Indian real estate market has seen many changes since the introduction of RERA. Aimed at protecting home buyers, RERA demands some policy changes, for both buyers and developers. One of these changes has been the insistence on title insurance and construction insurance for all projects.

What is title insurance?

To be able to understand title insurance, one needs to understand what 'title' of a land means. A title is the legal recognition of land ownership. Inaccurate or decayed old records of (disputed) land ownership could mean that the land title is not clear. Every time a property's owner changes, the title of the property changes, too.

Where does insurance come in this?

In some rare cases, after one has bought his home and has shifted in, he is faced with people who claim ownership of the land on which he lives, and who insist in challenging his ownership in court.

Ideally, it is the responsibility of the developer to get a clear title before beginning construction. In case of an unclear title, the construction may be stalled if previous owners raise an objection.

The way to prepare for such possibilities, then, is title insurance.

Benefits of Title Insurance

Title insurance protects buyers against loss (and settlement costs) arising from ambiguous (or disputable) land titles discovered after purchase. Unlike other insurances, title insurance protects buyers from past events, rather than those in the future.

According to the law, this insurance covers title problems arising out of forgery, fraud, impersonation, conveyance transfer failure, unpaid taxes, and improper documents. It also covers legal defence costs and costs involved in out-of-court settlements.

Considering how such an insurance would benefit and protect home-buyers, RERA has made it compulsory for all developers to get title insurance for all projects.

This concept, which was earlier famous primarily in American and European real estate markets, is slowly gaining precedence in the Indian realty market also. Currently, various insurance companies are in talks of becoming service providers for an insurance of this kind.