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Plan to Make Land Deals Transparent, Govt to stand guarantor for title deeds
The Government is considering guaranteeing title deeds in two pilot projects. If implemented on a broader scale, the government could potentially eliminate the biggest risk that of doubtful ownership associated with property deals in the country .
The government guarantees are being considered for two pilot projects, one in Belgaum, Karnataka, that has been underway since 2005, and the second one in Jaipur that has just begun. A McKinsey estimate suggests that government guarantees on ownership of private land could increase property prices by 1.3% of the country's national income or Rs 36,000 crore based on 2006-07 figures. "Land reform and specifically guaranteed titles are a very important milestone under the Jawaharlal Nehru National Urban Renewal Mission," said M. Rajamani, joint secretary at the Union urban development ministry and project director of the mission. "We are hoping to install guaranteed titling for Indian conditions, based on the Australian Torrens titling system." Torrens title is a system where a register of land holdings, maintained by the state, guarantees title to those included in it. In India, title deeds only prove that a transaction involving the property had taken place and the government has derived land revenue from it.
By Dr arvind, Section Real Estate Property Posted on Thu Feb 15, 2007 at 02:08:30 AM EST
Now, the government proposes to ascertain the ownership of land and then stand guarantor to the deed. "If you take away the risk, the land would sell for that much more," said Vincent Lottefier, country head of real estate consultancy Jones Lang LaSalle. "It will bring maturity and transparency to the market."
It is no easy task, however. "Even when we buy property, we have to go through months of due diligence because the records are kept at the tahsildar's office. Imagine doing this across the country," said Revathi Ashok, director of finance at TCI Ventures. "From a developer point of view it would be phenomenal if the government would do it," Ashok said. "But it could concentrate power in the hands of a single individual. The key is how they go about collecting the data and verifying ownership before guaranteeing title." In 1987, Manmohan Singh, then deputy chairman of the Planning Commission, had appointed a one-man committee to study the feasibility of state guaranteed titles. The proposal has now got a fillip after it was added as one of the preconditions to the urban renewal Mission. Many believe that government guarantees will prove to be a boon to courts. "I would estimate that over 90% of the civil cases in this coun try's court system relate to property disputes," said Swati Ramanathan, co-founder of non-profit Janaagraha, who is anchoring the Jaipur pilot that is expected to be completed in two months. "The government may at some point, consid , er setting up a fund which it will use to make payments in case of title fraud. We haven't finalised a model yet. What we do depends on what comes out of the pilots," said Rajamani. The task of ascertaining ownership will be "humungous," concedes former urban development secretary Anil Baijal, who initiated the Belgaum project. Another wrinkle: because land is a state subject, the Central government cannot mandate a law that will apply across the country . "The government should be able to certify title. In the case of a mistake in certification, the government should pay the buyer. Underwriters and insurers could provide this scheme," adds Baijal. Source- HT, Dated, February-15,2007
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