Foreign investors consider land acquisition in India as a high risk transaction because there is no comfort of title insurance to protect their financial interest in immovable properties, according to an expert agency.
US's largest title insurance provider, Fidelity National Financial Ltd, has said that foreign investors feel no comfort of title insurance to protect their financial interest in immovable property against loss due to title defects, liens or other matters.
"Title insurance could potentially be one of the largest growth drivers in the real estate sector in years to come," Fidelity National Financial India Country Head Sameer Dhanrajani told PTI.
"Based on a study years ago by a leading consulting firm, it is estimated that the economic gains from titling reforms could be 1-2 per cent of India's GDP. Based on the World Development Indicators, this could potentially be worth USD 15-25 billion for India," he said.
The firm said that the title insurance is a new concept to India. "It has been extensively used in both residential and commercial real estate transactions in the US and Fidelity National Financial (FNF) is the largest title insurance provider and accounts for about 45 per cent of the US market share," Dhanrajani said.
"The owner would insure the property against past liens or encumbrances or CC&Rs (conditions covenants and restrictions) that could potentially cause the loss of title for the property owner. The policy would be in effect till the time the property owner owns the property," he stated.
