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Buying a property? Know how a Title Insurance policy will help you


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. 


Taking cognizance of this the Government of India passed the Real Estate Regulation Act or RERA in 2016.
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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