Sub-Lease Agreement To Give Noida Homebuyers Almost-Legal Ownership
An estimated 50,000 buyers in Noida and Greater Noida, who are occupying units in projects that haven’t received an occupancy certificate (OC) yet, can heave a sigh of relief. The Gautam Budh Nagar Administration has said that homebuyers in these projects can sign an agreement to sub-lease with the builders by paying five stamp duty. This document will make their ownership legal, at least partially.
The decision will also help the district administration recover some of its revenue losses. The district administration has incurred a loss of approximately Rs 1,300 crore owing to non-payment of stamp duty and flat registration charges in Noida and Greater Noida.
What is a sub-lease agreement?
A homebuyer is not the legal owner of a property till the flat is registered in his name. To apply for registration, however, a builder has to obtain an OC from the authority. In the absence of this crucial document, a unit cannot be registered. This effectively means the buyer is staying in the flat illegally. Now that buyers would be able to sign sub-lease agreements, their ownership over the property could be proved using the document. After the builder receives an OC for the project, the unit will be duly registered and the buyer will have to pay a token amount of Rs 50 at that time. Note here that homeowner will not be able to sell such units till the OC is obtained by the builder.
“With registration of sub-lease agreement by paying five per cent duty, homebuyers will gain a legal document for their properties. They will also gain tax benefits and there will be no burden on them even if the Stamp and Registration Department escalates circle rates. The circle rate will be applied as per the date of registration of the sub-lease agreement,” said Uttar Pradesh Stamp and Registration Department Assistant Inspector General SK Singh.
"There are people who are paying EMIs (equated monthly installments) … they have paid full money to builders and certainly need a place to live. The basic concern here is to ensure that they have a legal possession and this agreement can ensure that the Stamp Department can never raise a question on their occupancy in future also," he said.
Residents’ welfare associations in Noida and Greater Noida have lauded the step.