Title Deed and EM with Laminated Title Deed
Title deed is a deed constituting the evidence of a person’s legal ownership of an asset or property. Deed represents an instrument containing details of legal transfer, bargain or contract. The term title deed is normally used to represent the ownership in respect of an immovable property.
What are the different types of title deeds?
The term title deed in respects of immovable properties denotes
a. original of registered sale deed, partition deed, settlement deed etc
b. Probated will
c. Certificate of sale issued by a court or similar authorities
d. Certificate of sale granted by revenue authorities under powers vested on them
e. An instrument of partition made by a revenue officer under his specific authority and
f. Document evidencing grant of land or immovable property by the Government
What is the importance of title deed in bank loans?
The three types of mortgages that are commonly entertained by banks and financial institutions for securing the credit extended by them are simple mortgage, English mortgage and equitable mortgage. The most commonly adopted form of mortgage by banks is equitable mortgage or mortgage by deposit of title deed. In this method of mortgage, delivery of title deed representing ownership on an immovable property by the owner or his agent in a notified town with the intent to create a security interest thereon for a debt, completes the mortgage formality. Delivery of title deed is an important component in creation of mortgage.
What is meant by a laminated title deed? What are the risks associated with lamination?
Lamination is a process used to preserve documents for longer period. People resort to lamination of mark sheets, title deeds, birth certificate, convocation certificates etc to improve strength, appearance and prevent damage.
With the emergence of colour photocopies, it is possible to create an exact replica of the original document in simple and cost effective manner. When a document is laminated, it becomes difficult to distinguish between original and duplicate. Recipients adopt various methods to ascertain genuineness of documents and these techniques may not work on laminated documents. This may lead to rejection of such documents. Further, de-lamination may cause damage to the document.
Do banks accept laminated title deeds for creation of equitable mortgage?
Banks haveexperienced many frauds based on fake documents, colour copies of title deeds, laminated deeds etc. These are occuring despite adopting best practices to prevent frauds. It is a difficult for banks to genuineness of documents when it is laminated. Further, fraudsters can create equitable mortgage with multiple banks easily by delivering laminated colour copies of title deeds. Creation of documents with fake documents or colour copies will create impediments for banks if they have to resort to recovery measures. For this reasons, they do not accept laminated title deed for creation of equitable mortgage.
However, in exceptional circumstances, where the borrower is of high creditworthiness, unquestionable integrity and reputation, bank may accept laminated title deeds subject to laid down norms, which may vary from bank to bank.
What are the precautions taken by banks while accepting laminated title deeds?
As a practice banks do not accept laminated title deeds. However, in exceptional circumstances, banks may accept laminated title deeds subject to higher level approval and adherences to laid down norms. Practices adopted by some of the banks in exceptional circumstances are –
a. Certification of genuineness by advocate
b. Submission of Notarized Affidavit by the borrower/mortgagor confirming that that the laminated title deed is original and that there are no subsistingmortgages/encumbrances over the property offered as security.
c. Publication of notice in new papers by the borrower/mortgagor about the intention to create mortgage and to inform complaints, if any to the lending bank.
