State rejects Mhada proposal to relax norms for 5-yr lock-in for flats | mumbai | Hindustan Times
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State rejects Mhada proposal to relax norms for 5-yr lock-in for flats

Owners of low-cost flats built by the Maharashtra Housing and Area Development Authority (Mhada) who were looking forward to a relaxation in the five-year lock-in period for leasing out their houses stand to be disappointed. HT reports.

mumbai Updated: Jul 02, 2012 02:01 IST
HT Correspondent

Owners of low-cost flats built by the Maharashtra Housing and Area Development Authority (Mhada) who were looking forward to a relaxation in the five-year lock-in period for leasing out their houses stand to be disappointed.


The state government has rejected Mhada’s proposal seeking to allow flat owners to lease out premises within the stipulated lock-in period of five years. The state is of the opinion that by allowing the move, they will be encouraging many to look at these low-cost houses as an investment opportunity and would be unjust to those who have no homes. While allotting flats, Mhada takes an undertaking from the buyer that it shall seize the flat if the buyer sells or leases out the flat within five years.

Officials of the state government justified their decision by saying that any concession on the lease clause would encourage investors. “The lock-in period was imposed as a deterrent against investors. If we remove the clause it would encourage investors in a big way,” said an official from Mhada.

State housing secretary Gautam Chatterjee did not confirm or deny the decision. He said he would shortly take up the matter with the concerned minister. Last year, Mhada’s vigilance department found that 73% of the flats did not have original owners of flats living in flats. Though Mhada had promised action against those at fault, nothing was done about it.

Later the housing development sought a relaxation of lease norms saying it would fetch some revenue and also help those who do not reside in the city. With the realty market at an all time high, there has been an overwhelming response from the buyers for Mhada flats, which are priced at less than half the market price.

Housing activists have welcomed the state government’s decision. “Stringent laws ought to be imposed and flats should be seized from the erring owners. There are a lot of people without houses, all of whom are dependent on Mhada,” said Mohammed Arshad, housing activist.