Property Demat Account - How a Demat Account for Land Functions | Motilal Oswal
Property Demat Account - How a Demat Account for Land Functions | Motilal Oswal

Demat Account for Land All You Need to Know

Property disputes are notorious for being a thorn in the side of the country. While property-related litigation can be dragged on extensively, clogging up the courts, property disputes also result in land being left unused. This results in capital being underused, as the opportunity costs pile up. In India especially, unclear information on the correct owner leads to an increase in disputes. As a result, the government has considered the implementation of a property Demat account.

In this article, let's take a look at how a Demat account for properties functions, and the various benefits and drawbacks.

Demat Account for Land

Currently, if one wishes to trade on the stock market, they are required to have a Demat account to do so. This account stores the stocks they have purchased, and all their details as well. For instance, if an individual owns 1000 shares of said company, those shares are registered in the Demat account that is unique to them, making it impossible to dispute ownership.

A property Demat account functions in a similar way. The only difference is that instead of listing the purchase of stocks, it lists the purchase of the property.

How does this work?

Let’s say, for instance, an individual has a home in one city of the country, alongside two other holiday homes at the outskirts of the city. In addition to this, they also own some plots of land that they have leased out or are perhaps vetting buyers for the property. A online demat account for land will list all these properties in the name of the individual. If they acquire new property or sell existing ones, then these changes will also reflect in the Demat account.

One of the most prominent benefits of having a demat account for land is that it almost completely eradicates the problem of ownership disputes. If a given property is listed in someone’s Demat account for properties, then no other individual can claim ownership. The second problem a Demat account for land solves is that of land property fraud. With stringent records of ownership, there is no room left for property or home loan fraud.

On the flip side, however, some argue that the property market has been on the decline since 2014, seeing a fall of about 25% to 30%, the announcement of the requirement of a Demat account for land might catalyse this decline further.

Conclusion

Given the history of property disputes, property and home loan fraud that the country has been grappling with, a Demat account for the land is likely to streamline the real estate sector, ridding it of deviant actors. With a Demat account for land, you can keep strict records and proof of property you have bought, own and sold. This also allows authorities to confirm ownership if any disputes are raised exponentially quicker, eradicating the need for long litigation battles. This database of property ownership follows a similar concept to a Demat account for shares, simply applied to the purchase and sale of immovable property.

Related Articles: Want to Open a Demat Account? Here's What You Should Know | Factors to Keep in Mind While Opening a Demat Account | Documents Required for Opening a Demat Account | 10 Points to Remember when Operating your Demat Account | Importance of Monitoring your Demat Holdings

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