What is Title Insurance and How it Can Benefit the Home Buyer?
Jun 20, 2017 Home Trading Steps
Real Estate Regulation and Development Act, 2016 has come into full force and is promising to take away all the woes of the buyers regarding the frauds and delay in delivery of the projects. High penalties and mandatory registration is the first step to making sure the buyers are not getting into a fraudulent project. There’s another clause as well that will help the buyers, that is compulsory insurance of the title. This will give extra cushion to the buyers as well as the developers. RERA laws are laid down keeping the interest of both the buyers and the builders.
We discuss how Title insurance can benefit the buyer:
What is title insurance?
Title insurance safeguards the interest of the policy holder or the property owner in case of any financial loss due dispute or any defects in the property. Last year Insurance Regulation and Development Authority formed a seven member committee to research on the scope of such policy in the India market. The policy is designed in such a way that it safeguards the interest of the property owners, investors, lenders against the property issues. Real estate law points out the necessity of the project insurance to help keep the best interest of the buyers and investors intact.
What does title insurance cover?
The concept of title insurance is fairly new. The concept is designed keeping in mind the real estate sector’s state in the country. Not every state in the country keeps the digitised records of the properties.
Some of its provisions are:
1. Defect in, or lien on the title at the date of cover including but not limited to, indemnification of loss from a defect in the title caused by-
Forgery, fraud, undue influence, duress, incompetency, incapacity or impersonation.
Failure of any person or entity to have authorised a transfer of conveyance
Document affecting title, not property created, executed, witnessed, sealed, stamped, acknowledged, notarized or delivered
Documents affecting title executed under a falsified, expired or otherwise invalid power of attorney.
2. Defence cost: if the property title is challenged in the court, then the entire expense will be covered by the insurance.
3. Out of court settlement: the expense involved for the out of court settlement will also be covered under insurance. This will also include the compensation made to the party given the petitioner should not be the co-owner or the co-borrower of the property.
How is title insurance beneficial for the buyers?
Title insurance is taken up the developer at the time of registration. The premium is paid by the developer till the time construction is completed. Afterwards, the policy will be transferred to the apartment association with all the necessary documents. Henceforth, the insurance should be renewed by the registered authority of the project each year.
Who is providing the service in India?
Currently, the insurance companies Bajaj Allianz and ICICI Lombard are in talks with the First American Title Insurance Company to provide the support for the same.
We discuss how Title insurance can benefit the buyer:
What is title insurance?
Title insurance safeguards the interest of the policy holder or the property owner in case of any financial loss due dispute or any defects in the property. Last year Insurance Regulation and Development Authority formed a seven member committee to research on the scope of such policy in the India market. The policy is designed in such a way that it safeguards the interest of the property owners, investors, lenders against the property issues. Real estate law points out the necessity of the project insurance to help keep the best interest of the buyers and investors intact.
What does title insurance cover?
The concept of title insurance is fairly new. The concept is designed keeping in mind the real estate sector’s state in the country. Not every state in the country keeps the digitised records of the properties.
Some of its provisions are:
1. Defect in, or lien on the title at the date of cover including but not limited to, indemnification of loss from a defect in the title caused by-
Forgery, fraud, undue influence, duress, incompetency, incapacity or impersonation.
Failure of any person or entity to have authorised a transfer of conveyance
Document affecting title, not property created, executed, witnessed, sealed, stamped, acknowledged, notarized or delivered
Documents affecting title executed under a falsified, expired or otherwise invalid power of attorney.
2. Defence cost: if the property title is challenged in the court, then the entire expense will be covered by the insurance.
3. Out of court settlement: the expense involved for the out of court settlement will also be covered under insurance. This will also include the compensation made to the party given the petitioner should not be the co-owner or the co-borrower of the property.
How is title insurance beneficial for the buyers?
Title insurance is taken up the developer at the time of registration. The premium is paid by the developer till the time construction is completed. Afterwards, the policy will be transferred to the apartment association with all the necessary documents. Henceforth, the insurance should be renewed by the registered authority of the project each year.
Who is providing the service in India?
Currently, the insurance companies Bajaj Allianz and ICICI Lombard are in talks with the First American Title Insurance Company to provide the support for the same.
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