India’s Real Estate Sector Burdened By 4.4 Million Inheritance Disputes, Freezing $200 Billion In Assets

Mumbai: In a country where the real estate sector is a pivotal driver of economic growth, millions of properties remain unused, entangled in inheritance disputes. Recent estimates indicate that around 4.4 million properties across India are embroiled in such conflicts, tying up assets worth over USD 200 billion. This amount is nearly equivalent to 7-10% of the nation’s GDP, highlighting a significant missed opportunity for economic transformation.

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 Outdated inheritance laws and the lack of effective dispute resolution mechanisms exacerbate the issue, leaving properties in a state of legal “limbo.”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.

Stating that the value of property is in crores in a city like Mumbai, Adv Vinod Sampat, President of Cooperative Societies Residents Association, said, “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 the 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 in spite of the client having good prospects as regards winning the case.”

“We need to improve upon our laws. We also need to have speedy justice but due to 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,” he added.