Title and Construction Insurance Under RERA: What Bengaluru Buyers Should Ask
Section 16 of the RERA Act requires promoters to obtain insurances notified by the government, including cover for land and building title and construction, and to pass the benefit to buyers. Here is how a Bengaluru buyer can ask the right questions.
Every Bengaluru buyer has heard a version of the same story: a project on the city's edge, a title dispute that surfaces years after booking, and buyers who did everything right but still end up in court. Title verification reduces that risk. It does not remove it, which is why the Real Estate (Regulation and Development) Act, 2016 included a section that most brochures never mention.
Section 16 of the Act deals with insurance of the real estate project. It contemplates insurance in respect of the title of the land and building and in respect of construction, paid for by the promoter, with the benefit passing to buyers. This guide reads Section 16 from the Act, explains the condition that decides how far it applies, and lists the questions a Bengaluru buyer should ask.
The short answer. Under Section 16(1) of the RERA Act, the promoter shall obtain all insurances notified by the appropriate government, including insurance in respect of the title of the land and building and in respect of construction. The promoter pays the premium and charges, the insurance stands transferred to the benefit of the allottee when the agreement for sale is signed, and the documents are handed to the association once it is formed. The trade-off: the duty is tied to what the government has notified, so the practical protection for your project depends on what has been notified in your state, and you should ask rather than assume.
What does RERA Section 16 say about insurance?
Section 16(1) of the Real Estate (Regulation and Development) Act, 2016 in its Gazette text says the promoter shall obtain all such insurances as may be notified by the appropriate government, including but not limited to insurance in respect of the title of the land and building as a part of the real estate project, and the construction of the real estate project.
Section 16(2) makes the promoter liable to pay the premium and charges for that insurance, and to pay them before transferring the insurance to the association of allottees. Section 16(3) says the insurance shall stand transferred to the benefit of the allottee or the association of allottees at the time the promoter enters into an agreement for sale with the allottee. Section 16(4) says that on formation of the association, all documents relating to the insurance shall be handed over to it.
Read together, the design is clear. The promoter buys and pays for the cover, the benefit attaches to buyers from the agreement for sale, and the paperwork ends up with the association that will represent buyers after completion.
Why does the government notification matter?
The opening words of Section 16(1) are "all such insurances as may be notified by the appropriate government". The section therefore works through notification: the insurances the promoter must obtain are those the appropriate government notifies, with title and construction cover named as examples the notification can include.
For a buyer, that means the existence of Section 16 is not, by itself, proof that a particular project in Bengaluru carries title or construction insurance. What the promoter must obtain depends on what has been notified for the state. The sensible approach is to ask the promoter directly whether any insurance under Section 16 has been obtained for the project, and if so, to see the policy details.
If the answer is that nothing has been notified or obtained, that does not make a project unsafe. It means the title protection you have comes from verification rather than insurance, and the work of checking the title chain, encumbrances and approvals stays with you and your lawyer. Our guide to the mother deed and title chain in Bengaluru covers that verification in detail.
How does Section 16 fit with your other RERA protections?
Insurance is one layer among several that the Act provides around title and construction. The table below places Section 16 alongside the related provisions a Bengaluru buyer is likely to rely on.
| Protection | Where it sits in the Act | What it covers |
|---|---|---|
| Title and construction insurance | Section 16(1) | Insurances the government notifies, including title of land and building and construction |
| Who pays the premium | Section 16(2) | The promoter pays premium and charges before transfer to the association |
| When the benefit reaches you | Section 16(3) | At the time of the agreement for sale with the allottee |
| Title declaration at registration | Section 4(2)(l)(A) and (B) | The promoter declares legal title and that the land is free of encumbrances, or details them |
| Defects after possession | Section 14(3) | Defects reported within five years of handover are fixed free within thirty days, or compensated |
There is also a direct remedy for title problems that does not depend on insurance at all. Section 18(2) says the promoter shall compensate allottees for any loss caused due to defective title of the land on which the project is being developed or has been developed, in the manner provided under the Act. It adds that a claim for compensation under that sub-section shall not be barred by limitation under any law in force.
