Lease hold to free hold conversion

Under the Seventh Schedule to the Constitution of India, the land is a 'State' subject, and so land laws differ from state to state.  Some states do not convert leasehold properties to freehold but provide more autonomy to the owners.

Applications for conversion of leasehold property to freehold. They list out the documents required and the fees payable by the applicant. Among other documents, you have to produce the sale deed and a NOC, if the property is under sub-lease or mortgage. If the lease has taken place through General Power of Attorney (GPA), you also have to produce the GPA papers.

In a bid to convert a leasehold into a freehold property, the lessee has to acquire the ownership title of the property. The transfer can happen either via property purchase or receiving it as a gift. In the case of an investment, it is essential to have documents such as a search report, sale agreement & Sale Deed, etc. However, if the property is built on the land leased by the government, it is mandatory to seek permission from the concerned departments and statutory bodies. Also, it is essential to avail clearances from-

•    Environment department

•    Fire department

•    Urban land ceiling department

Search report

Primarily, hire a legal expert to avail a search report. A search report is a vital legal document in property transactions that serve as proof that property is free from all sorts of encumbrances such as bank loans, litigations, and mortgages. The report comprises all necessary transactions registered concerning a particular property. For instance, any transaction such as sale, gift, or mortgage, if taken place in the past with respect to the property under question, will be listed in the search report along with the details of the parties involved and the date of registration.

Sale agreement 

Next is the sale agreement. Both the parties, the seller and the buyer, have to sign and execute the sale agreement on a non-judicial paper. According to the law, the sale agreement contains the terms and conditions agreed upon by the parties and binds them.

Conveyance Deed 

The conveyance deed is prepared on a non-judicial stamp paper of an appropriate value. It is a document stating the transfer of the authority and ownership of the property to the buyer. Once drafted, register the conveyance deed in the Office of Registrar.

Mutation

Property mutation is the change in the ownership title of the property from the seller to the buyer. The land revenue department records the mutation details. It is also essential for the municipal records for property tax payments. Once the mutation is complete, a Mutation Certificate is issued to the buyer.

A privately leased property does not require the above permissions unless the property is barred or restricted by the government policies, for instance, leasehold land in sensitive areas. Also, the procedure of conversion varies across States, like some have banned the sale and purchase of land near mining and forest areas.

On the whole, conversion of the leasehold land to freehold could be benefitting, particularly when you are willing to sell the property and fetch higher returns. Thus, acquire all the afore-mentioned documents and approvals for a smooth and hassle-free conversion process of a leasehold land into a freehold.