India - Mitigating Property Title Risks
 
With reduced restrictions on foreign investment and the prospect of healthy double-digit yields in the Indian real estate sector, the level of interest from cross-border capital has grown exponentially.
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However, like many other Asian markets, India's property title system and market practices present considerable difficulties in establishing clean title to property. Whilst the underlying legal system is based on English common law, there has been limited modernisation of real estate statutes since independence in 1947. The quality and reliability of the available deeds registers is patchy and there are no State guarantees of title or title registration systems; typically leaving buyers with 30 years of title deeds to assess.
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Most city survey records only show land, not buildings erected on it, and it is common to see encroachments by neighbouring owners. Customary rights and community property rules differ by religion and present a myriad of complications.
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The court system is notoriously slow and it is common practice to deal with doubts on title by placing advertisements in local newspapers for potential claimants to come forward.
 
Title Insurance
 
Title insurance from First American provides a resilient risk mitigation tool for investors. Coverage includes the beneficial ownership of the property and the validity of insured mortgages. The premium is a one-off up-front payment on purchase and the policy lasts as long as the ownership of the property or life of the loan.
 

 
For more information on how title insurance can protect you and your clients, please visit our website www.firstam.com.hk or contact us.