Hello, I own an ancestral property in Fort, Mumbai that is occupied by 6 tenants under the Pagdi System. I would like to transfer the ownership to the tenants if they are willing to buy it out for 33% of the value of the flat. 2 tenants have shown interest and I would like to proceed further. My questions are: 1. What is the process to convert into ownership? I learnt that I could convert it into a condominium...if so what is that process? 2. Can I transfer the ownership to one tenant at a time or do I need unanimous consent? 3. Can I settle with other tenants at a different (lower) price as I believe they will be interested.
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1. If you want to sell the property to the tenant, you can execute a sale deed after obtaining a sale consideration amount as per the terms and conditions of the sale deed.
2. You can transfer the property one by one to the willing tenants by executing a registered sale deed in their favor.
3. It will be your own decision to which nobody can interfere.
This is very helpful. For clarity, do I need to convert Pagdi System to condominiums or not? I ask as I dont think I can transfer land and building ownership under Pagdi system.
You are the landlord, hence if the tenant is desirous of purchasing the property (the land underneath the structure), you can execute a registered sale deed in his favor for a determined sale consideration amount.
1) you can call a meeting of tenants submit your offer
2) ask tenants to give in writing whether offer is acceptable to them
3) if some of tenants are agreeable you can transfer flat on ownership basis by entering into separate agreement with said tenant
4) better offer one price to all tenants
5) you can transfer land and building to condonium
No need to convert it into condonium
1. You can sell and convey your reversionary interest in the flats in the building to the tenants. So you can register a deed of conveyance of reversionary rights in favour of the tenant for his flat against the consideration to be payable by the tenant to you. This deed has to be stamped and registered. This will confer full ownership right on the tenant in respect of the flat in his occupation.
2. Thereafter all the tenants can form themselves into a society or a company or an association and you can then convey the land underneath the building alongwith the common areas to such society/company/Association.
3. The society as an owner can then submit the property to the provisions of the Maharashtra Apartment Ownership Act by executing a deed of declaration. A deed of apartment has to be made in respect of each flat. So the property will become a condominium wherein the flat owners will also have an undivided share in the land.
4. You can sell your reversionary interest to any willing tenant who wishes to purchase full ownership right. It is not necessary for you to obtain consent of all tenants or of majority tenants to do this exercise. You can sell your reversionary interest to any tenant who is offering a good price for purchase of ownership right. The tenants who do not buy the ownership right would continue to remain as your tenant.
They can't have ownership rights only deed of assignment can be done and they will always be tenants
Dear Client,
Pagadi system is a legalized form of tenancy under the provisions of the Maharashtra Rent Control Act, 1999. But it is not that common in other states. It is better to contact a local lawyer. You will have to execute a sale deed in favor of the tenants and also divide the share of the land accordingly.
