Insurance for city’s realty
The real estate space in Maharashtra is going to witness some activity of a different kind. The state government has invited global insurance majors to launch title insurance in Mumbai to boost the realty sector.
By Girish Kuber, TNN |
MUMBAI: The real estate space in Maharashtra is going to witness some activity of a different kind. The state government has invited global insurance majors to launch title insurance in Mumbai to boost the realty sector. Title Insurance protects the lender and the property-owner from any loss resulting from flawed or imperfect titles. It also protects property from invalidity or lack of enforceability of mortgage liens.
“It’s like Insuring buyer that the property he is buying is safe. This raises comfort level,” said Sanjay Ubale, special secretary for Mumbai makeover plans. “In the present system, the buyer has to rely entirely on the builder or developer about the property’s title clearance. The title insurance protects buyers.” Mr Ubale is currently working on a mechanism aimed at bringing in more such global players to Mumbai. Chief minister Vilasrao Deshmukh, during his recent trip to the US, had held preliminary discussions with some of the insurance companies there.
As reported by ET recently, Land America, one of the biggest and oldest US-based global players in title insurance, is exploring the legal framework to enter India. With over $4.5 billion in total assets, the 130-year old company provides services to mortgage lenders, realty developers and brokers, corporate end-users, commercial and investment banks and private equity funds. At present, it has operations in Mexico, Canada, the Caribbean, Central and South America and Europe, besides the US.
“Absence of such system makes real estate deals riskier for outside players,” a government official said. Title insurance protects the policyholder against risks such as forged deed or illegal property claims. It can be purchased to insure any interest in real estate. In many developed countries, including the US, title insurance is a mandatory practice for all property transactions. According to the American Land Title Association (ALTA), the industry in recent years has paid about $750 million in claims. In 2003, it was about 4.3% of the $15.7 billion taken in as premiums. “Considering the rapid growth of the Indian realty sector, we need such kind of a mechanism,” Mr Ubale reasoned.
“It’s like Insuring buyer that the property he is buying is safe. This raises comfort level,” said Sanjay Ubale, special secretary for Mumbai makeover plans. “In the present system, the buyer has to rely entirely on the builder or developer about the property’s title clearance. The title insurance protects buyers.” Mr Ubale is currently working on a mechanism aimed at bringing in more such global players to Mumbai. Chief minister Vilasrao Deshmukh, during his recent trip to the US, had held preliminary discussions with some of the insurance companies there.
As reported by ET recently, Land America, one of the biggest and oldest US-based global players in title insurance, is exploring the legal framework to enter India. With over $4.5 billion in total assets, the 130-year old company provides services to mortgage lenders, realty developers and brokers, corporate end-users, commercial and investment banks and private equity funds. At present, it has operations in Mexico, Canada, the Caribbean, Central and South America and Europe, besides the US.
“Absence of such system makes real estate deals riskier for outside players,” a government official said. Title insurance protects the policyholder against risks such as forged deed or illegal property claims. It can be purchased to insure any interest in real estate. In many developed countries, including the US, title insurance is a mandatory practice for all property transactions. According to the American Land Title Association (ALTA), the industry in recent years has paid about $750 million in claims. In 2003, it was about 4.3% of the $15.7 billion taken in as premiums. “Considering the rapid growth of the Indian realty sector, we need such kind of a mechanism,” Mr Ubale reasoned.
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