In the Pagdi System, which is a unique tenancy model in India, tenants pay nominal rent compared to market rates. Unlike typical renting arrangements, in the Pagdi System, tenants become co-owners of the property. Let’s delve into the specifics:
Origin and History:
The Pagdi system dates back to the pre-independence era. It was devised to evade taxes imposed by the British government.
Under this system, tenants received receipts for rent payments, and verbal/oral agreements played a crucial role in property transfers.
Section 56 of the Rent Control Act, 1999, legalized the consideration paid to landlords as a fine, premium, or “Pagdi.”
Functioning and Ownership Transfer:
In the Pagdi system, tenants become part-owners of the premises (not the land itself).
Tenants continue paying rent to the owner unless they sub-rent the premises.
The tenant has the right to sell the property, but a percentage (usually between 30% to 50%) of the gross sale amount goes to the landlord.
In case of sub-letting, the old tenant (now an owner) and the original landlord share the rent (typically at a 35:65 ratio).
Redevelopment and Extra Area:
When a Pagdi building undergoes redevelopment, tenants are entitled to additional area beyond their current occupancy.
The rules stipulate that tenants receive a minimum area of
300 sq. ftand a maximum area of
1,292 sq. ftfree of cost.
If the tenant’s area exceeds the maximum cap, they must pay the construction cost for the additional area to the landowner.
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Authors Of The Question
I have a house of 220 sq ft in Pagadi System. We do not have ownership as we are tenants. We give rent to the landlord. What is the extra area that will be given to tenants in the Pagadi System if the building is going for redevelopment?
Priya
435Views
9 months
2024-02-13T10:56:46+00:00 2024-02-13T10:59:22+00:00Comment
1 Answers
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