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Tenants, landlords united in criticism of revised lease policy

HT Correspondent, Hindustan Times  Mumbai, October 11, 2012
First Published: 01:34 IST(11/10/2012) | Last Updated: 01:35 IST(11/10/2012)

The revised policy for leasehold plots has attracted strong reactions from all stakeholders. While landlords contend that the new lease charges will create complications and lead to fights, tenants are complaining of the “additional burden”.


“Such a rise [in lease] is absolutely not justified. There is danger that we may lose our plots,” said BR Bhattad, executive president, Property Owners Association. “What can we do if tenants do not pay? The entire amount is to be given to the government and we will only spend both money and time in litigation against defaulters,” he added. The Association has convened an emergency meeting to discuss the issue. 

Tenants too termed the hike atrocious. “Our buildings are old. Instead of giving relief, the state is doing everything to make money. Property tax will increase in the days to come and with this move, the burden will increase manifold,” said Rahul Parmar, who stays in an old building at Girguam.

Advocate Vinod Sampat said both the hike and the revised tenure are wrong. “There is no mind applied to the hike,” said Sampat. “Long tenures ensure stability and reduce hassles. But here, the state is hell-bent on making things difficult for residents,” he said.

The state has made it clear that all such issues should be sorted among tenants and landlords and the government will not interfere. “The lease rents were too low… we have revised them as per the market rates,” said a bureaucrat, who did not wished to be identified.

The government on Tuesday revised lease-rent to 2% to 5 % of one fourth of plot’s official market value.

The revised lease policy
The government hiked the new annual lease rent by 2% (residential), 4% (industrial) and 5% (commercial) of one-fourth of the plot’s market value, which will be as per the rates in the Ready Reckoner.

Alternatively, lessees can get occupancy rights of the plot, the right to use a plot for the specified period without paying annual rent after making a one-time payment. Lessees can pay one-time transfer fee, which will be 20% (residential), 25% (industrial) and 30% (commercial) of the market value of the plot.

The term of new agreements will be limited to 30 years. The term of many British-era lease agreements ranges from 50 to 999 years.

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