Pagdi: What Is Pagdi Means In Real Estate? In India, the pagdi system of tenancy is prevalent. Similar to conventional rental agreements, it also involves a tenant and a landlord; the only distinction is that the renter also owns a share of the property and has the authority to sublet and sell it. Continue reading to learn more about the Pagdi system and its significance in real estate. The Pagdi method differs somewhat from the standard rental arrangement even though it is a rental model that is commonly used in India. In this case, the tenant is also a co-owner of the property and only pays a small rent amount in comparison to market "ask" rates. Additionally, the renter has the ability to sublet and sell the property.
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Let's use the following example to better understand how the Pagdi system works: Take the instance of A and B, two parties. B is the renter, and A is the landlord. In this case, A owns a property that B is considering purchasing. The Pagdi rental model stipulates that B would give A, commonly known as Pagdi, a lump sum principal payment. In return, A would guarantee that B receives 60–70% cheaper monthly rents and co-ownership of the property, subject to certain terms and circumstances.