Selling Leasehold Property vs Freehold Property

Before beginning the process of transferring property ownership, you, as the seller, must determine whether it is freehold property or leasehold property. This is important because the type of property will affect the selling process. Before we get started, let’s talk about what leasehold and freehold properties mean.

By definition, a freehold property is not controlled by anyone other than its owner. So, the owner has full ownership and can use the property for any reason (renovate, give it to someone else, or sell it), as long as they follow any local rules. Also, if the owner of a freehold property wants to sell it, they don’t need permission from the government and the process is pretty simple. Because the property title is permanent, most buyers prefer freehold properties to leasehold ones.

You can easily sell your property by making a sale agreement with the buyer and then signing and registering a sale deed at the office of the Sub-Registrar of Assurances. The intro read about this process in detail, click here. (how to get your property registered)

Contents

• Freehold Property

• How to Sell a Freehold Property?

• Selling: leasehold property vs freehold property

• Leasehold Property

• How to Sell Leasehold Property?

As the name suggests, in this case, the land on which a building is built is leased from a government agency that works on development. The land is rented out to someone else for a certain amount of time, which can be anywhere from 30 years to 999 years.

The future of apartment complexes built on leasehold land is uncertain because it depends on how much the housing society pays to renew the lease contract. Also, it gets harder for buyers to get loans from banks as the lease period for a property nears its end.

The buyer’s lawyer will write up a “Sale Agreement” or “Agreement to Sell,” which will include all of the terms and conditions of the sale. The lawyer will send you a draught of the sale agreement for your approval. After that, you and the other party can go to the office of the Sub-registrar of Assurances and register the sale agreement. Click here. (how to get your property registered)

Click here. (how to get your property registered) Unless something else is agreed upon, the buyer will pay the stamp duty and registration fees.

You and the buyer will also need to get a “No Dues and No Objection Certificate” from your housing society. Make sure you don’t owe society any money for maintenance or anything else. Transfer fees are also charged by housing societies. Depending on the type of housing project (low-income, middle-income, or high-income), these fees can range from Rs 10,000 to Rs 25,000. Most of the time, the buyer pays these fees. They will need copies of both parties’ IDs and their signatures on the application form. They may also ask for a copy of the sale agreement.

After getting the “No Dues and No Objection Certificate,” a request for the “Memorandum of Transfer” must be made to the government agency that owns the land and is the lessor. This is written permission from the relevant authority for you, the owner of the leasehold property, to give your ownership rights to the buyer.

The application form can be picked up at that authority’s office or on its website (if available). The IDs of both the buyer and the seller must be attached to the application form, as well as a copy of the No Dues and No Objection Certificate from the housing society.

The buyer has to pay between Rs 2,000 and Rs 9,000 per sq. m. in fees to get the Memorandum of Transfer. These fees vary by area. The total charge is found by multiplying the transfer fee per square metre by the property’s size in square metres. You can find these rates by going to the office of the sub-registrar of assurances in your area. In plotted developments, the transfer fees depend on how wide the road is where the property is. Also, according to the master plan, the transfer fees are higher for plots that face the green belts.

After you fill out the application, you and the seller may get a date when you both have to be at the government office on that date. The right people will ask you if you want to give the property to the buyer and other questions along those lines. After this, it will take one to two weeks for you to get the “Memorandum of Transfer.”

After the buyer pays you the full price for your property and the required stamp duty, the buyer’s lawyer will write up and print the sale deed. After you and the buyer sign it, the sub-registrar in the office of the Sub-registrar of Assurances will look over all the paperwork and sign the sub-lease deed. The registration fees will then be paid by the buyer.

After one to two weeks, the sub-office registrar will give the buyer the original registered sub-lease deed, which the buyer will keep. As the seller, you should make a copy of each page of the sublease deed for your own records.

Keep in mind that this process and the documents that are needed may be different depending on the state and city where your property is. For example, if you, the owner of the property, bought it from the original seller with an irrevocable Power of Attorney (POA) instead of a registered lease deed, you will need this POA during the selling process. So, if you want to sell a leasehold property, it would be best to talk to a real estate agent in the area and a lawyer who handles property transactions.

Disclaimer: The opinions shown above are mainly for informational reasons and are based on market research. Deal Acres is not responsible for any actions made as a result of relying on the provided material and makes no representations as to its accuracy, completeness, or reliability.