Freehold property will boost NCR’s market
Mar 18, 2014
Source : The Times of India


DELHI: There is good news for homeowners who bought flats on hire purchase basis but could not pay in time and are unable to convert their properties from leasehold to freehold as the Delhi Development Authority (DDA) has recently approved a fresh Penalty Relief Scheme.

Under this scheme, the DDA will offer property titles from leasehold to freehold with certain charges.

For this the maximum period for levy of misuse charges will be restricted to five years from the date of detection of the misuse. The DDA has offered 25% rebate to applicants and the scheme, open for six months, will also help those who wish to clear all their outstanding dues at one go.

Why freehold property

Experts say DDA’s decision to convert leasehold property into freehold property would give a big boost to Delhi’s property market and also bring the much-awaited relief to thousands of residents, especially in Karol Bagh, Daryaganj, and Paharganj areas.

The Mughal emperor Shah Jahan developed Shahjahanabad—now called Old Delhi—for a population of 60,000 over 600 hectares at an overall density of 100 people per hectare more than 350 years ago.

Today, Shahjahanabad forms a small district in Delhi, while
the national capital has grown many fold with 20 times that population. Old Delhi or the Walled City, though small in size, deals in wholesale bulky commercial activities and polluting industries with all types of mixed land use.

Delhi has a total area of 1,483 sq km with nearly two-thirds of the area already urbanized and the balance under development and construction based on various land-use polices like Urban Land Policy, Land Use Policy, Farm House Policy, PPP model, Transfer of Development Right (TDR), etc.

The old built-up areas prior to the partition of the country are Walled City of Delhi, Karol Bagh Area, Civil Lines Area, Lutyens’ Delhi, apart from 369 urban-rural villages and some other colonies.

In Delhi, of the total of 82,948.84 acres of acquired land, 75,609.84 acres has been used for residential, commercial, institutional, industrial, infrastructure (roads), and green area purposes, up to 2008.

Balvinder Kumar, vice chairman of DDA, says: “According to the urban land policy being followed by the DDA, land ownership is only of two types—freehold or leasehold; but the land use is of many types like residential, commercial, industrial, institutional, etc. Initially, the acquired land was on lease and getting proper ground rent from users but, slowly, we are converting these into freehold properties due to thousands of cases pending in government departments, which is holding up the realization of taxes. Thus the DDA decided that most of the land should be freehold.”

Ram Gopal Gupta, city policy planner with DDA, says: “There is no difference in the value of land, whether freehold or leasehold; the value is ascertained according to land use, which would be followed as per the master plans.”

Kamal Taneja, MD of TDI Infrastructure Limited, says: “DDA’s decision to provide relief to thousands of residents of Karol Bagh, Daryaganj, and Paharganj is very welcome and timely, as in many cases misuse charges have exceeded the cost of the property. This relief scheme will help people looking for the conversion of their properties into freehold.”

Rajesh Goyal, MD of RG Group, says: “Freehold properties make the ownership titles absolute, which will make the procurement of loans by way of mortgage easier. Making property freehold will bring in substantial money into Delhi’s realty market, as the credentials of the property become unquestionable. This will have a positive impact on the subdued sentiments of property buyers and other property transactions in the whole of the Delhi NCR.”

Rakesh Yadav, MD of Antriksh Group, says: “This policy is a very good source of revenue for the DDA and it can also update clean revenue records. Some civic authorities responsible for developing urban areas in Uttar Pradesh started allotting land to developers on a freehold basis long ago.”

Demand of freehold property in the NCR

Like the DDA, the Huda (Haryana Urban Development Authority) in Gurgaon and Faridabad, and the GDA (Ghaziabad Development Authority) are planning to implement freehold land ownership policy.

Once the new land ownership policy is implemented, buyers, developers, and even development authorities will be benefited, in terms of revenue generation. This would also cut procedural delays giving respite to developers and speeding up the execution of projects.

In Noida-Greater Noida, homebuyers and even builders are not the actual owners of the property for which they have invested huge sums of money. According the existing lease policy, flats and plots are subleased by the authorities concerned to buyers.

Land in these twin cities is currently allotted on a lease basis for 90 years. For this, an annual charge is levied according to slabs formulated by the civic authorities: 10% of the total value of the property for residential and institutional uses and 27.5% for industrial and commercial uses.

Once the new ownership policy is implemented where land will be allotted on a freehold basis to those who have bought or are planning to buy flats or plots from builders or the civic authorities, buyer will become the actual owners.

Vijay Gupta, CMD of Orris Group, says: “Once the new ownership policy is implemented in Noida and Greater Noida, selling property will become easier. Buyers need no longer obtain unending permissions for bank loans to mortgage their property. Transfers will be free of charge.”

As per the records of the development authorities, 10,000 hectares out of a total of 20,316 hectares in Noida has already been developed. The remaining area will be developed in the next phase.

According to the master plan of the Yamuna Expressway Industrial Development Authority, of the total 2,30,000 hectares, up to Agra, 50,000 hectares—up to Jewar—is being developed in phase one for residential and commercial purposes.

In Greater Noida, of the total 36,000 hectares, 49.7% of the area—residential 23%, commercial 7%, and industrial 19.7%—has been used up.

The Uttar Pradesh State Industrial Development Corporation (UPSIDC) has also agreed to frame a policy to grant freehold status to all the owners of residential, industrial, and commercial plots. The decision will benefit residents of Ghaziabad’s Tronica City being developed by UPSIDC and owners of plots in the group-housing scheme at Surajpur (Greater Noida). The GDA currently allots residential plot on freehold basis, but the UPSIDC will make a fresh beginning.

