Land Title Insurance Compulsory For MahaRERA Registered Builders
Why Land Title Insurance Compulsory for MahaRERA Registered Builders?
The state housing department is set to make Land Title Insurance compulsory for MahaRERA registered builders, for which insurers are already in conversations with the regulatory authority to make a decision on the premium.
Land title insurance is a kind of reimbursement protection, which safeguards builders and customers against financial loss from mistakes in title to real property, among others. It had earlier unsuccessful to clear out due to high pricing and lack of transparency, as well as differences in the government records.
The Real Estate (Regulation and Development) Act 2016 (RERA) directives the purchase of title insurance for new and ongoing realty projects registered with the MahaRERA (Maharashtra Real Estate Regulatory Authority).
As per sources, insurance companies have already enforced the Insurance Regulatory and Development Authority of India (IRDA) for launching title insurance products. On the other hand, developers are demanding the state government should announce a separate notification in this matter.
Rajiv Parikh, the president of the state Confederation of Real Estate Development Association of India (Credai), told that “While title insurance is a must for assured titles, it is up to the government to make sure that electronically generated titles are made available so that insurance can be needed for these assured titles. Having said that, the government needs to settle differences in title records to bring more insurers to hit the sector,”.
He further added that even though the title insurance cover may start with new projects, the premium should not be too high as the developers would be passing it on to the buyers.
As per the sources, the premium may differ from 0.5 to 3% of the sum insured for a 7 years policy which can be extended further. Two transactions for the title insurance products have already succeeded in Mumbai and the state governments are in the process of establishing Land Title Bill and may acknowledge briefing the mandatory features of the title insurance too.
Assured insurance for the title will benefit consumers to attempt the insurance in case of any differences said State settlement commissioner S Chockalingam, who has been instrumental in recommending for the title insurance.
He further added that once, the state government makes it compulsory, the state real estate regulatory body can execute it among promoters of new projects.
At the same time, the government would have to control the premiums as the consumers are not too interested in title insurance over the fear of increasing the cost of the property.
