End of nightmare: obtaining a clean, bankable title?
In land acquisition, obtaining a clean, bankable title to a contiguous land parcel of sufficient dimensions is still the greatest challenge to develop projects
The Union Cabinet has recently approved Real Estate (Regulation and Development) Bill to set up a regulator in the every state for the real estate sector with provisions for a jail term for the developer for putting misleading advertisements about projects. It will be mandatory for developers under the law to get every project registered with the regulator before selling any immovable property.
Obtaining clean, bankable titleIn land acquisition problems, developers face greatest challenges in obtaining a clean, bankable title to a contiguous land parcel of sufficient dimensions to develop projects. While talking about the issue, T. Chitty Babu, Chairman and CEO, Akshaya Pvt. Ltd., said, “Obtaining a clean, bankable title is definitely a nightmare for ethical developers like us. The real estate industry in India is still struggling to get an infrastructure industry status which increasing the burden not only consumer front but also as a developer. Lack of transparent, ethical, and simple processes and practices put the pressure on the industry. Middle men and real estate agents often spoil such issues as the developers seek their favour as it reduces their load on time and funds.”
Lalit Kumar Jain, Chairman and Managing Director, Kumar Urban Development Ltd., said, “In India, there is no title certification or title guarantee by government. Also, multiplicity of laws applicable to Lands makes it extremely difficult to certify marketable title without qualifications. There is a greater difficulty in consolidation of various parcels of lands.”Overcoming fragmented holdings difficultiesLand acquisition issues in India are litigations due to inheritance, multiple sales which have not been properly recorded, pledging of land to local money lenders, requirement of cash while dealing with sellers, difficulty in obtaining contiguous land, lands which have been granted to SC/ST by the government, land ceiling laws, tough resettlement and rehabilitation laws, and fragmented holdings. Talking about how the industry is overcoming fragmented holdings challenge, Mr Babu said, “Keeping in mind the complex laws of the land, the way out in this would be to meticulously research on the project, hiring a professionals or agency that are reputed to handle such situation, and finally a panel of adjudicators who can be relied upon.”
The new land acquisition policy on valuation will make it very difficult to acquire lands and also very costly.
-Lalit Kumar Jain, CMD, Kumar Urban Development
Whereas, Mr Jain feels that a comprehensive IT platform to capture revenue, survey, litigations, land subjected to acquisition, forest, eco-sensitive zones, archaeological/defence influence zones, development plan reservations etc. may help assist land title certifications.
High consent rateCorporate fears that high consent rates will make acquisitions very difficult. While commenting on it, Mr Babu added, “Yes, as a corporate we are worried about the high consent rate which is 80 per cent consent for private development. But as an ethical player, we are satisfied that this will ensure protection and safety of the displaced community.”According to Mr Jain, “The new land acquisition policy on valuation will make it very difficult to acquire lands and also very costly.”
…as a corporate we are worried about the high consent rate which is 80 per cent consent for private development
– T. Chitty Babu, Chairman and CEO, Akshaya Pvt. Ltd
Increase in compensation rateThe addition of a rehabilitation and resettlement component is expected to increase the project cost and the real estate developers intend to pass on to the buyers. So certain sections of the industry feel that an increase in property prices will ensure the passage of the LARR Bill, negatively affecting the ordinary buyers. Speaking on dealing with the issue, Mr Jain said, “More practical policy like developed land sharing would work better.”
On the other hand, Mr Babu added, “It is obvious. If the industry can agree and stay quiet on burdening the buyers with increased cost due to lack of recognition for a single-window clearance and speedier approval processes in the industry, I don’t think it should pinch anyone to burden the buying class a little more if can be worked to advantage of affected population.”