When it comes to real estate, the glossary is multifariously immense and often we miss paying attention to the details of such terms that holds important value in legal terms. At the time of buying /selling of properties, terms related with law (that are complex) bewilder us and take most of our time at the time of official procedure. So it’s always better to learn those tough yet necessary terms before you finally go for a deal. The terms that will be discussed in this article will be ‘Freehold Property’ and ‘Leasehold Property’.Freehold Property: This means you are the king of your land. You are the rightful owner of the property. A freehold property is a kind of property where the owner has full rights over it and can sell/ transfer or repair. India has mostly freehold properties that are entitled in the name of the owner (who lives in it generally).Leasehold Property: This is a kind of a property where the owner owns just the building and not the land. In India this variety of property is less in number and can possibly be found in some specific areas near Delhi (however in other states also it can be found but mostly near Delhi). In some areas the government has given its land on lease for longer periods to the housing societies such that the person who buys the property will only get the building and not the share of land. These properties are not easily transferable and a power of attorney is needed in case of property transactions. Note that the lease has to be renewed before its expiry date and if you forget then don’t worry, you can apply for a fresh one.What is a Power of Attorney?The Power of Attorney is a must needed document while transacting the leasehold properties. It is a token of legal authorization of the property. It tells that the person who is selling the property is authorized to do that without any obligations. Note that you pay attention on the wordings in the document as each word is equally important. If the owner of a leasehold property has the power of attorney then the person is eligible to do any kind of transaction with its property.How to convert a Leasehold property into Freehold property?If the owner of the leasehold property has the GPA (General Power of Attorney), NOC and the needed documents then a property can be made freehold. But it’s not enough, the owner has to pay huge price to attain the land. Many people have converted their properties to freehold near Delhi and NCR by paying handsome price. Also the government has eased the norms of property conversion. Owners just have to pay the conversion charge to make it freehold and then they can sell it easily.Advantages of ConversionThe best part is that you can transfer/sell/mortgage the property without any restrictions. All the ownership rights will be bestowed with the owner. No time periods, no ground rent, it’s all yours.
Sample Format of Power of attorney : Click on the doc image to download.