India's Real Estate Sector Tangled in 4.4 Million Inheritance Disputes, Freezing $200 Billion in Assets
Mumbai: In a country where the real estate sector is a critical component of economic growth, millions of properties lie unused, entangled in inheritance disputes. Recent estimates show that around 4.4 million properties across India are locked in such co
Real EstateInheritance DisputesPropertyEconomic GrowthLegal BattlesReal Estate MumbaiOct 30, 2024
Inheritance disputes in India are vast and complex. The legal battles over these properties can span decades, with the average duration of a property-related court case lasting around 15 years. These prolonged disputes are more than just legal issues; they represent a significant portion of India's real estate that is effectively frozen.
Cultural and legal complexities underpin these inheritance disputes. Ancestral properties passed down through generations often result in multiple heirs contesting ownership, making clear title determination challenging. Outdated inheritance laws and the lack of effective dispute resolution mechanisms exacerbate the issue, leaving properties in a state of legal “limbo.” This problem is especially acute in urban areas like Mumbai and Delhi, where high property values intensify legal battles.
“The economic implications of these disputes are profound. India faces an urban housing shortage of approximately 18.78 million units. The properties tied up in inheritance disputes could significantly alleviate this deficit. Additionally, these unproductive assets lead to substantial fiscal losses for both local and national governments, as missed property and transactional taxes accumulate,” said the COO of CREDAI-MCHI, Keval Valambhia.
The unresolved status of inherited properties also affects the real estate market, creating an artificial supply shortage. This drives up property prices and rental costs, reducing affordability and limiting access to housing. The value of property in cities like Mumbai can be in crores, and it is very easy to create legal disputes pertaining to property. Experience has shown that by delaying a transaction or when the matter is in litigation, the person in possession of the immovable property has an upper hand. For example, if a member of a society has expired and legal heirs challenge the will, the litigation can easily go on for 10 years. This creates a situation whereby the legal heir who is the occupant of the premises stands to gain. It is common knowledge that many times lawyers suggest resolving the issue amicably, even if the client has good prospects of winning the case.
“We need to improve our laws. We also need to have speedy justice, but due to the lack of funds, rendering of justice gets delayed. No wonder we say justice delayed is justice denied. People many times prefer to avoid courts and take a haircut. Our prisons are full of undertrials. There have been cases which have stretched more than 70 years,” added Adv Vinod Sampat, President of the Cooperative Societies Residents Association.
Frequently Asked Questions
How many properties in India are currently entangled in inheritance disputes?
Around 4.4 million properties across India are embroiled in inheritance disputes.
What is the estimated value of assets tied up in these inheritance disputes?
The assets tied up in these inheritance disputes are worth over USD 200 billion.
How long, on average, do property-related court cases last in India?
The average duration of a property-related court case in India is around 15 years.
What are the main cultural and legal issues contributing to these disputes?
Multiple heirs contesting ownership of ancestral properties, outdated inheritance laws, and the lack of effective dispute resolution mechanisms are the main issues.
What are the economic implications of these inheritance disputes?
These disputes lead to an urban housing shortage, increased property prices, higher rental costs, and substantial fiscal losses for governments due to missed property and transactional taxes.
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