In
India Real Estate owners have absolute rights over the properties in their possession that are backed up by solid documents registered with the concerned land records and land registration departments. However there are some distinctions between ‘real property’ and ‘personal property’. In ‘real property’ the separation of rights is more pronounced that with ‘personal property’. The collection of rights that a person holds in ‘real property’ is called ‘unencumbered freehold’.
However all the rights that are inherent in this ‘unencumbered freehold’ can be separated and transferred individually to other people. Thus a lease may be granted to a person to erect a building on a plot of land and also to enjoy the rights to his building and land for a specific period of time on payment of a specified annual or monthly sum of money to the owner of the property.
However according to the laws and other regulations governing a lease, the rights of the person who is now occupying the land rests on payment of the annual or monthly rent to the owner of the property. As per the freehold statute, this right has two propositions, i.e. the leasehold proposition and the freehold proposition. In any given land resource, different people may have different rights. In the case of freehold ground rent, a head-lease, a sub-lease, a mortgage and a rent charge are governed by different clauses and sub-rules.
However the exact rights transferred can be finely adjusted to the individual preferences of the seller or buyer when applying the restrictive covenant. Through this fine differentiation, it is possible to meet the individual preferences of sellers and buyers automatically through the free-market mechanism by adjusting the price.
