Despite being made mandatory for the real estate projects, paractically there have been sales of “Title Insurance’, that would protect the promoters of the real estate projects in the country against many risks, because of high pricing and lack of clarities on a host of technical issues .

The Real Estate Regulation and Development Act 2016 (RERA) mandates the purchase of Title Insurance for all new and ongoing property developments registered with the regulatory body..


National Insurance Academy, Pune had organised  a seminar on `Title Insurance' in Mumbai on Tuesday and was attended by the all stakeholders include real estate builders, promoters, bankers, housing finance companies, insurers, reinsurers, insurance brokers and government representatives.

Addressing the  seminar, M.S Chockalingam, settlement commissioner, Government of Maharashtra,said,though such a product is already made mandatory in the Act, the state government  has to notify the mandatory feature of the product separately.

“The state government is in the process of enacting Land Titling Bill and may  consider to notify the mandatory feature of the Title Insurance. However, suggestions from this can also come from the MahaRERA.’’ said  Chockalingam.     


“We are keen that market for the Title Insurance should pick up in the stare and benefit all the stake holder of a real estate projects, ‘’ said Vijay Satbir Singh, member, MahaRERA.


Once, the Maharashtra government makes it a mandatory, MahaRERA  can enforce it amomg the promoters of the real estate projects.  


However, sources point out that the Maharashtra government is not in a hurry to notify the  as premiums for such products seem to be expensive and ultimately have to be recovered from the buyers of the real estate projects. 


The state government is now currently evaluating what will be its role in controlling the premiums, that are fixed by the insurance companies,  after making Title Insurance mandatory.

IRDA has already approved seven products of the seven general insurers including, New India Assurance, National Insurance Company, ICICI Lombard General Insurance, Bajaj Allianz General Insurance, HDFC Ergo General Insurance, Tata AIG General Insurance and Liberty General Insurance, there are hardly any transactions for the  Title Insurance products. .


 “We are keen that market for the title insurance picks up as government wants to promote `housing for all; in the  country. 
How much premium ,the insurance companies can charge ,is left to them,'' said anofficial from the IRDAI.said. 


The title Insurance can cover the gross asset value of, consisting of land cost, construction cost and profitability, of  a real estate project, he said.


The premium would vary between 0.5 to 3 per cent of the sum insured for a seven year policy which can extended further.


Sean Dalton, chairman, SLT London, “We think that India can be a much bigger market than the European market in title insurance, which, according to estimates, was 300 million sterling in 2017. 


Maharashtra has currently 55,000 builders.  

This specialty insurance product provides Indemnity to property developers and the subsequent owners of the property against losses and risks related to defects in Property Title arising out of Third Party challenges not discovered prior to the commencement date of the policy due to the Title of Property belonging to someone other than the Insured, Descriptions & Plans in Historic deeds of the property being inadequate, Historic transaction being subject to an act of fraud or forgery by a third party that adversely affects insured’s rights over the title of the property, Title to the Property being subject to Unknown Burdens or Discharge of Burdens which may have been imposed in historic deeds executed prior to the commencement date etc.


Moreover, defence costs / Legal costs incurred are also covered under the policy. Also, certain known defects in the title, may also be covered under the policy by specific underwriting assessment for an additional premium.

After setting up MahaRERA, Maharashtra government has made a draft of Land Titling Bill to  ensure ease in land based credit and optimum utilisation of land with reduced litigation and thereby promote domestic and foreign investments.