Purchase of flat in a building developed on a lease-hold land
Kapil Tiwari
(Querist) 12 November 2012
This query is : Resolved
A close relative intends to purchase a flat in a building which has been developed on a property whose lessor is the Municipal Corporation(Mumbai).My queries are:
1) Is it safe to buy a flat in such a building, if the intention is for investment?
2) Is it a wise investment proposal, if the property rate is lower than that in similar flats which are "free-hold"?
3) What basic precautions should one take while purchasing a flat in a "lease-hold" land of which the Municipal Corporation is the lessor?
Sudhir Kumar, Advocate
(Expert) 12 November 2012
one cannot give you the title better than he has.
why the price is less?
because after paying the money your title to property will not be clear. In such like agreement at time term buyer is used for a life long tennant (without rent) who is only permitted to reside.
Meet some local lawyer with the draft agreement you are going to enter.
Devajyoti Barman
(Expert) 12 November 2012
If the lease is properly executed and registered and the same is for longer period then I do not think there should be any difficulty.
The key is here lease deed and other related deed after whose perusal one could comment upon its title.
ajay sethi
(Expert) 12 November 2012
it is always better to buy a flat in society wherein land is free hold . if it is leased land from BMC then the lessor on expiry of lease will ask for higher lease rentals . find out the period for which leaase has been granted by BMC .
my advise is to avoid buying flat in a lease hold land
Kapil Tiwari
(Querist) 13 November 2012
Thank you all, Sirs!
Mr.Ajay Sethi, the lease period of BMC was originally 30 years and balance period now is about 26 years. Your advise, I understand, is a categorical "NO" to investment in a flat in a lease hold land, even if it is significantly cheaper than a similar flat available in a free-hold land?
Kapil Tiwari
(Querist) 13 November 2012
Dear Sirs,
Is it not the responsibility of the broker/agent to specifically inform that the flat under consideration is in a lease-hold land? He did not mention this explicitly and I came to know this only after he handed over to me the sale agreement photocopy of the previous flat owner! India is a largely illiterate country and I understand that many of the occupants of the flats in the building are not even aware as to the lease-hold status of the land!
V R SHROFF
(Expert) 13 November 2012
Broker just introduce Seller and purchaser & collect their brokerage.
No Receipt, No responsibility,
They charge 4% i.e. Say Rs. 1.20,000/- for 30L Flat
Advocate charges are negligible, and Brokers leave all Title Drafting, Registration to Advocate, and also want their cut in it.
Advocate need to investigate title and advise Purchaser.
So Agents select the Advocate that smoothly carry on deal to get their rich brokerage.
Broker do not want honest st forward Advocate.
They prefer touts.
No doubt, such broker increases Litigation, so Purchaser, when realised he is cheated, and helpless, comes to reputed Advocate for Court Litigation.
ajay sethi
(Expert) 13 November 2012
yes dont purchase the said flat . that is why you must always consult a lawyer before purchasing any flat . you have mentioned lease perios remaining is 26 years . on expiry of 26 years BMC will increase lease rentals substantially . so best avoid
