Mumbai : Even as the Real Estate (Regulation and Development) Act makes it mandatory for developers to take title insurance, builders are hesitant to adopt it, saying it may further add to financial burden, say experts.
A title insurance is a form of indemnity insurance that protects investment in real estate and provides coverage against financial loss arising from title defects and other irregularities pertaining to property acquisition.
Section 16 of the Rera Act necessitates developers to adopt title insurance, however, it will be mandatory after the regulator of each state notifies it.
Currently not a single state regulator has mandated it, while MahaRera has indicated it would soon issue a notification in this regard.
“The Indian real estate market has been grappling with lack of transparency for decades, which has resulted in unclear titles, leading to disputes. Title insurance will help improve transparency, bring mutual value for developers and buyers connected through one or more projects,” Ekta World chairman Ashok Mohanani said.
Title insurance is available in many countries, including Britain, Canada, Australia, Europe among others.
However, since the concept is new in India, not many firms have introduced the product.
