Digitising the deed: New index tracks land records online, simplifying sales
Nearly three-fourths of Indian households’ wealth is invested in the real estate sector, yet accessing information related to land records is difficult as only a few states maintain digitized records. When you are buying a property—be it a house from the primary (from the developer) or secondary markets (properties on resale) or a plot of land—it is always advisable to cross-check and verify the documentation. However, in most states and Union territories (UTs), it is difficult to do so, in the absence of proper digitized records, especially related to disputes.
A new land record index, NCAER Land Record and Services Index (N-LRSI), will help you figure out how efficient the state in which you are buying a property is in terms of maintaining digital records. The index has been launched by the National Council of Applied Economic Research (NCAER), a New-Delhi based non-profit think tank of economics, and assesses the extent of digitization of land records across various states and UTs. Omidyar Network India, an investment firm focused on social impact, is financing the research.
Digitized land records can go a long way in easing real estate transactions in India. “Modernization of land records in digital format will smoothen transactions and reduce land and property disputes, effectively enhancing transparency regarding the maintenance of land records,” said Niranjan Hiranandani, national president, National Real Estate Development Council (Naredco), an industry body. In an ideal scenario, land records should be digitized, and should be comprehensive and reliable, he added.
“The ease of generating and using reliable digital land records can have considerable significance for India’s rapid economic growth through the better functioning of land markets and boost to investment,” said the NCAER commentary accompanying the index.
To evaluate the land records across the country, NCAER first launched NCAER Land Policy Initiative (NLPI) in April 2019.
NLPI’s broad objectives included gathering and analyzing information related to availability of land records, the quality of these records, the online availability of legal documents related to land and so on. The next step was to compile data related to land and provide rankings to each state based on that data. “Ranking will help each state to know where they stand in terms of providing land records and ease of property transaction. Simultaneously, it will develop competitive instinct between states to enhance their services, processes and perform better. Eventually, it will help property owners, buyers and real estate investors,” said Deepak Sanan, project lead, NCAER. The think tank will also offer solutions to states to improve their land record database digitally, he added.
To build the index, NCAER collected information, data and status under four broad heads—textual records (written land records), spatial records (cadastral maps), registration and quality of land records—each having its own weightage.
Textual record having 20% weightage was further divided into two aspects—digitization of records of rights (RoR) and availability of legal usable copies of RoRs. Spatial records also carry 20% weightage, under which information related to digitization of cadastral maps and availability of legally usable copies of such maps. The third head—registration—again has 20% weightage and is based on information such as public entry of data, availability of circle rate information, mode of stamp duty and registration fee payment, digital attestation of documents by the sub-registrar’s office and online delivery of registered documents. The quality of land records have the highest weightage of 40% and includes aspects like how states update ownership records, the extent of joint ownership and details of land use, land area and recording encumbrance (mortgages and legal cases).
On the basis of the points scored, Madhya Pradesh, Odisha, Maharashtra, Chhattisgarh and Tamil Nadu are the best performing states with scores between 60 and 75 points on LRSI. N-LRSI gives scores between zero and 100, where 100 denotes the best performance. West Bengal, Jharkhand, Rajasthan, Telangana, Andhra Pradesh and Uttar Pradesh are in the 50-60 points category. For registration, Maharashtra emerged as the leader, while Jharkhand, Odisha and Chhattisgarh were the front-runners on the quality of land records.
In four states—Mizoram, Nagaland, Meghalaya and Arunachal Pradesh—land records in a written or digitized form are only available for a negligible proportion of their respective areas.
According to the index findings, as many as 28 states and UTs have digitized RoRs that can be accessed online; and in 19 states and UTs, the extent of digitized records is stated to cover more or less the entire area. Further, legally usable digitally signed copies of RoRs are available to stakeholders in nine states and UTs. However, in as many as 10 states you still need to physically visit the registrar’s office to collect copies of RoR, if required.
When it comes to the details of encumbrances such as a mortgage, liability or claim against a property, which are often the primary cause of disputes, none of the states has the full details aligned to land records. According to NCAER data, land-related disputes in India account for about 60-70% of all civil litigation. About 25% of all cases decided by the Supreme Court involve land disputes, the data said.
In the second phase of this initiative, NCAER will try to assess how ease of using land records benefits buyers through a household survey planned for later this year.
As of now, non-availability of proper land records is a big concern for not just property buyers but also real estate developers in many states. The index may help buyers as easy availability of land records can smoothen transactions and reduce disputes.