Confused about real estate law? Baffled by all the legalese? In our latest series on simplifying real estate law for you, our legal expert explains the concept of title.
What is title in real estate?
In the context of real estate, having a ‘title’ refers to having a bundle of rights that arise from the lawful ownership of the property. Transfer of the property during a purchase or sale, for example, would be effected by a transfer in this title.
Why is title important? Can’t I just do without it?
No, no, and no! During property transfers, the establishment of a clear title over property, free of any defects, is of utmost importance. Only then will it serve as conclusive evidence of the right of the owner over his property.
Ok, so how can I get a title for my property?
A title over property is acquired either by a transfer (as in the case of sale) or by the operation of law (for example, when property is acquired in furtherance of a will or testament). A title deed is the document which proves the ownership of a property. A title deed can be procured by making an application to the urban development authority.
The Transfer of Property Act, 1882 governs the law relating to titles over property.
Are there different kinds of titles?
Yes! Definitely! It is important to note that title can be held by more than one person as well. Some common forms of having title other than by sole ownership are ‘joint tenancy’ and ‘tenancy in common’.
In the case of joint tenancy, two or more people hold title to the property jointly and equally. Upon the death of one of the partners, his rights of title pass on to the surviving partners.
In the case of tenancy in common, two or more persons hold title over a property jointly. However, they individually hold all rights to title for their respective parts of the property. They may choose to dispose or encumber their share of their property at will, and it will pass on to their heirs upon their death.
I got my title, but I was told that there are defects in the title! How is this possible?
Yes, this can definitely happen.
There may be various reasons backing an imperfect title over the property, such as past-ownership claims and existing liens or mortgages on the property.
The primary safety-net measure that can be taken to prevent such defects is to conduct a ‘title search’, which searches for any doubts or encumbrances vested in the property by tracing the line or root of title.
Most of the registration departments of state governments provide a website for title search, which provide all details relating to the past registration of the specific property.
The concept of ‘title insurance’ is rapidly gaining popularity in India, which will provide an indemnity insurance against any financial loss from a defective title to property. The difference between conventional insurance covers and title insurance is that title insurance seeks to cover any event in the past which has led to an unclear title or dispute about the same, whereas conventional insurance covers future losses.
Disputed ownership is a widespread hurdle in the Indian real estate sector due to the lack of transparency. With the introduction of digital infrastructure by most state governments and the Real Estate (Regulation & Development) regime, it is expected that this problem of disputed titles will soon be resolved to a large extent.
Title is an important document that gives the owner evidence of his hold over a property
You can obtain a title deed from your local urban development authority
To ensure that your title is clear of defects, do a ‘title search’ on the registration websites of government websites