LEASEHOLD INTEREST INVESTMENTS

 

 
Can one entity serve as the landlord and the tenant, without actually owning the land or occupying the building?  The answer is yes, and the legal structure is commonly known as a leasehold interest.  Leasehold interest properties have been long viewed as the unknown and unfamiliar within the net lease arena.  Ironically, this unknown and often misunderstood investment structure is neither new nor unique.  Leaseholds originated from the feudal system of the United Kingdom where it is still widely used today, even in the residential market.  While the pace of investments around the world has pushed capitalization rates to record low levels, leasehold interests consistently trade at higher cap rates.  The yield is further enhanced by allowing for the depreciation of improvements to the leased property.

 

In its simplest form, a leasehold investment requires three separate parties; a land owner, a building owner, and a tenant.  The leasehold interest is ownership of the building.  This entity will have a long term ground lease arrangement with the land owner, and in order to generate a profit, must have a tenant in the building paying a higher rental rate than the underlying ground lease.  The return is then created from the difference of the rent paid by the tenant and the ground rent paid to the land owner.

 

In the competitive market for US based investment real estate, there is a never ending search for quality properties in strong locations yielding acceptable returns measured both from a cash-on-cash basis and over the ownership period of the investment.  The seemingly endless supply of capital originating from the institutional investors has handicapped the private markets by significantly compressing cap rates and thus returns.  According to Real Capital Analytics, retail cap rates have fallen nearly 200 basis points since 2003; levels some feel are unreasonable and unaffordable.

 

In an effort to secure a higher yield, investors have been diversifying geographically and as to the creditworthiness of the tenant.  The overall determination of investors to find desirable yields has expanded the demand for properties into secondary and tertiary markets often with leases guaranteed by an unrated company.  While initially these investments provided investors with greater returns, the yield has been narrowed to levels often found in primary markets regardless of the higher risk of the location and quality of the tenant. While non-investment grade tenants still offer some additional return based on the associated risk, tenants falling at or below the S&P rated BBB- investment grade threshold can still demand a premium based upon current press and positive outlooks from industry analysts. For these reasons, a leasehold interest may in fact be an alternative worth considering.

 

As an example, in the highly competitive market of California, an Albertsons leasehold interest has been recently marketed at a 7.25% cap rate.  Conversely, an Albertsons featuring fee simple ownership has been advertised at a 5.25% cap rate.  While comparing each of these two investments would need additional analysis as to location and financial benefits, the example shows how a quality and well known tenant can provide an investor a 200 basis point spread between a fee simple and leasehold interest investment.

 

In most properties, the cost of improvements constitutes a significant portion of the property value.  Leasehold interest owners benefit from owning the structure, creating additional return through tax savings generated from depreciation.  As with all non-residential buildings, depreciation is calculated on a straight line method over 39 years, providing for over $25,000 in depreciation per year for a one million dollar building.  This helps to reduce the taxable income, further growing the after tax yield of the investment.  In addition to this annual depreciation, upon disposition of the building, a taxable loss may be recognized.  The loss, whether classified as a capital or ordinary loss, will be equal to the adjusted basis in the property.  This amount is calculated as the amount the property was acquired for, plus any capital improvements, minus depreciation taken1.

 

The net income for a leasehold interest is the difference between rents paid by the tenant and the ground lease payments made to the land owner.  As a result of this structure, the cash flow provided in a leasehold is typically small when compared to the income generated in a fee simple arrangement.  Capitalizing this income amount assuming the higher cap rate noted above can result in prices for leasehold interest properties such that they can be acquired for as little as a few hundred thousand dollars.  This pricing threshold allows the smaller investor an opportunity to reap benefits often limited to the more affluent investor.

 

Ultimately, the decision of what asset class or lease structure offers the best investment is a business decision each investor must make for themselves.  Leaseholds are not for everyone, and may be best understood as a form of a bond or cash annuity than a real property asset, but in the endless chase for enhancing returns, the investor willing to consider these types of offerings may be rewarded with a wonderful return on their investment.