A report says that the UPSIDC is proposing to convert leasehold property into freehold property by charging a conversion fee of 25-30% on the current market price of the land.

More than 5,500 of allottees in Tronica City, and around 1,000 in Greater Noida, will benefit through this policy.

The UPSIDC has sold more than 1,000 residential and group-housing plots at Surajpur; in Tronica City, the UPSIDC has already allotted 2,400 acres out of the total area of 3,600 acres. The UPSIDC is planning to allot another 1,200 acres in next phase; Tronica City has 20 sectors—12 residential and eight industrial.

Sanjiv Choudhary, MD of Swarnim Group, says: “Freehold property is always preferable over leasehold property. Once the new ownership policy comes into force, transfer of property will become simpler and financial institutions, investors—Indian and foreign—are more comfortable with freehold properties. For the government too, it is a very good source of revenue generation and in updating revenue records. In the case of succession, it becomes easier for a common man to transfer property to his successor.”

Dhiraj Jain, director of Mahagun India, says: “Freehold land has long been a major demand in Noida and Greater Noida. Like the DDA, the Noida and Greater Noida authorities have also agreed to frame a policy to grant freehold status to property owners here. This policy will bring credibility and transparency to the industry and customers will be the greatest beneficiaries. When land will be allotted on freehold, it will entitle buyers and make them the actual owners.”

“Freehold property is popular in cities like Delhi where one gets the rights of the land and is also free to make structural changes—but these are more suitable for houses built by development authorities. In places like Noida where most residential projects are highrise apartments mainly on lease, where one can live as long as they want, a freehold property would not matter much. But the policy will certainly ensure more development in Noida and Greater Noida,” Ashok Gupta, MD of Ajnara India Ltd, said.

Deepak Kapoor, director of Gulshan Homz, says: “Freehold property in Noida will surely boost the morale of a normal buyer and is good news for any developing real estate destination. A freehold property has a little more of trust value attached for a first-time property buyer.” Alok Tyagi of ATN Group says: “Freehold property is any day preferable to leasehold property. Once the new ownership policy comes into force, transfer of property will become simpler and customers will be the greatest beneficiaries.”

“We welcome any such plan which will bring the concept of freehold property to Noida or any other such property destination, as buyers will get complete rights over the land in a freehold ownership,” Sushant Muttreja, MD of Cosmic Group, said.

Latest Realty News

Golden State Capital to raise $500 m from REIT listing
Mar 18, 2014
DELHI: Private equity firm Golden State Capital (GSC) said it will set up a real estate investment trust (REIT) to spearhead operations in India. The company, which hopes to raise $500 million (around ?3,060 crore today) by listing the REIT in Singapore, intends to invest $1 billion over the next three years in stabilised offices that are FDI-complaint.
Entry of high-speed elevator manufacturers bring a paradigm shift in high rise buildings
Mar 18, 2014
DELHI: Indian real estate has progressed in leaps and bounds in the last decade and one can marvel at the rapid growth of high rise buildings across the country, be it in the inner cities, suburbs or 2nd tier towns.
SIPs best way to create wealth via mutual funds
Mar 18, 2014
DELHI: At the very basic, wealth creation refers to the process of deploying your money in a manner that there is real-value accretion over the long run. In other words, you should deploy your savings in such a way that the rate of return on your money beats the rate of inflation.
Name owners of multiple plots: Chandigarh High Court
Mar 18, 2014
DELHI: Taking up the issue of allotment of multiple plots in the defence category and under discretionary quota by HUDA, the Punjab and Haryana high court on March 13 asked the urban development authority to submit the names of all allottees who were allegedly granted multiple plots. According to HUDA records, around 8,000 people have taken multiple plots under various categories in contravention of the norms.
Hunt for Gurgaon’s best homes narrows to 15 condominiums
Mar 18, 2014
DELHI: The Clash of the Condominiums has come to the deciding stage. A survey conducted by the Indian Market Research Bureau in association with The Times of India has identified 15 finalists among 150 societies that will vie for the honour of being among the best five places in the city to live in.
Jung plans facelift operation for DDA
Mar 15, 2014
DELHI: A thorough restructuring is in store for the Delhi Development Authority. According to information issued by Delhi LG’s office, an exercise will be carried out “not just to revamp the DDA but to equip it with modern processes to enhance its efficiency.”
Developers pushed for tourism in Aravalis
Mar 14, 2014
DELHI: The minutes of an NCR Planning Board committee meeting to consider changes in the regional plan reveal how hard Haryana pushed for opening up the state’s fragile conservation zones, such as the Aravalis, for tourism.
‘Millennium City’ Gurgaon comes a long way
Mar 14, 2014
DELHI: As Delhi slips from the reach of property buyers, Gurgaon emerged as a hot destination, providing world-class infrastructure and better connectivity. In the National Capital Region (NCR) Gurgaon saw immense growth. After witnessing a spurt in commercial and residential properties, Gurgaon has come a long way.
Udyog Vihar industrialists urged to not pay double tax
Mar 14, 2014
DELHI: Udyog Vihar’s plot owners have asked local industrialists not to pay their annual maintenance charges to the industry authority for the next financial year.
Decoding paperwork required for buying property
Mar 14, 2014
DELHI: For the purchase or lease of residential or commercial real estate, as an investment or end-use, various factors need to be considered beyond the price and location. For properties in new projects by reputed developers, there is no reason to be too stressed about this. However, it can and often does become necessary while purchasing a resale property. One of the most important aspects to verify is the title of the property.

Latest Realty News Of State

Realty Talk's