Who moved my Property?
During
the last session of the GCPP Workshop in New Delhi, Anupam had introduced the
concept of property rights, Coase Theorem and the challenges Coasian solutions
face. We got to know that the fundamental role of a Government in a society is
the enforcement of contracts and protection of property rights. The stark
reality is we don’t have a clear cut process of granting property rights and
Titles yet.
A
title is a bundle of rights associated with property. An owner of a title can
have the rights to possess, lease, mortgage, bequeath, subdivide and sell the
property. A transparent and efficient system of granting or obtaining land
titles will help in reducing land disputes which clog our civil courts and
reduce the transaction costs in the property market. Under the current system,
a deed in registered under the Registration Act of 1908 and the registering
authority is not concerned with the validity of the documents. Land is a State
subject and the Department of Revenue (or Department of Land Revenue) of the
state is responsible for maintaining the records of property and rights. We
have something called the Presumptive system of ownership i.e. the person shown
in the records for paying land revenue is presumed to be the proprietor until
unless proven otherwise. The current system neither verifies that the seller is
the undisputed owner nor does it guarantee that the property is free of
disputes or litigation. This is one of the reasons why disputes arise after
several years of purchase and possession of property.
A
clear system of land titling will helps in cleaning up of property market,
provides security of tenure and aids in using titles as collateral for loans.
Professor Hernando De Soto in his book The Mystery of Capital argues that the wealth of the
developed world is due to the clear system of land titling and protection of
property rights. The most widely used system of land titling is called the Torrens title,
named after Sir Richard Torrens, who led the land registration in 19th
century Australia. Titling under the Torrens system involves maintaining a
public record or register of immovable property which the State guarantees
inalienable title to those registered in it. The 3 principles of the Torrens
system are Mirror, Curtain and Single Agency. The mirror principle means that
the land records maintained reflect the ground reality. The essence of curtain
principle is once the title is given it is indefeasible and rights of the
current holder cannot be questioned due to defects in past history. Lastly, the
principle of Single Agency means that a single authority would be responsible
for maintaining the records.
The
preparation of such a register would open a can of worms as the current records
are archaic and it is difficult to establish the ownership of each and every
property, especially in rural India. Rajasthan has taken the lead in
land titling in India.
It has followed the Torrens system and created an authority to maintain a
register of property which would vet the records and provide the titles for a
nominal fee. Interestingly, this system is applicable to property in urban
areas.Neverthless it is a good step in the right direction. This brings me to
the following questions,
§
Should
land titling be done on a mission mode or in a gradual way?
§
What
about the cases where no proper chain of documents is available? How will
titling be done?
§
How
can it be scaled from urban areas into the countryside?
§
Can
we start the land titling of new multi storied flats where the property has no
past history?
References
[2]Reforming
India’s Land Titling System by Gulzar Natarajan
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