roperty Tips: Leasehold versus freehold property

Submitted by admin on November 3, 2009 – 10:26 amNo Comment

It is a universal truth that the owner of a property with general power of attorney (GPA) will one day try and convert his property as a freehold property. But, it is equally true that despite this fervent wish, an average owner of a property will think several times before applying in the concerned office for a freehold status of his property. The reasons are not too far to seek – red tape, bureaucratese and the tedium of submitting endless papers to concerned government departments. Even if your papers are complete, one will still have to ‘grease’ the palms of concerned officials to get even legitimate work done, bemoan so many hapless owners. Honestly speaking, you can consider yourself very lucky if you don’t face any hardship in order to convert your property. If you want to see the plight of all those who wish to convert their properties as freehold, then just visit the INA office of DDA. You would meet scores of people who can narrate their sad stories. As the government is considering bringing about legislation to create a regulator for realty sector to streamline the affairs, it can do yeoman service if it creates a singlewindow system for converting power of attorney properties into freehold. If we talk about total properties in both Delhi and NCR, both residential and commercial, more than 70% of them are sold on GPA. The titles of thousands of properties are not clear. While government is keen to regulate the very chaotic realty sector, it would do great service if it works on this area sooner rather than later. It goes without saying that a single-window system in all the states, which will ensure and clear the conversion cases within a stipulated time frame and minimum paperwork, will go a long way in improving the state of realty sector. “I strongly feel that the day government eases the process of converting the status of properties, it will be a Diwali-like day for all those with properties on power of attorney,” says Sunder Khatri, a Supreme Court advocate and expert on realty matters, adding: “Freehold property means a property which is in the absolute ownership of a person – right to possess, right to enjoy and right to dispose of the property. Whereas, leasehold property means a property in which the owner of the property has, in consideration of price either paid or promised, transferred a right to enjoy the property for certain time or in perpetuity, in favour of another person.”

They are not aware of the importance of a clear title. if you are buying a property. You just have to pay some fees. However. it has to ensure that a system is evolved whereby leasehold property owner change the status of his/her property without a long haul. Khatri says they are classified under the heads of residential.Those who are well-versed in the affairs of realty world say that during festival time people start their search for residential or commercial property. All these agencies require different kind of paperwork for converting the property and the worst part is that they have not made any effort to work for the benefit of the common man. Delhi Development Authority. Their customers somehow think that physical possession of the property is enough. They are keen to clinch the deal during these auspicious times beginning with the Navaratra. Waqf Board. There are many landowning agencies like the Land and Development Office. commercial. “I strongly feel that if government is really thinking to regulate the realty sector.” Jindal concludes. says while on papers it looks like a cakewalk to convert the leasehold property to freehold. Sunil Jindal. “Government has to take stringent action against even those builders who don’t sell their flats. The paperwork related to purchase of property is even more tedious than selecting the property itself. the Delhi government.” says Devender Gupta. the fact is one has to really put the nose to the grind wheel to complete this job. executive vice-president of PNB Housing Finance Bank Ltd. Unless government acts fast. agricultural and Lal Dora lands. and land governed by the Punjab Act. some builders will continue to harass people. Gupta has a very wise suggestion for all those who wish to buy a property. However. This issue has to be resolved on priority basis once and for all. It has been observed that while the leading builders hand over flats to their customers’ with clear titles. Jain says that he feels astonished when even educated people visit his office . floors and plots to innocent customers on clear titles. CEO of SVP Builders. they face unending hardships when they apply for bank loan or when they consider selling their properties. The auspicious time goes on till early New Year. some don’t do that. Delhi State Industrial and Infrastructure Development Corporation Ltd (DSIIDC). CMD of Century 21 India. then you must verify the title of the property at the office of the concerned sub-registrar. Such verification serves as a safeguard against potential losses due to fraud. According to him. misrepresentation or defects in the title. The last word comes from PK Jain. As far as freehold property is concerned. most people are not aware of the paperwork related to purchase of property. If we talk about Delhi. it is even more complex as land and property are classified under different heads when it comes to ‘type of property’ and also come under the purview of different landowning agencies. industrial.

and seek a loan to buy leasehold properties. still large chunk of people are not fully aware of the difference between leasehold and freehold properties. Unfortunately. .

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