Quick Property Sale

When moving house there is plenty to consider, it is not just which estate agent to choose and where you wish to move but a large part is factoring the costs involved. Realising the funds at your disposal is essential, even before you hire an estate agent. The more accurately you can estimate your finances, the easier the process of buying a new property will be.

A primary concern should be calculating how much money you can actually put towards your new home. To arrive at a figure you must take the total funds you possess and subtract the costs of moving, such as legal and estate agent fees and removal company costs. Once you have an accurate estimate of the price of moving, you will be able to surmise how much money you can put towards a new property.

Involved in this figure should be the profit you will make from the sale of your house. When coming to this figure you must make an estimate of what your house will sell for and factor in the remaining amount left on your mortgage. Thankfully finding the figure your house will sell for can be aided by a good estate agent who will be able to estimate the value of your house in comparison to similar properties on the market. At this time it is worth utilising more than one estate agent to get an average price from a range of sources. In working out the profit, you should also include your personal finances in the total figure.

Assessing the size of mortgage you can afford is also an essential part of buying property. As a general rule, your mortgage payments should be no more than a third of your monthly income after tax. The point cannot be stressed enough that you should not overstretch yourself. It is important to be wary of lenders, it cannot be expected that they will lend responsibly so the onus for responsible lending is placed upon you, the borrower. It is usually possible to borrow a sum of three to five times the size of your salary; a good figure to go for if buying as a couple is two and a half times the size of your combined annual incomes.

The actual process of selling your house will cost you money, estate agent fees are a major part of this and expect to pay between one and two and a half percent of the sale price, depending upon how well you negotiate; unfortunately VAT will be added onto this percentage. You may wish to sell your house through property websites alongside the efforts of your estate agent, remember however that some agencies will ensure you sign a selling rights agreement that ties you to their services. Auction is another option but do not expect huge profits, as a percentage applies, as does the charges for legal services.

Solicitor’s fees are wide and diverse, just like the quality of services you may receive. An average figure for legal fees is around a half to one percent although this can vary depending on whether your property is freehold or leasehold, as leasehold will mean more work for your solicitor. Although it may be possible to find cheaper solicitors, it is worth remembering that any errors on the legal side of things will cost you dear when it comes to the sale of your property.

Added to these costs is the cost of removal services that should be accounted for just as much as estate agent and solicitor fees. When estimating this cost, evaluate the quantity of possessions you will be moving, whether you will be doing the packing yourself, the location of your house and the distance to your new home; all will affect the eventual price. Receiving a variety of quotes will assist in gaining an accurate figure.

Obviously there is more to moving than purely finding an estate agent and a property then relocating. Selling and buying property can be an extremely stressful experience, hence finding the most efficient, accommodating and effective services is vital. By following this advice you should be able to find the property of your dreams and have a swift and stress-free move.



Quick Property Sale

When buying a business in Spain, the property holding this business will either be freehold or leasehold. This is called tenure. There are advantages and disadvantages to both. Get financial and legal advice on tenure issues. In certain cities (such as Madrid and Barcelona), you will rarely find freehold business premises. And in locations such as the Costa del Sol you will find quite a few freehold premises.

Freehold businesses

As a business broker providing invaluable consulting services to his clients, Gregor Schellhammer (manager of Crystal Consulting Spain SL) advises that buying freehold means you acquire ownership of the land and building forever, and are able to do with it as you wish (subject to the law obviously). As specialists in bars, restaurants, nightclubs and hotels, we at Crystal Consulting Spain SL get many enquiries from people who wish to buy a business, yet who are unfamiliar with the advantages and disadvantages of the two types of tenure. Many buyers resolutely set their sights on purchasing a freehold, yet because of their limited capital (and restricted market conditions) are unable to find anything they are capable of buying.

Let’s say you buy a freehold bar and after some time decide you no longer fancy working in the bar, you can then:



Rent the premises by selling the business (and charging a leasehold-traspaso for the license, machinery and business).

Rent the premises to a manager (keeping ownership of the license and machinery).

Perform a sale and leaseback (whereby you sell your premises but make an arrangement to rent it back for a good rent for a number of years).

Or sell off both the premises and the business to a new business owner.



Advantages:

Property normally appreciates in value over time and so would show on your balance sheet as an increasing fixed asset. When you sell, you may make a considerable capital gain.

