यू आर लिविंग अरे टिनेंट इन ए हाउस। द लैंड ओं लीज इन अनदर टाउन
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गुण दो प्रकार के होते हैं - फ्रीहोल्ड प्रॉपर्टी और लीजहोल्ड प्रॉपर्टी। जबकि पूर्व में उन संपत्तियों को संदर्भित किया जाता है जो अनिश्चित अवधि के लिए स्वामी को छोड़कर किसी भी अन्य इकाई के "होल्ड से मुक्त" हैं,
Properties are of two kinds — freehold property and leasehold property. While the former refers to properties that are "free from hold" of any other entity except the owner for an indefinite period, the latter are properties usually leased for a period, commonly for 99 years from the time of construction. But, why the unusual figure, 99? Or, what happens or who owns the property at the end of the lease period? Or the applicable renewal conditions?
Propguide tells you more about why the leases are for 99 years.
The development authority of a particular area provides land development rights to developers and sells properties for a lease of 99 years. This means that anyone who purchases a residential or commercial property will own it only for a period of 99 years, after which the ownership is given back to the landowner. Buyers of leasehold properties are required to pay a ground rent to the landowner for this. Lease of such properties can be renewed after the completion of the term.
What happens upon expiry of said lease?
Usually, the government allows conversion of a leasehold property to freehold upon payment of conversion charges or guarantees the right to buy another lease upon expiry of the original lease.
Buying an older house
An investor eyeing an old property, say a 30-year old leasehold property, may find it difficult to further sell the property as it would not be easy for the prospective buyers to finance it. Such properties might not see significant appreciation as well. The key challenge faced by the buyer is the renewal of the occupancy contract once the lease is over. Besides renewal, older properties also require additional costs like property tax. Moreover, a buyer could face challenges of transferring the property title and registration papers, too. On the other hand, if the descendants of a leasehold property possess the property for 99 years, they will only need to pay for the lease renewal.
From a developer's point of view, projects that are planned on smaller leasehold periods, may not receive funds for construction which could lead to delay and non-completion.