The Delhi Development Authority (DDA) has announced a temporary hold on all pending applications for converting residential properties from leasehold to freehold status. This decision, conveyed by Union Minister of State for Housing and Urban Affairs Tokhan Sahu in the Rajya Sabha, stems from an ongoing policy review aimed at making the process more citizen-friendly and rationalizing conversion rates.
Understanding Leasehold vs. Freehold Property
A leasehold property means the owner holds the property from the DDA on a long-term lease, typically 99 years. The DDA remains the ultimate owner of the land. In contrast, converting to freehold grants the property holder full and permanent ownership rights over both the land and the structure built upon it.
Why the Conversion Process is on Hold
Minister Sahu stated that the DDA's existing conversion policy for residential properties is currently under review. The objective is to simplify the process, rationalize conversion charges, and ultimately make it more accessible and beneficial for property owners. While the review is underway, all new and pending conversion requests have been put on hold. The government has not yet specified a timeline for when the revised policy will be introduced or when the conversion process will resume.
Properties Covered Under the Existing Policy
Under the DDA's current scheme, a wide range of residential properties are eligible for conversion. These include:
- Built-up residential plots, excluding small plots measuring up to 50 square meters.
- Fixed-term residential properties where no premium has been charged.
- DDA-allotted flats across various income groups: Low-Income Group (LIG), Middle-Income Group (MIG), High-Income Group (HIG), and Self-Financing Scheme (SFS) flats.
- Flats located in the Asian Games Village complex.
- Properties constructed by cooperative group housing societies on DDA-leased land.
However, eligibility for conversion is contingent on certain conditions. The property must not be involved in any title dispute, and its land use, as specified in the lease or allotment documents, must be residential. Applicants are also required to submit No-Objection Certificates (NOCs) from all mortgagees involved with the property.
Conversion Charges and Payment Structure
The charges for converting a property from leasehold to freehold vary depending on the locality and zone of the property. Applicants have the flexibility to pay the total amount either in a single installment or through annual installments spread over a maximum period of five years. If paid in installments, an annual interest rate of 12 percent is applied.
It's important to note that the conversion is finalized only after all installments have been successfully cleared. The DDA does not grant extensions for missed installment deadlines. Additionally, applicants must submit the prescribed documents along with a processing fee of Rs 200.
Optional Facility for Property Owners
The DDA policy clearly states that conversion from leasehold to freehold is not mandatory. It remains an optional facility for eligible leasehold property holders, even as the government proceeds with its review of the existing framework.