Disadvantage:

Freehold property is usually more expensive than leasehold to buy. If you have ample funds to buy a freehold business, you would be better off investing all those funds into a better leasehold business than to tie a substantial part of your capital in the freehold of the property.

Leasehold businesses

In Spain a leasehold is called a “traspaso“. The leasehold sum is the amount of money paid to the exisiting tenant (business owner), to take over the business. The new owner will then take on the right to re-sell the business whenever he or she desires. In a leasehold operation, the owner of the premises is entitled to a percentage of the traspaso (leasehold paid), this can be from 10% to as high as 25% - different on a case by case basis. Understandably, given that you are not buying property a leasehold business is much cheaper than freehold and more accessible to most investors.

Advantages:

Leasehold property is usually much cheaper to buy. 2 months deposit and a traspaso payment can get you a business (some owners require an aval - bank guarantee). For the price of one freehold you could buy several leasehold businesses. Including a purchasing option in the rent agreement could allow you to secure owning the property in the future.

Disadvantage:

You can only change the use of the building or make alterations, perhaps even decorate, with the prior approval of the leaseholder so operating in a leasehold property can be far more restrictive. Leasehold property is actually written off in the balance sheet over the life of the lease and so shows on the balance sheet as a ‘depreciating asset’. You do not own the “bricks and mortar”.

Generally speaking, both freehold and leasehold premises are viable options and will depend on both the personal situation of a business investor and the market they are looking at.

Before doing business in Spain, you might want to ask a question or two on the forum for doing business in Spain, where Greg regularly responds to business related questions about Spain.



Quick House Sale

With recent months seeing relative instability and poor returns from overseas property investment, the past twelve months have seen property investors going through a period of reflection, as they look to see which international markets will offer them the long term returns of investment they are looking for. Issues such as increasingly fragile economies and oversupply in traditional markets, have seen investors starting to look at markets such as Phuket with a view to them offering higher yields over the next few years.

Larger than Singapore, and located approximately 860 kilometres south of Bangkok, Phuket is one of South East Asia’s premier tourist destinations. Friendly locals, good infrastructure, exceptional cuisine and a tropical climate have resulted in large numbers of international property investors moving into Phuket. As such, the island is rapidly becoming a regional hub of international property investment, offering relative stability in uncertain times.

Recently Phuket has seen some exciting, and genuinely innovative property development projects being launched on the island. Projects such as the Royal Marina and the Laguna Village are well conceived developments, which prove attractive to overseas investors. These projects offer a genuine lifestyle choice for people, offering waterside living in a beautiful and friendly environment.

As well as the favourable local conditions for investors, the second factor affecting this growth in demand for property in Phuket is the increasing acceptance of overseas property investment in Thailand by the local authorities. At present, Thai law states that a foreigner may not own the freehold to the land, however they are able to purchase a freehold title for the building which sits on the land. In effect, the resulting purchase agreement will see the purchaser buying the freehold title for the property, and a separate 30 year lease on the land itself. In this instance, it is common for the contract to provide an option to extend the lease a further two times, each for thirty years, effectively giving a 90 year lease.

Property legislation in Thailand is slightly different for investors wishing to purchase a condominium, where a developer is likely to offer the purchaser both a leasehold and freehold option. Under Thailand property law, foreign ownership of a condominium must be under the allow limit of 49%, and in this instance ownership on a freehold basis can be offered. However if the block is currently over the 49% foreign ownership quota, then the property will be offered on a leasehold basis with the option to extend twice for periods of 30 years.

Whilst this method of property legislation may seem time consuming and complex, it is commonly practiced throughout Thailand, and it is believed that the authorities are currently looking at streamlining this process. As with all property purchases overseas, the requirement for a solid understanding of local legislation makes the choice of a good, multi-lingual solicitor a key factor to a smooth transaction.

These more favourable conditions, coupled with the stable political and economic climate currently being experienced in Thailand, investors are seeing long term returns from a market which currently represents good value in the property market.

The market for property in Phuket is gaining popularity, but still has a long way to go before reaching maturity. With a range of property on offer in the region, Phuket has something to cater for every budget and taste.



