Budget 2022: Need for digital infrastructure in the real estate space

The difficulty in transacting in real estate in India and the imperfections of title to land/property was always a major area of concern and may be viewed as the foremost constraints affecting the investment and growth of the real estate sector in India. With the restrictions/limitations placed on movement (local or otherwise) and physical operations of government offices as well as adjudicating bodies on account of the raging pandemic in the country has further aggravated the practical difficulties faced in real estate transactions as well as settling real estate disputes.

Keeping in view the above limitations coupled with largely justified apprehension of individuals vis-à-vis physical interactions, lack of adequate digital infrastructure in the country with respect to (a) recording and maintaining title documents and land records, which in turn is crucial for remotely conducting necessary title investigations before investing in or purchasing real estate, (b) registration of title documents and mutation of records, and (c) adjudication and settling of real estate disputes through dedicated RERA tribunals is a key area of concern.

Digitisation of title and land records is a key step in addressing the aforesaid issues as it lays the foundation for ensuring certified, complete, transparent and accurate record of land/property, which can be updated in real time and accessed by the public remotely through adequate virtual databases before investing in a real estate transaction. This will further encourage and facilitate remote title investigations, which in turn will reduce the possibility of disputes and the delay inherent in a more traditional (physical review of records) method for title investigation. Additionally, the cost efficiency that digitization will bring in is obvious.

The next step is achieving a robust system to facilitate virtual registration of documents relating to a real estate transaction to address the aforesaid issues. Having a robust and holistic virtual registration process is important not only for making property registration efficient and hassle-free with minimum physical contact but also for integrating land records and registration in real time. The physical/manual (non-computerized) registration process involves maintenance of paper copies of all the registered documents and requires physical presence of the parties executing such documents. This procedure often results in misclassification of documents, misrepresentation of facts, and other associated losses.

The government has, in the past, come up with several initiatives and programmes in respect of digitization of land records such as the Digital India Land Records Modernization Programme (replacing the National Land Records Modernisation Programme). The progress made in this regard has been considerable and has ushered tangible benefits in many states. These programmes also aimed for full computerisation of sub-registrar offices with adequate hardware, software, process re-engineering, staff training and connectivity with the revenue records maintenance system, banks, and treasuries. However, the construct, implementation, and accessibility of these programmes have not been considered sufficient to address the prevailing issues and remains inadequate to meet the rising demands of the present times.

Illustratively, many states are yet to fully digitize the land records (especially records relating to the period prior to early 2000s) and the databases setup are not adequately maintained and/or accessible. Further, the e-registration process is largely limited to online payment of stamp duty and registration charges and booking appointment for registration of documents. Unfortunately, even such limited application of the e-registration process is not uniformly implemented throughout the country. The present system does not provide for a holistic virtual (remote) registration process experience, where inter-alia, the parties can effectively carry out the entire registration of a document remotely.

The basic digital infrastructure essential for virtual adjudication of real estate disputes i.e., connectivity, hardware, software and staff training in many tribunals and adjudicating bodies across the country can be seen as inadequate and not at par with international standards, which delays the adjudication process and resultantly leads to inconvenience and loss to the individuals. A robust digital infrastructure will not only help the adjudicating bodies to resolve disputes in a hassle-free and efficient manner and avoid backlogs of matters but also restore faith of the individuals approaching the adjudicating bodies seeking speedy adjudication of disputes.     

In light of this, the need of the hour calls for favourable policies/schemes in furtherance of the already existing programmes and enhanced Budget allocation in the coming days to uniformly improve and revamp the digital infrastructure across the country in the real estate space to effectively facilitate remote title investigation, holistic virtual registration experience and speedy virtual adjudication of real estate disputes, which will not only benefit the real estate sectors and the stakeholders in large but also  transform India into a digitally empowered society and economy.

Views are personal. Jain is a partner, Cyril Amarchand Mangaldas; Iyer is associate, Cyril Amarchand Mangaldas.