Real estate is undoubtedly one of the best sectors to invest in Bangladesh. However, before you decide to invest in the housing market, it is important to understand the nature of the market, property types, and all the legal procedures associated with it. To that end, the first question that can pop into your mind is how many types of property are there in Bangladesh?
Considering the ownership and legal process, the property in Bangladesh is divided into two categories- leasehold property and freehold property. But why are leasehold property and freehold property different? What are the differences in the legal process of buying and selling such property? In this article, we will explain everything in detail.
Leasehold property
RAJUK (Capital Development Authority) is the only governing body responsible for the urbanization of Dhaka. The properties under RAJUK are actually called leasehold properties. In fact, no land or plot under the supervision of RAJUK is sold you can only lease it for 100 years, hence the name. In other words, buying RAJUK property does not mean buying it for life, but leasing it for 100 years. It is mandatory to obtain prior approval and permission for any kind of purchase, sale, or construction of such properties. If the property is under the supervision of RAJUK, then it must be a leasehold property.
Important things to know when buying a leasehold property
The most important deed in buying leasehold property is RAJUK’s deed of lease. This document is proof of ownership. The seller’s name must be verified on this important paper before buying or selling a leasehold property. This document mentions the type of property and records the history of the last 25 years. It also lets you know about previous owners. An occupancy certificate is also required for the construction of any type of installation on any plot under RAJUK. Which is to be collected from RAJUK as well.
Freehold property
Freehold property is indefinitely free from the hold of any authority other than the owner. In other words, freehold property means privately owned property that is not under RAJUK or any other organization. Since such property is privately owned and there is no specific authority for it, you should be more mindful at every step when dealing with these properties, starting with the legal document.
Important things to know when buying a freehold property
The most important document in purchasing any freehold property is the deed of ownership. This registration copy is the proof of the original owner of any privately owned property. This is a lot like the lease deals of RAJUK owned properties. The difference is that where leasehold property ownership is limited to 100 years, buying a freehold property means owning the property for life, unless you decide to donate or sell it later.
The Land Registration Office of each area approves the deed of ownership on the basis of which the registration of the property is completed. Usually, two copies of this registration record are issued, one will be with you as the new owner of the property, and the other will be assigned to the registry office. Therefore, before purchasing such property, one has to go to the registry office to verify the deed and documents and check the copy of the registry office with the copy of the original ownership deed given by the seller.
Mutations are another official record where new ownership information for each property is updated. This indicates the recognition of the registry office and the successful completion of the transfer of property. So, don’t forget to mutate any freehold property after it is registered in your name.
At Bproperty you can easily avoid the legal complications of leasehold property and freehold property by contacting our expert and invest in the property of your choice with confidence. So no matter the property type, including documentation, vetting, mutation, occupancy certificate, come to Bproperty for all your property related legal needs.
