It has been almost a year since the Real Estate Regulation and Development Act, 2016 (RERA) came into force. It has not benefited much in the last year. But, a good thing has happened. It has started RERA Title insurance. It is now necessary to purchase title insurance for all new and under construction properties registered in RERA. Will this help homebuyers? Come, let’s find the answer.
How does title insurance work?
General insurance company HDFC ERGO has recently launched the title insurance policy. It is the first product of its kind in the private insurance segment of the country. It provides protection from damage to developers and home buyers. The policy covers the loss in title due to the problem or risk associated with it. Such a problem arises due to the challenge of title or ownership by the third party.
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Before we tell you what is covered in title insurance? here we see why such a product is needed.
How important is title insurance?
Not getting possession of house is the biggest problem of home buyers right now. This is further aggravated when the project gets into a dispute. The biggest reason at the root of such disputes is the claim of another person on the land on which the project is being built.
Such disputes usually arise due to claims on the title. The title shows the ownership of a property. This right is proved through property papers. The title changes each time a property is sold or purchased. This causes problems in the title.
It takes a lot of time and money in the courts to deal with such a dispute. This is not applicable only to new constructions. This problem can also occur in buying someone else’s house.
What does title insurance cover?
Unlike other insurance products, title insurance does not limit insurance to future events. Simply put, title insurance also covers issues not discovered before the policy was introduced.
There may be some problems with the title. It is possible that the title of the property belongs to someone other than the insured. Or before this, the property has been wrongly traded. These things affect the rights of the insured on the title.
Title Insurance Cover period
Even if the builder has to bear the initial cost, the society can bear the responsibility in later stages. Anurag Rastogi, a member of the executive management of HDFC Argo General Insurance, says, “Premiums are usually paid in a lump sum for the entire policy term. The period can range from 7 years to 12 years. Housing Society 7 May renew the policy for a period of 12 years. “
By the way, title insurance is not available to the landlords of their own land. But, society’s home buyers will benefit from it. Once the builder buys the title insurance policy by paying the premium, it is then handed over to the organization of the allottees of the housing society. Later, they become beneficiaries of this policy. There is a cover of more than Rs 5 crore.
Will Title Insurance increase property prices?
It takes the cost to buy insurance. Therefore, it is possible that title insurance plans increase property prices. In fact, the premium of such a policy depends on many things.
What you should do?
RERA registered builders no longer have the option. They have to take title insurance. expert says that the need for title insurance has started from RERA. However, it can also be purchased for those properties which are not registered with RERA. These properties can be from a few years ago.