Sell House Quick

Beach is an unincorporated community located on Santa Rosa Island, a barrier island in Escambia County, Florida, U.S. It’s placed south of Pensacola, linked through bridges spanning to the Fairpoint Peninsula then to the island, on the Gulf of Mexico. As of the 2000 census, the community had a total population of 2,738.

Pensacola Beach occupies land bound by a 1947 deed from the U.S. Department of Interior that is administrated in the public interest by the county or leased, but never “disposed”; it is businesses and residents are thus long-term leaseholders and not property owners.

Pensacola Beach Florida waits for meeting all of your vacation expectations. No matter where you stay, a hotel, motel, bed & breakfast, campground or condominium, you are sure to find the perfect accommodations.

Whether you are seeking activities like, charter boat fishing, sailing, golfing or parasailing, cycling, jogging, and walking on the beach before the sunrise and taking pictures of the sunrise, Pensacola Beach Florida area has a lot to offer.

Beaches consist of Casino Beach, the geographic core of Pensacola Beach, where many gather for swimming and fun, and Quietwater Beach near the commercial core of the beach, and many un-crowded areas where only a few congregate to unwind.

Perhaps you would wish to dropping by the several stores, boutiques, galleries and specially shops for your shopping. For family time, there are amusement parks, miniature golf and water parks to round out your daily itinerary. Our most sought after attraction, fresh local seafood, is available at our one of kind restaurants.

If you want to look a place for families to picnic and let the children play in the water without having to worry about them, being carried away by the surf. You can stay in Quietwater Beach. It is located just past the Bob Sikes Bridge toll booth on the left side of the street.

You can always visit casino beach, the most populated beach area in the town of Pensacola Beach. Casino Beach is also home to the gulf coast’s longest pier, which is 1,471-foot long. You can either go fishing on the pier, or just watch for dolphins, stingrays, or other sea life. There is also snack and refreshments for sale at the pier entrance. The pier is also a great place to watch the surf on stormy days

If you want to go to camp you can always visit Fort Pickens, it has Campground Loop A is now open and is available on a first-come-first-serve basis. The cost for a camp site is $10.00 per night with a 50% discount for Golden Age/Interagency Senior and Golden access/Interagency Access Pass holders.

Pensacola Beach doesn’t only offer beach but also offers an array of shopping, lodging, restaurants, bars and entertainment - all with minimum travel, traffic and cost.

Repossession

Under the provisions of the Housing Act 2004 a Home Information Pack (HIP), is also known as a Seller’s Pack. It should be provided before a property in England and Wales can be put on the open market for sale with vacant possession. The pack consists of a set of documents; namely the property: an Energy Performance Certificate, local authority searches, title documents, guarantees, etc.

You can choose from a range of conveyancers, property solicitors and independent Estate Agents by using simple search listings to find competitive low cost Home Information Packs in your particular area. Independent companies can also help save money and bring benefits to you. If you wish to change your agent marketing your property, your HIP is portable, since you would have bought it from an independent company. HIP’s were introduced in despite stiff opposition from the building industry and estate agents, as well chartered surveyors. Some of the frequently asked questions on HIP are as follows:

Why you may need a HIP?

A HIP is a set of documents that provides the buyer with key information on the property. It must be provided by the seller or the seller’s agent. It is a legal requirement without which you can’t market your property. The HIP allows buyers view important information about the property at the start of the process, free of charge. This kind of benefit allows buyers become aware of any surprises at the end of the process. The HIP can also help reduce delays and extra expense to the buyer and seller. The Home Information Pack is mandatory for most homes in the market in England and Wales.

What does a HIP contain?

The HIP is made up of required and authorised (optional) items. It shouldn’t have any marketing or advertising material in the pack. It should have only official information.

Who prepares HIPs?

Sellers can instruct their Solicitors, estate agents, separate pack providers, or do it themselves.

You must attach certain documents in a Home Information Pack:

Home Information Pack Index Evidence of title Standard searches Energy Performance Certificate Sale statement Additional information for leasehold and common hold sales, where appropriate.

