Buying land with clean title, adequate size and clear access is very complex in India

The core issues that surround the acquisition of land in India are more complex than those related to built-up property.

Some of these are:

  • Litigations due to inheritance
  • Multiple sales; not all recorded
  • Land pawned to lenders
  • Fragmented holdings
  • Land grants by government
  • Land ceiling laws
  • Resettlement laws

As things stand now, land acquisition has become a means for various middlemen to make a lot of money.

This is because the regulations and complexities related to acquiring land provide huge arbitrage to such people.

If the government starts to simplify the process, middlemen can be eliminated, thus reducing the cost arbitrage and passing the benefit to actual land owners. Until that happens, fool-proof deals in land will remain scarce.

For the record, a good deal is one where one can buy, in one go, a clean title property that complies with all government plans and stipulated usages.

You can avoid bad land deals by using experienced lawyers for the transaction, doing a detailed due diligence, and employing the services of a reputed real estate consultant with in-depth market knowledge.

When it comes to land acquisition, there is no question of a free lunch or short-cuts.

If something about a land deal seems out of whack, then it can be taken for granted that there is an issue. Fraud occurs because people buy land without complete due diligence, which leads to acquisition of land with title issues.

In the morass of problems related to land acquisition, developers face a huge challenge in obtaining a clean, bankable title to a contiguous land parcel of sufficient dimensions to develop projects. Often, the only way out is via land pooling.

This is a process wherein a number of land owners agree to pool their land holdings and then develop them together.

Successful cases include Amanora and Magarpatta in Pune, where various land owners pooled their land and developed townships to service the growing residential and office real estate needs of Pune's IT industry.

All the original owners have a stake in the developing company.