News: Indian mall owners find going tough in land deed muck

(TT 07/06/2006) Mumbai - Mall owners and retailers are finding their expansion plans badly stymied by the ever growing problem with dodgy title deeds.

“Every state has its own rules regarding land title. This does not come under the central government. As a result, it is very difficult for us mall developers to get good quality land with clear land titles,” Yogesh Samat, CEO of K. Raheja-promoted Inorbit Malls Pvt Ltd, said.

The problem is not just restricted to mall developers, say Shishir Baijal, MD and CEO of Pantaloon-promoted Kshitij, the real estate venture fund.

“We cannot get into a land that does not have clear title. We are a real estate fund and cannot get into any kind of legal hurdles in future that could emerge as a result of unclear title. As a result, sometimes we have to let go of very good properties. The problem is more rampant in the northern parts of the country,” he added.

The problem in the North is more acute because most of the land there was agricultural and procured from farmers. “Therefore, the legal titles are not clear,” Baijal added.

The problem has magnified as most mall developers are looking beyond one or two cities to a pan-India presence.

“The laws regarding land titles differ from city to city. Added to that is the deterring Urban Land Ceiling Act in Mumbai,” said Samat.

The company is currently in the process of spreading its wings across cities like Baroda, Nagpur, Pune, Bangalore and Mysore to name a few.

And it is not that the government is not aware of the problem, as Niranjan Hiranandani pointed out.

“The issue about unclear land titles was raised in the national housing policy in 2005, which had envisaged that certain processes should be put in place that can help the buyer verify the land titles. The government is aware that such a problem exists, but a lot needs to be done in this case,” said Niranjan Hiranandani, MD, Hiranandani Constructions Ltd.

There is some hope though. Some cities like Hyderabad in Andhra Pradesh and Thane in Maharashtra have taken the initiative to computerise all land records.

“This brings in more transparency in the system because every time a buyer wants to check the land records one can just go online and check. But, more states should take the initiative. One of the biggest factors that is hampering growth in real estate today in India is definitely lack of transparency in land titles,” said Anuj Puri, managing director, Trammell CrowMeghraj.