Most of the information in the Home Information Pack is already used in the Conveyancing process but is currently obtained after a sale has been agreed. As per the new regulations, the responsibility to obtain and pay for the home information pack documents passes from the buyer to the seller and the seller must order the HIP before placing the property on the market.



Quick Property Sale

It has now been over one year since the much debated Home Information Pack and Energy Performance Certificate for houses with 4 or more bedrooms was launched on the 1st August 2007. The principle was to ensure that buyers will know how energy efficient a house is before they buy it, and also so that some of the legal work in regards to that can be dealt with in advance, saving time and money for those concerned.

Now that time has passed since the introduction of Home Information Packs and Energy Performance Certificates, we can trace the impact the scheme has had on the UK. All houses of a particular size that are put on the market are now subject to the rules and must have the necessary Home Information Pack (known as HIPs) and Energy Performance Certificate (known as EPCs).

There was much concern and debate over the introduction of HIPs at the time. They had a somewhat shaky start when the Government was taken to court by the Royal Institution of Chartered Surveyors over the plans which delayed the 1st June launch and led to a negotiated compromise with RICS and the initial 4 bedroom house implementation.

Home Information Packs affect all those in the UK who hold an interest in conveyance and areas connected with conveyancing. It will not be until the end of 2008 when HIPs become mandatory for all homeowners, however, on the 8th May 2008, the Housing Minister, Caroline Flint MP, announced the extension of what were intended to be temporary provisions for First Day Marketing and leasehold requirements in the HIP Regulations from 1 June to 31 December 2008. This allows a property to be marketed where the HIP has been commissioned and paid for, or arrangement for payment been made, and the documents are expected to arrive within 28 days.

Yet people are still uncertain as to the exact makeup of a Home Information Pack. Within a HIP, you can expect to find a number of compulsory legal documents and searches. These include a Home Information Pack Index, an Energy Performance Certificate (which gives a “fridge type” efficiency rating for the property and makes suggestions for improvements), a Sale Statement, a list of Standard Searches, Evidence of Title, and, where appropriate, additional information for leasehold and common hold sales.

Of these documents, it is important to note that there can be variations from HIP to HIP depending upon the provider. For the list of Standard Searches, a better provider will incorporate the best kind of detailed Full Official Local Authority Search. Some HIP providers use other kinds of searches provided by personal search companies. However, this can occasionally cause problems with buyers or their lenders who will not always accept personal search results. Consequently, this can cause difficulties to get in the way of a successful sale, which is, of course, the last thing a homeowner wants. This one simple area of Home Improvement Packs shows just how vital it is to get good advice on HIPs.

This article is free to republish provided the authors resource box below remains intact.



Repossession

GPAs in Cooperative House building Societies at Chandigarh: An Introspection

By Satish Chandra Sharma M.A. (Eco),

General Secretary, Chandigarh Social Welfare Council.

Mobile: 9888-255-128. Email: sharma.ambakripa@gmail.com

15000 families which hold occupancy rights in cooperative housing societies at Chandigarh had been in for a harrowing experience. Unlike their counter parts that have purchased property on the power of attorney basis in other parts of the city, GPAs in the cooperative society flats had to suffer on various counts. They were first fleeced at the hands of the autocratic management of the societies and later put to bear harsh attitude at the hands of the Chandigarh administration.

Undoubtedly, the projects of the societies were completed with the funding made available by the GPAs. Till the funding was required, the managements had been friendly to them. The projects once completed were taken charge by the original allottees, who despite having sold the flats on GPA still continued to play the shots in managing the affairs of the society.

The concept though mooted some two decades back had been facing from many problems since the time it got floated. There were litigations; encroachments on the land acquired for allotment to societies had been rampant. Though the scheme was floated in 1991 with a view put available land to optimum use, yet societies registered under the scheme could not allotment of land till the year 2000.62 Societies were to get land in the third phase sectors benefiting 7373 members. Question was raised in the Parliament by the then local MP in order to pressurize Chandigarh Administration to allot land to such eligible societies.

