How to convert a property from leasehold to freehold
In the case, a leasehold property has been purchased or in the event a leasehold property has been inherited, the following steps can be considered to convert the leasehold property to a freehold one.
Converting the property:
Earlier, numerous plots, properties and apartments were sold by government authorities on the basis of a leasehold. Any further transfer of ownership of such properties depends upon their respective lease periods.
On the subject of someone who has purchased a leasehold property and desires to convert it, Sumit Jain, CEO of a real-estate portal CommonFloor.com says: “If there is an opportunity, go ahead and convert it”. Such conversion is possible by outright purchase of the leasehold property from the owner of the same, if he is willing to do so”.
The conversion process:
In the case, the government owns the leasehold property, then the lessee would need to apply for conversion with the respective authority. From time to time, the government keeps releasing various schemes to convert leasehold properties into freehold properties. Thereby, through the process of ‘conveyance’, numerous allotees who were lessees became owners.
While purchasing all the rights to a leasehold property, the lessee should first obtain a search report by subjecting the property to a search by a competent lawyer, in the case it is the private property of an individual. Thereafter, a sale agreement needs to be prepared and executed by both the vendor as well as the purchaser.
It is then followed by the preparation of the final conveyance deed on a non-judicial stamp paper of appropriate value based on the sale consideration.
The respective locality office of the registrar or sub-registrar then registers the conveyance deed. After the registration is completed, the property is required to be mutated in the purchaser’s name, thereby incorporating the name of the purchaser within the books of the local civic body.
Documents required:
Search report, sale agreement along with the original sale deeds are prerequisite to the sale or purchase of the property.
However, says Jain, “if the leasehold property is a government property, permission from the concerned department(s) and clearances from certain other statutory bodies/departments/authorities, such as environmental clearance, clearance from fire department, defense, urban land ceiling and so on may be required”.
