Leasehold to freehold property conversion in Noida
The Noida Authority has said it may consider making residential properties freehold, a proposal which would have an impact on sellers, buyers and the real estate market.
All plots or flats in Noida are presently sold on leasehold basis. What this means is that the buyer is given the flat or plot on lease for 99 years and is required to pay a certain sum as lease rent to the authority.But under the freehold system, the buyer will get full ownership of the property.
Presently, buyers have to approach the authority for transfer, sale and purchase of property, apply for a no objection certificate when they have to sale or purchase a property. They may not have to do so if properties are made freehold.
Sale and purchase without the requirement for a no objection certificate from the authority would mean a faster economic cycle – buying and selling of properties will be faster, there will be more liquidity in the system and a single property will undergo more change of hands.
Under the proposal that the Noida Authority is considering, floor-wise registration, similar to Delhi, may also be allowed in case of plotted developments. At present, one can construct four floors on a plot but cannot executive a registry sale or purchase of each floor.
According to real estate experts, the floor-wise registry will benefit property owners as they will be able to transfer their properties to blood relatives without seeking approval or paying transfer fees to the authority.
“As of now, Noida Authority sells properties on a 99-year-lease. It charges an additional amount for renewal of lease. The major difference between a leasehold and freehold property is that today since the property is leasehold, the owner has to seek the Authority’s permission to sell and transfer the property,” said Sunil Tyagi of Zeus Law.