While the allotment of land was made to the societies, Chandigarh Housing Board had incorporated unrelated outdated rules applied in isolation to govern the transfer of the flats in them. The statutory rule which allowed transfer of the flat after five years of the allotment of the land was reproduced as a stipulation that read the transfer shall be allowed five years after the society obtained completion certificate from the administration. Completion certificates to societies were withheld owing to minor violations committed by the individual members in the society.

Due to this paradox, societies that had completed the projects continued running from pillar to post to get the completion certificates for them. Interestingly, rules framed in 1996 to allow conversion of leasehold properties into free hold land tenure could not be availed by individual members holding occupancy rights in these societies. It took over 12 years for the administration to clarify that the transfer of flats in societies could be made after 5 years of the allotment of the land instead five years after completion. Administration does not have any answer for the plight suffered by several thousands of GPA holders who could have converted their flats from lease hold tenure to free hold tenure, as the rules so provided.

When land was allotted in 2002, the land price was revised from Rs. 750/- to Rs. 2500/-. The societies could get allotment of the land on free hold basis on payment of Rs. 350/- P SY. The decision of the administration caused much discontentment and was resented. However, the societies opted for the land at the new price and the high court directed the

Societies to pay their balance amount to the Chandigarh Housing Board. Even here the CHB had not corrected itself and made the allotment subject to provision of the Chandigarh Sale of Building Sites Rules 1960  and the  Capital of Punjab (Development and Regulation) Act 1952.

So much time had passed by now that the allottee members seemed little interested in the scheme. Either they had acquired properties in the meanwhile or grown up size of the families did not warrant acquisition of the flats. Some simply shrugged owning a flat instead of a complete building In the beginning the allottee member just wanted his deposit money held up for decades back and to recover this they parted the memberships to anyone who could pay back the deposit to them. The transfer was done on the basis of execution of the General Power of Attorney in favour of the buyer.

The psyche of the purchaser had been shaped as transactions in the Chandigarh Housing Board flats and other plots/buildings were routinely done in the city and such instruments of attorney were registered by the Sub Registrar Chandigarh. The spur in the prices of the property in Chandigarh added a spinning factor to the demand of the flats in societies. The demand swelled and the administration watched it but took no corrective measures .While this demand swelled and reached as high a proportion that roughly 50-60% flat properties had changed on the instrument of Power of Attorney.

Finding flats in society flats cheaper in comparison to other available properties in the city, persons who were desirous of owning a flat in the society applied and even obtained permission of their offices to own a flat on the instrument of power of attorney little realizing they in are for a trouble. After investing and on finding that the Banks are reluctant to advance loans on the instrument of the General Power of Attorney, a roll back took place and many of the GPA holders preferred to resell their flats and this did with a help and consideration of the original allottee who cancelled their GPA and made fresh GPAs in favour new intending purchasers.

Property boom also helped to revive the sale purchase of the flats in the societies which continued till the time of handing over of the possession. The management of the societies which had promised moon to the GPA holders started turning their backs on them. The hapless GPAs took to agitations to protect themselves. Managements which constituted of minority of allottee members found ways to keep the GPAs to walls. To make matters worse of the GPAs, Deputy Commissioner cum Registrar Cooperative Societies Chandigarh banned formation of the Resident Welfare Associations taking recourse to rule 45 of Punjab Cooperative Societies Act 1963. It was stated that the measure is aimed at checking “multiplication of disputes” and “some parallel body (RWAs) will definitely create hurdles in the functioning of the management committees

of the society and obstruct to achieve its purpose” .Functioning of the resident welfare associations shall be treated as anti society activity and action shall be taken against this.

This order of the RCS caused furors as this affected thousands of the holders of the GPA in society flats. One rule is that those residing in the societies are members of the society. Second rule is that only the original allottee is considered the member of the society. Cognizance was given to second rule. Original allottee despite selling his flat membership of the instrument of GPA continues to play shots in managing the affairs of the society. GPAs have acquired the flats by spending Lakhs of rupees and yet are denied any rights in the society.

I raised my objections against this rule in the media and submitted that confrontation between managements and GPAs have been unknown. The GPAs have been fleeced by the nexus between the cooperative department, society managements and the contractors handling the projects. I pointed out that the society managements in collusion with the contractors show bogus expenses which are being bore by the hapless GPAs. I demanded that the administration if conducts an enquiry shall find that those who are at the helm of the management bodies are not even the residents of the society. Managing committees cared two hoots to the problems faced by the GPAs, and GPAs themselves could not voice their problems and grievances.

