Freehold or leasehold property – the difference you should know

Propertypistol

Homebuyers often go through a dilemma of thoughts when they come across terms like Freehold property and Leasehold property.

Freehold or Leasehold property

Let us explain to you these basic terminologies along with their advantages and disadvantages in detail.

Freehold Property:

Freehold property means the property that you have purchased and you own complete rights on the same. There is no time limit until how long you own the property unless and until you decide to sell it to someone else. You and only you are the sole owner of the property.

Advantages of Freehold Property
  • Buyer is the sole owner.
  • The owner has complete rights on the property and he can do whatever he wants with it keeping in mind the law and order and legal authorities.
  • It is a long-term investment.
  • You do not have the concern of a lease running out. The property is yours indefinitely.
Disadvantages of Freehold Property
  • The maintenance and functioning of the building comes under your responsibilities list.
  • You have a responsibility to your local council and community to be a responsible homeowner.
  • Buying a freehold property can in some cases be more expensive than buying a leasehold property.
Leasehold Property:

Leasehold property means the ownership of the land is leased to the developer for a particular amount of time on which the property is built. The period varies from 30 to 99 years. In a leasehold property, the legal agreement happens with the landlord called a ‘lease’ that states the number of years the owner shall own the property and under what conditions. Leasehold is basically giving your property on rent for a particular period of time.

A lease is a contract between the owner and the landlord. A lease defines your rights and responsibilities and the time period for which you will be given the property. Ownership of the property will return to the landlord when the lease ends. Majority of housing options in Navi Mumbai, Delhi, Noida Extension and Gurgaon are leasehold properties.

Advantages of Leasehold property
  • Leasehold properties are less expensive.
  • Owner has less responsibility for repairs and maintenance.
  • Provides a home for people with a short-term requirement.
  • There is a possibility of buying the leasehold property outright, through enfranchisement, or share of the freehold.
Disadvantages of a leasehold property
  • If your lease expires and if you approach your landlord for renewal, he is not obliged to renew the term of your lease.
  • The landlord has control over the amount of service charge costs that you have to pay.
  • Your lease is subject to conditions that may limit the way you can use the property. For example, whether or not you can have pets.
  • A short lease may prevent the resale of the property or your ability to get a mortgage.
Can a property be sold on the basis of Power of Attorney?

If an individual wants to sell his property through power of attorney then there’s a big NO. In 2011, the Supreme Court held that transferring property title through General Power of Attorney is not valid.

The law holds that a power of attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property but any genuine transaction carried out through General Power of Attorney is considered valid under the law.

How to convert Leasehold Property to Freehold Property and its benefits?

The process of converting a leasehold property to a Freehold property is very simple, you only need GPA (General Power Of Attorney), a clear sale deed and a NOC (in case the land is under mortgage or rent). Further, you need to pay a conversion charge to authorities.

Before finalizing on buying a property, you should go through the legal documents thoroughly and understand the status of the property.

Disclaimer: The views expressed above are for informational purposes only based on industry reports and related news stories. Propertypistol does not guarantee the accuracy, completeness, or reliability of the information and shall not be held responsible for any action taken based on the published information.

Bookmark
(Visited 170 times, 1 visits today)
Tags:

Join the Conversation

11 Comments

  1. I constantly spent my half an hour to read this website’s articles every day along with a cup of coffee.

  2. I am actually thankful to the holder of this web
    site who has shared this great article at at this time.

  3. Wow, this piece of writing is nice, my younger sister is analyzing these things,
    therefore I am going to let know her.

  4. Spot on with this write-up, I absolutely feel this amazing site needs a great deal more attention. I’ll probably be back
    again to read more, thanks for the advice!

  5. Normally I do not learn post on blogs, however I wish to say that this
    write-up very compelled me to try and do so!

    Your writing taste has been amazed me. Thanks,
    quite great post.

  6. I am regular visitor, how are you everybody? This article posted
    at this web site is actually nice.

  7. Hi, I do think this is a great website. I stumbledupon it
    😉 I am going to return once again since i have saved as a favorite it.
    Money and freedom is the greatest way to change, may you be rich and continue to help other
    people.

  8. Appreciation to my father who shared with me on the topic of this weblog,
    this webpage is actually remarkable.

  9. Oh my goodness! Impressive article dude! Thank you so much,
    However I am experiencing troubles with your RSS. I don’t know the reason why I cannot subscribe to
    it. Is there anybody else getting the same RSS problems? Anyone that knows the solution will you kindly respond?

    Thanks!!

Leave a comment

Your email address will not be published. Required fields are marked *

Buy and Sell Properties
25k+ Properties
241+ Location
311+ Agents
1Lac+ Customers