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    Soon, builders in Karnataka can opt for land title insurance

    Synopsis

    Land title insurance is an insurance product that provides safety to builders and buyers against any loss from defects in property title.

    real-estate3---thinkstockThinkStock Photos
    RERA officials said they are waiting for an appropriate time to implement the rule.
    BENGALURU: Property prices in Karnataka are set to go up with land title insurance, which is mandatory under the Real Estate Regulatory Authority (RERA), becoming a reality soon. On July 10, RERA will complete one year in the state.

    Land title insurance is an insurance product that provides safety to builders and buyers against any loss from defects in property title. It covers litigation cost if the builder seeks legal recourse against a defective title. While insurance providers are still working out the modalities, industry trackers say they expect the annual premium to be priced at about 0.1% of the land value, because of which property cost would eventually go up.

    The real estate industry, however, is not complaining and is ready to lap up the ‘game-changing’ initiative by RERA as it’d provide much-needed protection to businesses. “The land title insurance will make property buying expensive to some extent. But it is a welcome burden as it provides much-needed accountability to transactions and stability to businesses,” said Adarsh Narahari, secretary of Confederation of Real Estate Developers Association of India (CREDAI), Bengaluru.

    Though RERA makes it compulsory for developers to get title insurance for all new and current projects, the state unit has not been able to implement the clause till now due to lack of insurance players in the market providing such a cover. With insurance agencies now starting to coming up with such products, RERA authorities said land title insurance would become a reality soon. While US-based agency Marsh is already in the market, the State Bank of India recently announced its land title insurance product and New India Assurance has said it’d launch its product soon. RERA officials said they are waiting for an appropriate time to implement the rule.

    “Now, with a few products making headway, land title insurance will soon become a reality,” said RERA chairman Kapil Mohan. “However, it’ll take some more time as we want more players in the field so that there are more options,” he added.

    “For now, the RERA procedure is sufficient as we thoroughly verify the documents before registering projects and there is little scope of getting cheated. That said, the title insurance will be a game-changer,” said Mohan.

    Quarterly project update
    Another game-changer clause in the offing is the quarterly update of projects which is mandatory for builders under RERA. Authorities said software for the quarterly update is being readied and builders will have to update the status of their projects online once in three months.

    "While the title insurance is an added advantage for the builder, quarterly updates will give information to buyers about the status of the project and litigations, if any," said CA Vinay Thyagaraja, a RERA consultant.


    (Your legal guide on estate planning, inheritance, will and more.)

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    (Your legal guide on estate planning, inheritance, will and more.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more
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