may arise from any
discrepancies in the title post purchase of the property. Interestingly the
concept of title insurance covers losses due to past and not future events as
is the norm with other insurance policies.
The insurance protects policy buyers against any loss they
may incur due to:
·
Problems caused by forgery, fraud or
impersonation
·
Unpaid taxes at the date of cover
·
Improper creation of documents or their
execution
·
Failure to authorize a transfer of conveyance
·
Document affecting title that is improperly
created
·
Documents affecting title executed under a
false, expired or invalid power of attorney
The policy will cover expenses of court proceedings related
to any litigation on the property title. It also covers expenses incurred
during any out-of-court settlements with the other party. If the value of the
property appreciates then the policy is endorsed to increase the level of
indemnity.
Benefit to buyers
Title insurance protects home buyers by ensuring the
developer honours his commitments. Though this policy may not be beneficial to
individual home buyers, it is advantageous to society home- buyers. The builder
can initially buy the insurance policy and then transfer it to the association
of owners once the project is completed.
Title insurance in
India
The concept of title insurance is relatively new in India
and though the RERA act was passed last year, only a handful of insurance
companies are offering this policy. Insurance companies are wary of the land
details that are either completely manual or partially digitized in certain
states. This calls for greater cost and time involvement from the insurer.
Premiums may also increase considering the greater risk incurred by the
insurer.
But having a title insurance policy ensures that you are
protected against any loss that may occur due to disputes on property ownership
due to defective titles, forgery or fraud in real estate transactions. This
policy ensures that the hard-earned money you invest in a property is protected
against any uncertainties pertaining to its title and its repercussions.
To know more about Title Insurance please
visit www.zeninsure.com or send your
queries to enquiries@zeninsure.com or you can call us
at +91 9848884363. We would be glad to help you out.
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