Leasehold to Freehold Under L&DO

The Land and Development Office (L&DO) is an authority in Delhi that is responsible for land development and administration. It is also responsible for overlooking the conversion of the property from leasehold to freehold. This blog will detail the complete process for converting a leasehold property to a freehold property.

Leasehold VS Freehold Property

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

1. Duration: Leasehold properties under L&DO 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 L&DO 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 L&DO 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 L&DO

The complete process for the application for conversion from leasehold to freehold is detailed below:

Step 1

Check the eligibility

• Properties are industrial, commercial, and residential properties.
• The property has been leased for 30 years
• No outstanding dues or litigation on the property

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 form

Step 4

After filling out the application form and collecting all the documents, submit it at the L&DO office in Delhi

Address: Gate 4, 'A' Wing, 6th floor, Moulana Azad Road, Nirman Bhawan, New Delhi, Delhi 110011

Step 5

After the submission of the documents, the file goes through a scrutiny process where all the documents are verified. During this step, the authority may ask for additional documents such as NOCs from other agencies. This step may also include site inspections.

Step 6

Pay the conversion fee. This fee can depend on various factors such as the type of property, the zone, and size. However, a generalized fee structure is defined below

• Residential: The fee can range from approximately Rs. 1,000 per square meter to Rs. 5,000 per square meter.
• Commercial: The fee can range from approximately Rs. 34,000 per square meter to Rs. 66,000 per square meter.
• Industrial: The fee can range from approximately Rs. 34,000 per square meter to Rs. 1,31,000 per square meter.

Step 7

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.