Maharashtra govt lowers lease rents for housing societies, small bungalow plots

While the original policy had mandated collection of 2 per cent lease rent calculated on prices arrived at on calculating 25 per cent of the ready reckoner values for such properties, this has now been halved.

Officials said bureaucrats in the finance department had objected to the concessions extended on Tuesday. The government has clarified that no relaxation had been granted in lease rents prescribed for lands allocated for commercial and industrial purposes. (File Photo)

IN A move that would benefit hundreds of housing societies in Mumbai, the state on Tuesday approved a proposal lowering the annual lease rents it had earlier applied for renewal of long term leases in the commercial capital. On December 12, 2012, the previous Congress-NCP regime had adopted a revised policy for lease renewals, where the annual lease rents for state-owned lands were linked to ready reckoner values. The BJP-led government on Tuesday modified the policy, relaxing the lease rent condition for cooperative housing societies and individual bungalow plots with built-up space less than 500 sq m.

While the original policy had mandated collection of 2 per cent lease rent calculated on prices arrived at on calculating 25 per cent of the ready reckoner values for such properties, this has now been halved.

Ready reckoner (RR) values are market values of the property determined by the government every year. In a similar move, it was also decided to further lower such annual rents for lands allocated for orphanages, dharmashalas and cultural purposes to 0.5 per cent lease rent calculated in the same manner.

The government has justified the concession stating that it was done taking into account the lukewarm response to renewal of leases. Official statistics show that 826 out of the 1663 leases allocated by the government are up for renewal. According to government records, as on January 1, only 11 among these have so far renewed their leases.

Several housing societies had been demanding lowering of the lease rents. Incidentally, the decision comes at a time when the Bombay High Court is hearing petitions in this regard. Ironically, petitions arguing that lease rents, as prescribed in the 2012 policy, were less and needed upwardly revisions, have also been filed before the court.

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Devendra Fadnavis