Leasehold to Freehold Under DDA

The Delhi Development Authority (DDA) offers a housing scheme that now offers people the option to convert their property from leasehold to freehold for certain properties. It aimed to remove the limitations and uncertainties of leasehold properties, providing individuals with more control and stability over their properties.

This article details the process of converting a leasehold property to a freehold property under the DDA.

Leasehold VS Freehold Property

The difference between a leasehold property and a freehold property is stated below:

1. Duration: Leasehold properties under DDA have a set lease duration, often 99 years, after which the ownership reverts to the authority unless renewed. Freehold properties offer indefinite ownership, allowing the owner to retain the property until it's voluntarily transferred.
2. Ownership: Leasehold properties grant ownership of the building but not the land, which remains under the authority. Freehold properties provide complete ownership of both land and buildings.
3. Modification: Leasehold properties might require permission from the DDA for significant modifications or changes. Freehold properties grant the owner the freedom to make alterations without needing permission.
4. Loan Access: Acquiring a loan against a leasehold property under the DDA might be more challenging due to the limited ownership. Freehold properties often have easier access to loans or mortgages due to the clear and absolute ownership of both land and property.

Process to Convert Leasehold Property to Freehold Under DDA

The complete process of the conversion of leasehold property to freehold property in DDA is stated below:

Step 1

Check if the 1992 freehold conversion scheme applies to your property. DDA permits the conversion of the following properties

1. LIG, MIG, HIG, SFS, Janta Flats: Properties allocated under different categories of housing schemes catering to various income groups.
2. Plots Allotted by DDA: Land plots allocated by the DDA for various purposes.
3. Flats at the Asian Games Village Complex (pre-1992): Flats built before 1992 at the Asian Games Village Complex are also eligible for conversion, although the ones built before remain on a leasehold basis.

Low Income Group (LIG): LIG households are defined as households having an annual income between ₹3,00,001 up to ₹6,00,000

Middle Income Group (MIG): MIG households are defined as households having an annual income between ₹6,00,001 up to ₹18,00,000

High-Income Group (HIG): HIG households are defined as households having an annual income of more than ₹18,00,000

Step 2

Collect the following documents based on your case

Case 1: Allottee Applicant

1. Lease Deed: This document verifies the details of the lease
2. Demand Letter or Demand-cum-Allotment Letter: This letter verifies your status as the rightful allottee of the property.
3. DDA Possession Letter: This confirms that you've been granted physical possession of the flat.
4. NOCs for Electricity and Water: These certificates from the respective utility providers ensure no outstanding dues and smooth transfer of services.
5. Electricity Bills
6. Water Bills
7. NOCS from the mortgagee (if applicable)
8. Payment Proofs
   • For cash down allotments, submit the initial deposit challan.
   • For hire purchase allotments, provide a "No Dues Certificate" or copies of all monthly installments and the initial deposit challan.
9. NOCS from the mortgagee (if applicable)
10. Transfer Letter (if applicable): If the property was transferred to you through a mutation or blood relation, provide the photocopy of the DDA-issued letter.
11. ID Proof: Submit two documents verifying your identity (passport, voter ID, Aadhaar card, bank passbook, etc.)

Case 2: Power of Attorney Applicant

1. Lease Deed: This document verifies the details of the lease
2. Demand Letter or Demand-cum-Allotment Letter: This letter verifies your status as the rightful allottee of the property.
3. DDA Possession Letter: This confirms that you've been granted physical possession of the flat.
4. NOCs for Electricity and Water: These certificates from the respective utility providers ensure no outstanding dues and smooth transfer of services.
5. Electricity Bills
6. Water Bills
7. NOCS from the mortgagee (if applicable)
8. Payment Proofs
   • For cash down allotments, submit the initial deposit challan.
   • For hire purchase allotments, provide a "No Dues Certificate" or copies of all monthly installments and the initial deposit challan.
9. NOCS from the mortgagee (if applicable)
10. Transfer Letter (if applicable): If the property was transferred to you through a mutation or blood relation, provide the photocopy of the DDA-issued letter.
11. ID Proof: Submit two documents verifying your identity (passport, voter ID, Aadhaar card, bank passbook, etc.)
12. General Power of Attorney (GPA): Legal document authorizing you to act on behalf of the property owner.

