Freehold land: A boon for consumers and developers

The proposed land ownership policy in Uttar Pradesh where land falling under the development authorities of Noida, Greater Noida and the Yamuna Expressway can be converted to freehold land is a positive sign for both consumers and developers.

The development authorities too, stand to benefit with their revenue generation as they would not need to get into the vicious circle of collecting pending dues. We have already seen the benefits of the 'free hold' land policy in areas under Delhi Development Authority, Ghaziabad Development Authority and Awas Vikas Parishad.

To understand the difference, leasehold properties (plot/built-up) are those in which perpetual leasehold has been granted by the title, paramount in favour of the lessee. In such properties, the title paramount, i.e. President of India acts through authorities such as the Delhi Development Authority or the Land and Development Office. Leasehold properties are not freely transferable. Depending upon the covenants of the lease deed, prior permission of the lessor is required to transfer the property. One is required to pay charges such as 50 per cent of the unearned increase and conveyance.

Freehold properties are those where title paramount has conveyed the property in favour of the purchaser, by conveyance/sale deed with no restriction on the right of the holder of the property to further transfer the property. Record of ownership of the freehold property, can be ascertained from the office of the sub-registrar. It can be transferred by registration of the sale deed.

As of now all land under development authorities of Noida, Greater Noida and Yamuna Expressway are allotted on lease. Consequently, builders or individual buyers in these areas are not the actual owners. Even developers who invest huge amounts on developing infrastructure like buildings, roads and other facilities can only sub-lease the land after taking the 'No Objection Certificate' (NOC) from the government.

... contd.

ALSO READ

Watch out for those offers, they can be risky

How to handle home loan defaults

Senior living comes of age

Gold takes a beating, will property prices follow?