Property Title Insurance in the Offing
Filed Under (Properties) by admin on 21-04-2009
9
Bajaj Allianz, ICICI Lombard in talks with American company to launch the product.
Property transactions in India will soon have an insurance cover to fall back in case something goes wrong in the deal. The country’s two large private sector insurers, ICICI Lombard General Insurance and Bajaj Allianz General, are planning to launch title insurance covers this year.
Title insurance is a cover that protects a potential owner of a property against loss from defects in title. The policy is a retrospective one, where the insured is protected against losses arising from the events that occurred prior to the date of issuing the policy. Globally, the policy is bought by investors, occupiers and financiers.
At present, none of the property transactions, be it large acquisitions or a simple sale of a land or a flat, is covered through an insurance policy by an Indian insurer.
The reason is that Indian insurance companies do not have the underwriting expertise to offer title insurance products. Indian insurers require reinsurance support to be able to offer the product.
Both Bajaj Allianz and ICICI Lombard are in talks with First American Title Insurance Company (FATIC), which will be offering reinsurance support for Indian insurers to offer the product.
FATIC is the largest title insurer globally, with a revenue of $8.4 billion in 2006.
Says Swaraj Krishnan, CEO, Bajaj Allianz General Insurance, “We have had a preliminary discussion with First American Title Insurance. We have asked them to give us the product details. We will be doing a market study, verifying the titles and will file the product with the regulator in the coming months.”
The value of the title insurance cover will be equal to the price of land that has to be acquired. The premium rates will be a function of the value of property, the nature of transaction, which means the size of the purchase, the past history of the real estate property, costs relating to title search and the legalities involved in the title search.
Howden Insurance Brokers is also in talks with real estate developers, financial institutions, law firms, insurance companies and reinsurers to culminate into the next few insurance policies being sold.
Says Anoop Mathur, vice-president of Howden Insurance Brokers, “The value at risk has grown proportionally as the land cost has increased for the real estate developers. Title insurance makes a project bankable and saleable to customers.”
According to Akshaya Kumar, chairman, Park Lane Property Advisors, consultants during due diligence discover 20-30 per cent cases have title defects in them.
Property consultants believe that the availability of title insurance products will boost private equity investment in Indian real estate since most of the institutions are very particular about clear titles.
According to accounting and business consultancy firm Grant Thornton India, private equity firms have invested nearly Rs 25,000 crore in Indian real estate and infrastructure in 2007and, according to industry estimates, the investments are set to grow in the coming year.
“Institutions do not buy even if they have the slightest doubt about the titles. More private equity funds will flow in the Indian real estate if title insurance products are available in the country,” says Anuj Puri, chairman, Jones Lang LaSalle Meghraj, an international property consultant.
Adds Anshuman Magazine, managing director, CB Richard Ellis, South Asia: “Title insurance products give a lot of comfort to international investors to invest their funds in the property markets of developing markets such as India. Since these investors do not invest directly and do joint ventures with Indian developers, the local partners will take care of title issues. But we have also seen foreign investors demanding these products before signing the agreements to develop properties.”
According to Mathur of Howden Insurance Brokers, the two Bills — Land Acquisition Amendment Bill, which has been introduced last month in the Lok Sabha, and the Resettlement and Rehabilitation Bill – will make corporates acquiring land for SEZ or other reasons buy title insurance covers.
Explains Mathur, “After the amendement of the Land Acquisition Act, 1984, the government will not be able to acquire land and make it available for companies. As a result, corporates will have to acquire the land directly from land owners at a higher price. In such a scenario, title insurance would protect project developers from any financial loss arising from any defects in title to real property.”
There are two types of title insurance policies: the owners’ policy and the lenders’ policy. Owners’ title insurance is bought by a buyer of the property. It protects the buyer from all loss or defects in a title.
On the other hand, the lenders’ title insurance is bought by lenders such as banks and financial institutions. Experience in other global markets is that all institutional lenders require title insurance to protect their interests in the collateral of loans secured in real estate.
The policy amount decreases each year in proportion to the loan paid off each year. The policy has a provision for defence cost if a title to the real property is challenged in a court of law up to the actual amount of indemnity provided under the policy.
Land records in the country are not computerised and are not easily accessible.
The deeds registration system is not guaranteed by the state government and is inconclusive; typically leaving buyers with 30 years of title deeds to assess. Besides, the level of fraud in Indian real estate transactions is very significant; and the legal process is slow.