That last line matters because title defects can surface late, sometimes years after possession. Under Section 18(2), the passage of time alone does not shut the door on a compensation claim against the promoter. Insurance under Section 16, where it exists, adds a second source of protection; Section 18(2) is the one the Act gives every allottee regardless.
The declaration under Section 4(2)(l) is especially relevant. When applying for registration, the promoter must declare that it has legal title to the land, with authenticated documents if the land is owned by another person, and that the land is free from all encumbrances or give details of the encumbrances. That declaration is a statement you can read and compare against your own checks.
What should you ask the promoter about insurance?
Keep the questions specific and in writing. Ask whether the project has any insurance obtained under Section 16 of the RERA Act, and if so, what it covers: title of the land and building, construction, or both. Ask for the insurer's name, the policy number and the period of cover.
Then connect the answer to your own transaction. Section 16(3) says the benefit stands transferred to you at the time of the agreement for sale, so ask how the policy records that transfer, and whether your agreement refers to it. Ask how the policy documents will be handed to the association under Section 16(4).
You do not have to rely on the sales team alone for the title picture. Section 11(1) requires the promoter to enter the project details provided under Section 4(2) on its web page on the regulator's website for public viewing, and Section 4(2)(l) is where the title and encumbrance declaration sits. Read what has been filed for the project, note any encumbrances the promoter has disclosed, and ask your lawyer to compare them with the encumbrance search on the land.
If you are comparing projects, put the same questions to each developer. For a large project such as the one in our review of Godrej Woodland on Sarjapur Road, clear written answers about insurance, title and approvals let you compare like with like.
What does construction insurance not replace?
Construction insurance, where it exists, deals with risks during building. It does not replace the promoter's own duties under the Act. Section 14(3) still requires the promoter to rectify structural and workmanship defects brought to its notice within five years of handing over possession, without further charge and within thirty days, failing which allottees are entitled to compensation. Our explainer on the five year structural defect liability under RERA covers how to use that right.
Likewise, title insurance, where it exists, does not replace verification. A policy pays out under its own terms and exclusions, while verification aims to stop a bad title reaching you in the first place. Treat insurance as a backstop, and verification as the main defence.
Finally, keep the policy documents in mind at handover. Once the association is formed, Section 16(4) says the insurance documents go to it, so your association committee should ask for them along with the other handover documents.
What should a Bengaluru buyer do before booking?
A few written questions turn Section 16 from a line in the Act into something you can check. Use this checklist:
- Ask the promoter whether any insurance under RERA Section 16 covers the project.
- If it does, ask what it covers, the insurer, the policy number and the period.
- Ask how the benefit is transferred to you at the agreement for sale.
- Read the promoter's title and encumbrance declaration filed for registration.
- Carry out your own title, encumbrance and approval checks with a lawyer.
- Keep copies of any policy details and the promoter's written replies.
- Remind the association to collect the insurance documents at handover.
The answers will rarely decide a purchase on their own. They do tell you how much of the title and construction risk is covered by someone other than you.
What do Bengaluru buyers ask about RERA title and construction insurance?
Does RERA require builders to insure the title of a project?
Section 16(1) of the RERA Act says the promoter shall obtain all insurances notified by the appropriate government, including insurance for the title of the land and building and for construction. What a promoter must obtain therefore depends on what the government has notified, so ask the promoter directly.
Who pays for insurance under RERA Section 16?
Section 16(2) makes the promoter liable to pay the premium and charges for the insurance, and to pay them before transferring the insurance to the association of allottees. The buyer is not named as the payer of these premiums in the section.
When does the insurance benefit pass to the buyer?
Section 16(3) says the insurance stands transferred to the benefit of the allottee or the association of allottees at the time the promoter enters into the agreement for sale with the allottee. Section 16(4) says insurance documents are handed to the association once it is formed.
Does title insurance replace a legal title check?
No. Insurance, where it exists, pays under its own terms, while verification aims to stop a defective title reaching you. Read the promoter's title and encumbrance declaration made for registration under Section 4(2)(l), and carry out your own title and encumbrance checks with a lawyer.
Last updated 2026-10-17. PropNewz Team.
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