Land acquisition in India risky transaction for foreign investors

PANAJI: The foreign investors consider land acquisition in India as a high risk transaction because there is no comfort of title insurance to protect their financial interest in immovable properties, an expert agency has said.

US's largest title insurance provider, Fidelity National Financial Ltd, has said that the foreign investors are feeling no comfort of title insurance to protect their financial interest in immovable property against loss due to title defects, liens or other matters.

"Title insurance could potentially be one of the largest drivers growth in the real estate sector in the years to come," Sameer Dhanrajani, country head, Fidelity National Financial India said.

"Based on a study, years ago by a leading consulting firm, it is estimated that the economic gains from titling reforms could be one to two per cent of India's GDP. Based on the World Development Indicators, this could potentially be worth $15-25 billion for India," he said.

The firm says that the title Insurance is a new concept to India. "It has been extensively used in both residential and commercial real estate transactions in the US and Fidelity National Financial (FNF) is the largest title insurance provider and accounts for about 45 per cent of the US market share," Dhanrajani said.

"The owner would insure the property against past liens or encumbrances or CC&Rs (conditions covenants and restrictions) that could potentially cause the loss of title for the property owner. The policy would be in effect till the time the property owner owns the property," he stated.