By Accommodation Times Bureau
These days’ people are quite confused between Freehold property and Leasehold
property. In real estate, the words Freehold and Leasehold are very important. These
word the status of one’s ownership. Both the words applies to all sort of properties- a
plot, a building constructed on that plot, flats by different authorities, Group housing
society flat, Independent floor, etc.
Meaning: A type of property wherein the ownership is transferred temporarily to the
owner. It could be for few weeks, few months, few decades or few years. Generally, a
property is leased for 99 years. After the duration of the lease is over, the ownership
automatically gets transferred in the name of the first party. In this manner, the title of the
property cannot be mentioned as clear.
Registration: The deal of property will be registered through the medium of Deed of
Lease. The registration of the deed is done on the name of the buyer. Once the duration
of the lease is over, Renewal of the lease becomes necessary to continue occupying the
land. Hence, a leased property cannot be sold but utilized by the mean of deed of lease.
Re-sell: No lease hold property can be sold directly to a third-party. Firstly, it’s necessary
to acquire permission from the first party. For that a nominal amount of fee is to be paid.
Lease hold property cannot be directly sold with Deed of Sale. Therefore, to transfer the
rights of ownership means like General Power of Attorney, Special Power of Attorney,
Agreement to Sell, Will, etc. are used. Some of them are to be re-registered and some are
also accepted without registration.
Attention: Before dealing in terms of General Power of Attorney, one should consult a
lawyer to understand the Pros and Cons in detail. If there are any conditions put forth by
the main owner regarding the property, it will be mentioned in the deed. Breach of any
terms and conditions will lead to its cancellation automatically.
Free Hold Property:
Meaning: A type of Property whose ownership rights are for an undefined period of time
or forever or the rights are transferred for the lifetime. In India, maximum properties
have a free hold title. But, in Delhi maximum properties belong to the Government so
there’s a maximum trend of lease hold property. The title of the property is said to be
clear in such cases.
Re-sell: Free Hold properties can be sold to third parties. There is no restriction over that.
For this, a sale deed is signed by the buyer and hence registered with the Registrar.
Attention: Such deals are carried through the medium of General Power of Attorney or
Conveyancer or Deed of Sale. Also, duties are to be paid on the deals. Maximum Banks
and Housing Finance Companies prefer to give loans for Free Hold Properties rather than
Lease Hold Properties. Before buying the property, it is advisable for the buyer to ask for
papers pertaining to the Title. It is necessary for a Free Hold property to have a
Registered Deed of Sale or Registered Conveyancer. And for the Lease Hold Property,
papers like Deed of Lease and Power of Attorney are required.