In Noida, property scams: Can the authorities demand more money from you after allotment? Here's the answer
Leasehold property buyers in Noida often wonder if the authorities can demand more money after allotment. Learn about the circumstances under which an increase in payment is possible and when it's not legal.
In cities like Noida, buyers typically receive leasehold properties, not freehold. Therefore, it's important to understand whether the lease payment is annual or one-time, and whether the authorities can increase the amount after allotment.
How many years is the lease for?
Most leases are for 90 or 99 years. After this period, the property must be returned to the government unless you pay a fee and convert it to freehold.
If the lease is based on a lump-sum premium and does not stipulate annual rent, government authorities cannot arbitrarily impose new charges later, unless the lease deed explicitly states otherwise or both parties reach a new agreement.
What do experts say?
According to Sudhanshu Mishra of Square Yards, if the lease is agreed upon for a lump sum premium and does not specify annual rent, the government cannot add annual rent later.
The court has ruled on this matter several times. Harsh Parikh of Khaitan & Co. says that paying rent every year is not necessary for a lease to be valid. A one-time payment at the beginning also makes the lease valid.
The Transfer of Property Act also defines a lease similarly. This means that the right to use the property is granted for a fixed period, and the payment can be made in one go or periodically.
What are the rules in Noida?
Land in Noida and Greater Noida is typically leased for 90 years. There are two options: annual rent or one-time lease rent (OTLR). If you pay the OTLR upfront, you generally don't have to pay any further rent.
Can Noida Authority increase the charges later?
This depends entirely on the lease deed that was signed. If the terms state that the rent may be increased, the authority may do so.
However, if the lease deed does not provide such a right, or a lump sum payment has already been made, imposing new charges without consent is considered inappropriate.
Rajasthan case
A case arose in Rajasthan where the government, after allotting a 99-year lease, issued a new lease deed three years later, demanding a lease rent of 5% of the market value per year from plot holders. The court struck down this practice and ruled in favor of the buyers.
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