Indore Development Authority launches campaign to convert leasehold properties to freehold properties

The Indore Development Authority (IDA) has initiated a campaign to aid in the transition of approximately 10,000 properties from leasehold to freehold. This effort is expected to generate revenue of at least Rs 250 crore. During a five-day event held from March 20-24 this year, 169 properties were successfully converted, resulting in a revenue of Rs 3.68 crore for the IDA while also assisting property owners.

Currently, the leaseholders are required to pay annual rent and renew the lease every 30 years. By converting to freehold, the property owners will have full rights, including the ability to mortgage the property without permission from IDA and will no longer be obligated to pay the annual lease amount.

In addition, the IDA intends to make the process of applying for or submitting the application to their office easier during the month-long drive. Their target is to convert as many properties as possible to freehold by April 30 and finalize the process by the end of May.

While the initiative is expected to help thousands, the IDA is yet to provide clarity on the details of the process. For instance, if a property owner still has some years left on their lease before the next 30-year deed is renewed, they must pay the annual rent for the remaining period in addition to the freehold fee. This seems impractical and unfair. The IDA chairman has told the press that an answer will be provided to all such queries soon.

According to reports, since August 2022, around 1,300 properties have been converted to freehold which generated over Rs 50 crore in revenue for IDA. This incentivised the Authority to formalise and streamline the process for candidates to apply and complete the free hold process easily.

The specific lease conditions that are required to transform into freehold can vary depending on the laws and regulations of the jurisdiction where the property is located. In general, some of the common conditions that need to be met include:

The property must have completed a minimum period of leasehold ownership, which may vary depending on the jurisdiction.
The leaseholder must have cleared all dues and payments related to the lease agreement.
The property must be free from any legal disputes or pending litigation.
The land on which the property is built must be approved for conversion from leasehold to freehold.
The leaseholder must obtain the necessary approvals and clearances from the relevant authorities, such as the local government or land development agency.

It's important to note that the specific requirements and conditions can vary widely depending on the location, and it's advisable to consult a legal professional or relevant authority for specific guidance.

Next (Tenants have limited rights, can't dictate redevelopment: Bombay HC)

Indore Development Authority launches campaign to convert leasehold properties to freehold properties

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