Guest Contributor: Barun Mitra, the director of Liberty Institute, an independent public policy think tank in New Delhi, India (www.InDefenceofLiberty.org)
The Department of Land Resources in the Ministry of Rural Development, Government of India, has placed the draft of Land Titling Bill 2010, on their web site: http://www.dolr.nic.in/landtitlingbill_notice.htm
The date for submission of comments and suggestions has been extended to Aug 31, 2010.
Below is a12-point summary on the Land Titling Bill, based on the detailed comment that we submitted to the government. Would greatly appreciate your comments.
1. Land being a state subject, the preamble should contain a short explanation as to why a national level model legislation is being proposed.
2. Since the Bill is modeled on the Torrens title system, it is vital to detail specific exceptions for granting Indefeasible title in the Act so that the judiciary is not burdened in the same way as at present in attempting to establish titles and defeating the very purpose of an Indefeasible title.
3. “Part ownership” of a whole property is a complex issue involving various forms of associations by property owners. However, the draft Bill does not go into specifics of titling procedures under the Community Development Scheme and Strata Title. Rather than leaving such important issues for subordinate legislations, it would be prudent to leave such concepts outside of this Land Title Bill, and separate statutes be framed by appropriate authorities to deal with these issues.
4. The requirement that Registers be maintained on paper, along with electronic forms, will entail an avoidable duplication, and can be avoided by simple security procedures.
5. With the operation of the new titling system, the current documents or deeds will change. These documents/templates should therefore form part of the statute itself, and the Bill needs to include the prescribed documents under the land titling regime.
6. The Registry should be allowed to make basic parcel data, owner identification, and valuations publicly available without need for approval of the Director. This information is extremely valuable to the private sector and making it public will encourage development and improve securitisation.
7. Title guarantee proposed by this Bill seeks to reverse the presumptive nature of property titles that have evolved from the common law and in India it finds statutory cover in the Land Revenue Codes of the States. The draft Bill should seek deletion of the provisions in the State Land Revenue Codes which provide for the principle of presumption in favour of the record-of-rights.
8. The draft Bill needs to detail the valuation principles. It needs to replace Registration fees and Stamp Duties levied by States, with a nominal user charge to meet the costs of record keeping. The aim should be to discourage the use of Registration fees and Stamp Duties as primarily revenue gathering measures, rather than facilitating property transaction. This has led to massive evasion, corruption, and loss of revenue to the state exchequers. For the Bill to achieve its objective, transaction costs need to be bare minimum, so that property owners have the incentive to participate in the registration process.
9. Valuation is primarily guided by the zoning and land use regulations. This also becomes necessary in view of the land ceiling, and fragmentation of land holding. By removing land ceiling, and facilitating transactions, the scope of zoning and land use regulations would be significantly reduced. This would help significantly reduce the variation in the value of land in the same area. Seeking exemptions to, or modification of, land use regulations, are another source of corruption affecting land transactions. Removal of land ceiling and consolidation of operational holding would help development of localized land use practices among the land holders themselves.
10. The provisions on the Title Guarantee Fund are inadequate. It needs to be dealt with in greater detail and deserves a separate Chapter. The draft Bill may specify conditions of compensation out of the Title Guarantee Fund to ensure that State powers to indemnify is not stretched and the lack of clarity and unlimited indemnity does not discourage private participation providing Title Insurance cover.
11. Compulsory land titling in a five-year time frame is very ambitious, in a country of diverse land recording systems, administrative competence, and widely prevalent informal arrangements. If adopted it will be prone to capture by special interests, and open a new door for corruption, and trigger a new wave of social unrest. The draft Bill should instead look towards mandatory titling for every new transaction and encourage voluntary registration. This will provide an opportunity to fine tune the rules and regulation, help build trust in the new system, and facilitate its acceptance by the public.
12. For an initiative of this scope, and in a country of India’s scale, the draft Bill needs to encourage the participation of private players, both for for-profit and non-profit, to help with the land mapping, documentation, and registration process. The present technologies allow for such bottom up, demand driven services to take full advantage of the changes in the law and procedures.
Please try and take a look at the actual bill, and share your thoughts.
India Considering Draft Law to Guarantee Property Titles
June 26th, 2010
The government of India has proposed a new law to guarantee property titles, based largely on the Torrens system in Australia and England. The draft was open to public debate and input till June 15, 2010.
Details of the draft law are available in the document below:
http://dolr.nic.in/Draft%20Final%20Model%20Land%20Titling%20Act-04.5.10.doc
Recent article on the topic was published in the “Financial Express” on May 27, 2010 by Ravish Tiwari
New law drafted to guarantee property titles in India
To bring uniformity across the country and replace the existing deeds system fraught with litigation due to inaccuracies in property records, the rural development ministry has drafted a model law to usher in a system of conclusive property titles with title guarantees through registration of immovable properties.
The department of land resources under the ministry has drafted the Land Titling Bill, 2010 that provides for establishment and management of a system of conclusive property titles with title guarantees and indemnification against losses due to inaccuracies in property titles, through registration of immovable properties.
“We have prepared the draft Land Titling Bill, 2010 and have invited public comments. We will soon be consulting state governments for their comments on the draft Bill. We will also be organising a workshop with state authorities to create awareness about the Land Titling system,” Rita Sinha, secretary, department of land resources, said.
The system envisaged under the Bill is currently operational in countries like England, Australia and New Zealand. It hopes to replace the existing deeds system under which the government does not give any title to any individual or organisation.
In fact, in the deeds system, all titles of immovable property are ‘presumed titles’, where title to property is claimed by people through diverse legally recognisable instruments. Usually it is the sale deed which is used as the prime instrument to claim title to property. But it gives rise to litigation with different persons furnishing different instruments to contest title claims.
In contrast, under the land titling system, the government guarantees conclusive title, as against presumed title, for every immovable property which is tagged with an unique property identification number.
Titles under the new system would be indefeasible—title of any immovable property entered in the register of titles cannot be altered or made void.
After sale, the register of titles will erase the earlier assignee in the register and replace it with the new holder. In the register will, on behalf of the government, grant a certificate of conclusive title to the new holder.
The proposed draft model Bill envisages a land titling authority which will have four different divisions—title registry, survey settlement and land information system, property valuation, and legal services and title guarantee—to ensure uniformity and usher in the new system. It also envisages instituting a Land Titling Tribunal to adjudicate issues arising at the time of ushering in the system.
Sinha said the National Land Records Modernisation Programme (NLRMP), approved by the Cabinet in the year 2008, has undertaken a massive programme that can be used as a platform to usher in the new system that seeks to address property rights concerns.
The NLRMP has undertaken computerisation of land records which includes data entry, digitisation of cadastral maps and integration of textual and spatial data, strengthening of revenue and survey training institutions, village index maps and core GIS, legal changes and programme management.
“I am given to understand that the West Bengal government has almost completed digitisation of its land records and is now ready to usher in the new system. I hope the model Act will help the state government modernise the property rights system in the state,” said Sinha, expressing the hope that the model law will provide the basis for uniformity across the country.
