Own report: Housing or commercial property is divided into two types, one is freehold property and the other is leasehold property. Freehold property is indefinitely free from the hold of any authority other than the owner. Leasehold property is usually leased for 99 years from the time the property is built.
In some cases the leasehold property is also given on permanent lease. The lease of the property is fixed and fixed at that time for 99 years. For example, if someone buys an apartment in 2015 and gets possession in 2022 and the builder took a lease from the state development or housing authority in 2015, that means the buyer’s lease will start in 2015 when construction of the property begins. This means that when the buyer gets possession of the property in 2022, he will have to calculate the lease period excluding 6 years and the duration will be 92 years.
When a state development authority grants developers area or land development or construction rights, they sell the said properties on a 99-year lease. And when the builder sells it to buyers (residential or commercial property), the buyers only own it for 99 years. At the end of the 99-year term, ownership is returned to the original land owner.
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Housing authorities such as DDA and NOIDA allocate residential flats or land on a 99-year or permanent lease. The purpose is to ensure controlled development. By leaving the property as leasehold, the authority is able to ensure control over the use and development of such resources. In case of violation of such conditions, they reserve the right to cancel the allotment / lease. It helps the authorities maintain the rules of concentration, the rules of use. In NOIDA, for example, floor-based sales of residential plots are not permitted and NOIDA authorities are able to control it because the properties are leased.
Once controlled development is possible, the authorities come up with a freehold conversion scheme and free the land and property from such control. The DDA comes up with freehold conversion schemes to convert such assets at different times. NOIDA authorities have not yet begun the freehold conversion but are likely to come up with such a project in the future.
If the term of the leased property is extended beyond 99 years, the buyers have to pay rent to the original owner of the land. Leasehold property is allowed to be renewed after expiration by paying a fixed fee. It is possible to extend the lease period up to 999 years by paying the price to the authority. Also, on the completion of 100 years of possession of the said property, it is directly converted into a freehold property.
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