The matter was brought to the notice of the local MP Shri Pawan Kumar Bansal, who promised to look into the matter. Mr. Bansal was submitted a memorandum at a function in sector 49, where his attention was drawn to the plight suffered by the GPAs in the societies. He was requested to prevail upon the administration to rescue hapless GPAs. I urged Shri Bansal to ensure similar rules be applied to society flat owners and the CHB flat owners. In contrast to CHB Sectors, societies have to build, operate and maintain infrastructural facilities themselves for life. No body seemed to care to work out the cost that society resident shall have to pay in addition to normal share of taxes they pay.

The process to regularize the GPAs had really set on my initiative. The administration had already come out with a substitution policy in the societies. The Transfer charges in regard to substituted members were fixed at Rs 50,000/-, Rs. 35000/-, Rs 25000/- for Category A, B, C respectively. Despite these charges were mutually agreed between the Administration and Substituted members of a society, the administration was not ready to accept these charges from the holders of the GPAs to transfer the flats on their names.

Instead the administration sought to apply the Chandigarh Sale of Sites and Building rules 1960 and in consonance with rule 8(C) of the 1960 rules it decided to charge unearned increase from the GPA holders as transfer fee. This was vehement ally resented by me on the ground that this rule being sought to be applied in isolation is legally void. My representation to the UT Administrator failed to evoke any response. Later, Advisor to the Administrator, told me that no review on this count is being undertaken by the administration and that “there is no escape” from this unearned increase being charged.

Ironically in a information supplied to me by the administration it was revealed that though the unearned increase has been computed on the basis of rule 8 (C) of 1960 rule, these “stand repealed” I am at a loss to understand the attitude of the officers of the administration as to why the matter was not considered in the right perspective? The

Finance Department of the Chandigarh Administration chose a day as auspicious as Independence Day i.e. 15th August, 2008 to issue an order on the matter confirming that the unearned increase as stipulated by it stands. Meanwhile, opinion/proposal of the RCS to charge nominal fee of Rs. 10,000/- from GPAs for transfer of flat in their names was ignored by the administration. And the unearned increase clause was approved by UT administrator.

Issuance of this order was widely resented. I had sent representations to Prime Minister Man Mohan Singh, Smt. Sonia Gandhi Chair Person UPA, Shri Shiv Raj Patil, the then Home Minister of India for intervention. Shri Pawan Kumar Bansal was kept well

Informed on the issue and he was requested to get the central intervention in the matter immediately.

The Home Department and Finance Department were under the charge of one officer. During his charge of the departments, no effort seems to have been applied to sort out the legalities of the order. The rule sought to be relied on in the order was unrelated, outdated and applied in isolation. This was legally void was established in the information supplied under the RTI to me. Despite protestations and media attention that the issue got, the matter was never carefully examined.

A big solace came to the GPA when the present incumbent as Home Secretary sympathized with the affected persons and on a representation by me submitted to him the matter was again discussed with RCS and he was asked to put forward a proposal to mitigate the problems of the GPAs. The fresh proposals by the RCS again have recommended nominal charges for transfer of the flat in the name of the GPA. The charges recommended are on the pattern of Haryana where these are Rs. 10,000/- for first transfer. Rs.20,000/- for second transfer and Rs. 30,000/- for the third transfer.

It is now a wait and watch situation for the hapless GPAs who have been miffed at the attitude of the administration.

Media can play a very positive role for the regularization of the issue of GPAs in cooperative society flats and this is aimed at getting your attention as the matter relates to several thousand families. These affected families are from intellectual class and therefore shun sit in strikes or the related forms of protest. Accordingly we all look to your attention for highlighting the gravity of the issue and to put pressure on the administration to devise a transfer policy which pro people and people friendly.

Author has been spearheading the protest and is General Secretary of Chandigarh Social Welfare Council. Visit: http://schandrai.blog.co.in      



Quick House Sale