According to insurance officials, four to five foreign title insurance companies are keen to do business in India on this product. They may set up a dedicated company in India or could provide reinsurance support to Indian insurers to offer the policy for this line of business.
Watch the video related to properties
www.RHF-International.net Ville: Mougins Near By Town: Mougins Postcode: 06250 Price: €1900000 Beds: 4 Baths: 5 Type: Residential Habitable m2: 250 Terrain m2: 1542 On Domain: Yes Ref ID: 1912 www.RHF-International.com
Help answer the question about properties
What properties of radioactive isotopes make iodine useful?Original question: Of the elements, oxgen, zinc, and iodine, which is likely to be a poo conductor of electricity and a brittle solid at room temperature? What properties of radioactive isotopes make them useful?
sounds like there are 4 owners on the property. why are you two paying all the mortgage and not the other?
anyway, life insurance can pay off the mortgage if you or your spouse dies, but that depends on how much coverage you guys bought.
If it's in foreclosure, there IS A LIEN, the mortgage! You cannot get title insurance on a property you aren't purchasing. Title insurance is to insure the lender and the buyer that once they CLOSE, they will not be held responsible for liens BEFORE they closed from previous owners. It doesn't magically remove liens though, I've done plenty of loans for people that had to use their title insurance to get an old lien off that wasn't theirs, especially tax liens.
First, speak to a lawyer. It's important to know the laws specific to your state, and some of your questions are specific legal questions.
In my experience, banks never foreclosure when the mortgage is being paid on time. It just doesn't happen. But, do NOT ignore their attempts to contact you. Return their calls and work with them. They don't want another foreclosure on their books, but if they don't hear from you, they will take action.
Do give the insurance company a call. You may have to update the policy with your names, but it shouldn't be a problem.
Best of luck to your family.
The title insurance is on the hook for the mess it made. I would advise you to seek legal council. See a real estate attorney right away.
We do them for generally less than the banks charge.
Same service, less middlemen.
ANything a bank does, we do. Maybe better, because this is our only way of making a living.
Do it all at once.
Talk to your real estate agent. They would be able to head you in the right direction.
the title company is responsible for insuring that all liens are paided and that title company is insuring that the liens are satisfied..get an attorney and go after the title company..
client planning to purchase a property at sheriff’s sale needs to be very careful with regard to title. Just because the sheriff’s sale is part of the foreclosure process that involves a court and the sheriff, that does not mean that the title is necessarily clear.
When the lender that started the foreclosure filed its pleadings in court, the lender may have done a good job of checking title and making sure that everyone who had any liens against was named in the foreclosure complaint. All parties named will generally have their liens removed from title when the court confirms the sheriff’s sale and the sheriff’s deed is given. However, many lenders today have their foreclosures handled by asset managers who may at times try to cut corners and not order a full judicial foreclosure commitment from the title company. Consequently, they miss some of the liens against the property.
The sheriff’s deed itself is not a warranty deed. Instead, it is similar to a quitclaim deed. The sheriff’s deed passes the former owner’s title after barring all parties named in the foreclosure action holding liens and encumbrances on the property and barring any parties filing any liens after the lis pendens is filed with the register of deeds.
The agent needs to be particularly cautious about giving advice on the legalities of foreclosure sales. The client, accordingly, should be directed to meet with an attorney to review title and the litigation documents to determine if there are any liens that were not extinguished by the foreclosure.
The client should also be comfortable with the price he or she plans to bid. An appraiser should be consulted if there are any concerns or issues concerning property value.
Huh? If you were pre-approved for a loan, fine. However, if YOU are buying (or were buying) a property, then YOU are not the one who needs the appraisal. What do you mean you have "gotten it fix?" What fixed? Ar eyou BUYING or SELLING a property? Your question is UNCLEAR! An appraisal is something the SELLER has to deal with NOT the BUYER! Yes, you do need a letter or some proof that you have taken out homeowner's insurance on the property YOU wish to purchase, but that only comes after the loan has gone through and you are close to closing. This would be necessary to have at the actual closing of the home. And YOU don't check the title, that is up to the Title Insurance Company. Earnest money is put down when you put in a bid on a home. I think you need to clarify whether you are BUYING or SELLING. Your statements are confusing, and I think you are a bit confused.