How to Convert Leasehold Property to Freehold?

A leasehold property is often difficult to sell whereas freehold property sells quickly. This is one of the major reasons why people prefer to buy a freehold property or convert leasehold property into a freehold property. But the question remains, how to convert leasehold property to freehold? I will provide you with insights into the process. I hope you’ll find this helpful.

If the land is leased out to you by the government, you’ll have to follow a process. The Government comes up with various notifications and schemes from time to time to convert leasehold property to freehold. 

Let us take Delhi for example, here to get leasehold to freehold conversion, the procedure is as follows:

• Take the DDA Vikas Sadan brochure and fill the blue form if you are an allottee, green form if you have power of attorney or sale agreement.

• In the application form, enter the file number mentioned on the lease document.

• Submit the form and a copy of challan for conversion charges submitted at Central Bank of India or State Bank of India along with all the required documents.

• Indemnity bond attested by a notary.

• Demand-cum-allotment letter given by DDA

• Possession letter issued by DDA

• Identification proof (Aadhaar Card, Voter ID)

• Electricity bill, water bill, house tax receipt, ration card

• In case of mortgage, NOC from the mortgagee 

In case the property is allotted on lease by a non-governmental authority, then the conversion process is a bit different.

1. You will need to obtain the title search report of the property

2. After ascertaining that the property is good to convert, you will have to prepare a sale agreement.

3. Get the conveyance deed made and registered in the sub-registrar’s office

4. Apply for property mutation and pay the conversion charges as applicable.

In some states, the process for converting leasehold property into freehold has been moved online. You must check the official state websites to check the same.

I would always suggest that if you get an opportunity to convert leasehold property to freehold property, you shouldn’t let it go. Because you will be the actual owner of the property and have all the rights over that property. Considering this fact, I also converted my leasehold property to a freehold. Let’s see the process of conversion from leasehold to freehold.

Property’s process of converting leasehold to freehold:

You might have read and understood the above answer of Priety about the property conversion. She has explained very well about the property conversion in Delhi. But let me walk you through the general process for all the regions. 

• If the government holds the leasehold property, then you must file a conversion request with the appropriate authority. 

• You have to obtain the application form for conversion to freehold.

• The government releases programmes to convert leasehold homes into freehold properties on a regular basis. 

• When you want to buy all of the rights to a leased property, you should first get a search report by having the property inspected by a qualified lawyer. 

• Following that, both the seller and the purchaser must write and execute a sale agreement.

• The final conveyance deed is then prepared on non-judicial stamp paper with the desired value depending on the sale price.

• The conveyance deed is then registered at the registrar's or sub-locality registrar's office. 

• After the registration is finished, the property must be mutated in the purchaser's name, inserting the purchaser's name into the regional civic body's records.

Latest news about leasehold to freehold process:

The Maharashtra State Revenue Department has now revoked its decisions prohibiting the conversion of collector's land (Occupancy Class II holdings) to freehold ownership. The transfer of the collector's land to the occupiers of the land requires the collector's consent. There were claims that the conversion was being mishandled, thus the stay orders were issued near the end of 2020. About 3,000 Mumbai societies that live on collectors' land will benefit from the move.

This is the process of conversion from leasehold to freehold.

I checked out the posts written by Ms Preity and Mr. Aadar on how to convert leasehold property into freehold. But I also want to add a little information about this. Conversion charges from leasehold to freehold are different in every state and the process is also different. Let me give you a brief detail about the charges. 

I think the first question that will come to your mind is what are the charges for converting leasehold property into freehold property. Well, there is no specific answer to this question. Just like the price of a residential property differs when it is sold, converting a leasehold property to freehold also differs. There are a number of factors to convert leasehold property into freehold. Length of the lease, value of property, and the rental amount are some of the important factors that come into play. 

To convert a leasehold property into freehold the lessee has to acquire ownership of the property first. You need to possess important documents such as a search report, sale agreement, and sale deed. But if your property is on government leased land you need to seek permission from authorities. You need to get clearance from:

1. Environmental Department

2. Fire department

3. Urban land ceiling department

I hope you have some information about conversion charges from leasehold to freehold.

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I have gone through the above-mentioned answer by Tarun Bharwaj, and I completely agree with him regarding conversion charges. It is true that the length of the lease, the cost of the property, and the rental price are just a few of the variables at play. The price will be higher if your lease is not long enough. In Delhi, converting a property from leasehold to freehold entails paying conversion charges from leasehold to freehold in effect at the time the application is submitted.

By acquiring a brochure from DDA Vikas Sadan and completing the application form in the booklet, I was able to convert a DDA leased property to a freehold. You might also apply for the same position online as an alternative.

The agreement to sell must be recorded with the Sub-Registrar of Delhi in order to verify the legitimacy of a property conversion transaction. The DDA will also check documents like energy, water, and MTNL phone bills, ration cards, passports, voter I-cards, Aadhaar cards, driver's licence, and passbooks from nationalised banks with attached photographs to confirm that the applicant actually owns the property.

The Land Disposal Wing and Housing Wing of the DDA will handle the lease to freehold conversion when the documentation has been validated.

An applicant must pay the following fees in order to request the conversion of a leasehold property to a freehold:

• Frequently used conversion fees

• One-time lease renewal fee of Rs 1,000 per square metre

• Five times the amount that was in effect at the time of the lease's expiration will be charged as ground rent for each year following that date.

• Any unpaid debts owed on the property

• For allottees

On the consideration amount specified in the transfer deed, a stamp duty of 6% in the case of male members and 4% in the case of female members must be paid. One percent of the conveyance deed's total value is used to determine the registration fee.

The new conversion policy has been further liberalised by the DDA in the event that approved building plans are absent. In these situations, an applicant must provide an affidavit attesting to the absence of a sanctioned building plan.

Along with the affidavit, a copy of the building plan from a licensed architect is required. This plan must include all relevant details, including the Floor Area Ratio (FAR), the number of stories, and the size of the site's real plinth area. Additionally, the building's pictures and a copy of the house tax assessment order or the authority's approval of a permanent power connection must be submitted.

I would like to conclude here about conversion charges from leasehold to freehold DDA property in Delhi. I hope this helps:)

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Wondering how to convert leasehold property to freehold in Delhi? Here is the answer. It involves a legal process that can vary from one state to another due to differences in state-specific laws and regulations.

However, here is a general outline of the steps for how to change leasehold to freehold:

• Make sure that your property falls within the criteria established by the state government for conversion. It can depend on factors such as the type of property, the purpose of the lease, and the length of the lease period.

• You are required to obtain a No Objection Certificate (NOC) from the relevant authority, such as the land-owning agency or the local development authority. 

• Submit an application for the conversion of the leasehold property to the appropriate authority. 

• Pay the conversion fee. The amount can vary depending on the location and the property's characteristics.

• The authority will conduct a site inspection to verify the property details.

• Provide the necessary documents. It can include the lease agreement, property title documents, and any other records related to the property.

• After reviewing your application and documents, the authority will issue a conversion order if it approves the request. 

This is the basic process on how to convert leasehold property to freehold in Delhi.

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