Distressing news for the leased property holders in national capital – five times higher ground rent is to be paid to apply for freehold of properties. The rule will come into operation from April 1 and will be for the properties which have been leased out by the land and development office (L&DO) at the prime locations in NCR under Union Urban development ministry.
Moreover, those who have already converted their leasehold properties in the freehold ones between 2000-2017, will also have to pay the revised rent, depending upon the year of the conversion approved. L&DO had not revised its land rent since 2000 while the capital could see the periodic revision of the land rates by DDA.
What is a Freehold Property?
The property that is completely free from any type of hold by any entity apart from the owner itself. Maintenance fees or any other such charges are not applicable on freehold properties. The owners are free to do anything with that property – rent out, sell out, lease out, beak it, or even leave it vacant. Whatsoever action for the property is being taken by the freehold property owner will be under legal constraints.
What is Freehold Conversion?
Generally, there are two types of properties owners – building owner and land owner. The land owners provide the land to the builder, developer, or businessman on lease upon certain terms and conditions to make or operate the building. The latter pays the ground rent, i.e., rent for leased land, to the land owners. The property thus, is called leasehold property and the owner can convert it to the freehold property by paying the freehold conversion charges that is fixed by the ministry. The process of converting the leasehold properties into freehold properties is called Freehold Conversion.