Which city are you from? Please select city here.

Rs , sq ft

Removed from Shortlist

My Shortlist ()
Keep track of your shortlisted properties here. Shortlist a property to get started.

95 Percent of Housing Societies in Mumbai are not Insured

1 Comment Sub Category:Uncategorized Posted On: Aug 11, 2011

Insurance of buildings has been compulsory since 2001 under the state government byelaws, hardly any housing societies have taken the initiative. Title insurance ensures that the current owners are safe from past claims and title faults, and puts the property firmly in their possession, particularly in case of housing societies. Insurance can also protect against loss arising from such legal proceedings.

Despite the huge threat to housing societies from both natural causes, such as flood, fire and earthquake, and legal ones, such as title issues and penal action from authorities, very few buildings in the city are insured. Almost 95% of housing societies are not insured,” said Badal Yagnik, managing director of Jones Lang LaSalle India. But, the trend could reverse if the urban development ministry incorporates title insurance in the upcoming real estate management bill.

The ministry has released the draft bill and invited suggestions and objections from all stakeholders before it is finetuned and presented to the House later this year.“Not only will it make ownership of built-up and landed property far more credible and secure, but it will also lead to renewed confidence among subsequent chain of buyers,” said Yagnik.

“As a safeguard for any eventuality, most housing societies in the city put aside a nominal amount under the sinking fund, which would practically be of little use if the building actually sinks,” said advocate Ashok Raote, who specialises in real estate documentation.Raote added that it is imperative for housing societies in Mumbai to opt for insurance, given the huge damage caused to properties by natural and manmade calamities in the past.

Though homebuyers do opt for insurance policies for their individual units — many clubbing it with their home loan — collective insurance of societies is still in the nascent stage in Mumbai. And the obvious deterrent is the high premium, ranging from 0.05% to 0.07%, which runs into a tidy sum for a realistically valued building.

“While the developer can take the insurance until he hands over the property, the society can take insurance in its name once it formally takes over,” suggested Anuj Tyagi, head-corporate business, HDFC-Ergo. But, even insurance firms mostly offer policies against fire and earthquake, and very few firms chalk out policies that include title risk, albeit for a much higher premium.

DNA

One Response to “95 Percent of Housing Societies in Mumbai are not Insured”

  1. Fonua says:

    Great items from you, man. I understand your stuff prior to and you’re simply too magnificent. I actually like what you’ve obtained here, really like what youre stating and the way in which you are saying it. I cant wait to learn much more from you. This is really a great web site.

Leave a Reply



CommonFloor Property Search Mobile App now available on Android, iOS and Windows!