Computerisation of land titles may soon be made mandatory

NEW DELHI: The Centre will soon make it mandatory for states to computerise all land titles and get them duly audited to avoid property disputes and to make property transactions transparent.

Non-conformity to the Centre’s direction would stop central funding to the state. “We have asked states to set up mechanism to have clear land titles and maintain proper records,” urban development minister Jaipal Reddy told ET.

“State governments have been asked to create a database of land records and update it from time to time. This is also a condition being introduced under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) for states to access central allocated funds,” he added.

The land title certification will start from the village level itself. “ Even the tehsildar will have to ensure that the titles for lands in his area are duly certified by some auditing agency,” a senior urban development ministry official said. According to sources, there is also a proposal to empanel certifying agencies on the board of land agencies.

Another method for bringing clarity in the land title deeds is getting it insured. The proposal has also been suggested to the state governments. Mandatory title insurance is a practice in the US and some other European countries. It is an insurance against loss from defects in title. It is meant to protect a property owner’s or lender’s financial interest in property against loss due to title defects, liens or other matters.

“It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred due to any title defects,” he said.

These are the cases mainly mired in various family related disputes, litigations and unregistered properties. “ It is also a deterrent to attracting FDI in real estate. Although, there is 100% FDI in real estate through automatic route, but many foreign investors are wary of investing in land and properties due to unclear land titles,” he added.