Case 3: Transfer to Second Owner

1. Lease Deed: This document verifies the details of the lease
2. Demand Letter or Demand-cum-Allotment Letter: This letter verifies your status as the rightful allottee of the property.
3. DDA Possession Letter: This confirms that you've been granted physical possession of the flat.
4. NOCs for Electricity and Water: These certificates from the respective utility providers ensure no outstanding dues and smooth transfer of services.
5. Electricity Bills
6. Water Bills
7. NOCS from the mortgagee (if applicable)
8. Payment Proofs
   • For cash down allotments, submit the initial deposit challan.
   • For hire purchase allotments, provide a "No Dues Certificate" or copies of all monthly installments and the initial deposit challan.
9. Transfer Deed
10. Mutation Document
11. NOCS from the mortgagee (if applicable)
12. Transfer Letter (if applicable): If the property was transferred to you through a mutation or blood relation, provide the photocopy of the DDA-issued letter.
13. ID Proof: Submit two documents verifying your identity (passport, voter ID, Aadhaar card, bank passbook, etc.)

Case 4: Succession of Inheritance

1. Lease Deed: This document verifies the details of the lease
2. Demand Letter or Demand-cum-Allotment Letter: This letter verifies your status as the rightful allottee of the property.
3. DDA Possession Letter: This confirms that you've been granted physical possession of the flat.
4. NOCs for Electricity and Water: These certificates from the respective utility providers ensure no outstanding dues and smooth transfer of services.
5. Electricity Bills
6. Water Bills
7. NOCS from the mortgagee (if applicable)
8. Payment Proofs
   • For cash down allotments, submit the initial deposit challan.
   • For hire purchase allotments, provide a "No Dues Certificate" or copies of all monthly installments and the initial deposit challan.
9. NOCS from the mortgagee (if applicable)
10. Transfer Letter: If the property was transferred to you through a mutation or blood relation, provide a photocopy of the issued letter.
11. Mutation Document
12. ID Proof: Submit two documents verifying your identity (passport, voter ID, Aadhaar card, bank passbook, etc.)
13. Succession Certificate or Inheritance Document: Legal proof confirming the transfer of property rights due to succession or inheritance.

Step 3

Fill out the online application and upload all the documents. After filling out the application, you will receive an online acknowledgment before your documents go for verification by the DDA.

Step 4

Upon successful document verification, you'll receive a "demand notice" via email or SMS. This notice will specify any remaining fees or charges (if applicable) and confirm the final amount due.

It will also provide instructions on how to make the final payment, usually through online payment gateways or designated bank accounts.

Step 5

Pay the conversion fee set out in Annexure ‘A’. This payment can be mad in full amount or in installments. In the case of installments, the conversion can only begin after all the installments have been paid. In the case of installments, the interest is charged at 12% per annum.

Step 6

The last step includes being invited to draft and register a conveyance deed which will designate you as the owner and will hence signify the conversion from a leasehold property to a freehold property.

Benefits of Freehold Property over Leasehold Property

While both a freehold property and a lease property have their benefits, a freehold property’s advantages outweigh those of a leasehold property. A few advantages of freehold property are detailed below

1. You enjoy complete rights to modify the property however you like since you not only own the building but also the land on which it is built.
2. You can enjoy the financial benefits of being the permanent owner of a property as it results in investment opportunity, loans as well benefits from the increasing value of the land.
3. Freehold properties offer a smoother and more straightforward inheritance process compared to leasehold properties. The perpetual ownership structure simplifies the transfer of the property to heirs.