Did You Know: Why Leases Are For 99 Years?

There are two types of properties- Freehold property and Leasehold property. In the case of Freehold, it is quite clear from its name that it refers to properties which are free from the hold. The only owner holds it for an indefinite period of time.

On the other hand, Leasehold property is that in which developers hold property development rights for 30 to 99 years. A property owner can also extend the tenure period by demanding for lease renewal. Moreover, this leasehold property can be converted in freehold property by paying the conversion charges. If you want to know more about these properties and need any suggestion then you can Real estate Service Providers.

But the question is why this unusual figure 99? And, who acquires the property after completion of 99 years?

Let’s discuss the 99-year deal concept in detail…
Here, I am initiating with some important facts about leasehold property

New Okhla Industrial Development Authority (NOIDA) offers land to develop apartment projects only on leasehold.

It is possible to extend the lease period to 999 years by paying a price.

If anyone purchases a commercial/residential property on the lease then he/she will have the complete rights of development of that property. When the tenure ends, this property automatically comes under the ownership of the previous landowner.

Why 99?

In 99 years lease agreements, rights and obligations for both lessor and lessee are mentioned. In this agreement, some rights are provided to buyers in exchange for some amount as rent of using that land.

The terms and conditions mentioned in the agreement like nature of rights, lease duration, rights of lessor and lessee, conditional clauses, termination clause, dispute resolution clause, etc. are crucial factors for the sustenance of any lease.

This 99-year life span is selected to control the rights for using it and the transfer of land. It is considered to be the perfect choice for the safe lifespan of the lessee. Moreover, it is the perfect time to safeguard the ownership of lessor.

Advantages of Buying Leasehold Properties
The biggest advantage in lease properties is a price. The price of property in such projects is often lesser than that available in the project built on freehold land. It is because you just have to pay for development rights.

In the case of freehold land, the buyer will have the complete owner and also for an indefinite period of time. Thus, it costs higher. Also, builders want to construct the building on leasehold land because it costs far less than freehold.

Moreover, if you want to extend the lease time, you just have to pay for lease renewal and your own time duration will extend.

In case, if you want to convert the leased property in your freehold property. Just pay the conversion amount and property is yours.