State introduces fresh rules for co-op housing societies seeking freehold rights

The draft notification was issued by the revenue department on June 4, with suggestions and objections invited from the public within 10 days.

MUMBAI: The Maharashtra government has introduced fresh rules aimed at streamlining land conversion procedures for cooperative housing societies and widening eligibility for securing ownership rights.

State introduces fresh rules for co-op housing societies seeking freehold rights

Hitherto, cooperative housing societies seeking ownership rights to leased land (land classified as Occupancy Class II) did not require the consent of members; however, a new order makes it mandatory to obtain the prior consent of at least 51%. The revised rules will also enable societies where land parcels were individually allotted to members to get their land converted to freehold (Occupancy Class 1).

The draft notification was issued by the revenue department on June 4, with suggestions and objections invited from the public within 10 days. More than 5,000 housing societies across Mumbai and the Mumbai Metropolitan Region are expected to benefit from the fresh amendments titled the Maharashtra Land Revenue (Conversion of Occupancy Class II and Leasehold Lands into Occupancy Class I) (Second Amendment) Rules, 2026.

The revised framework provides relief to societies where land plots were allotted individually to members, whose names are recorded in property records such as property cards or 7/12 extracts. Under the new provisions, such individuals will be allowed to directly apply to the district collector for land conversion after obtaining an NOC from the deputy registrar of cooperative societies. However, the conversion process will require prior approval from the state government.

The amendments also extend benefits to cooperative housing societies where government land leased to individuals, institutions or trusts has subsequently been transferred to a housing society with approval from a competent authority. “Even if an unauthorised transfer has subsequently been regularised by the competent authority, such land shall be deemed to have been granted for the purpose of a co-operative housing society and these rules shall apply for conversion of Occupancy Class II into Occupancy Class I,” says the notification.

Plots allotted under the Occupancy Class II category amount to conditional ownership for the lessee, who does not have to pay an annual rent. However, the land can only be used for activities the government allows.

In cases where land has been allotted for mixed purposes, such as residential-commercial or residential-industrial use, the premium payable for conversion will be calculated proportionately based on the area under each category of use. For lands where the lease agreement still has a remaining tenure, the unexpired period will not be considered while processing conversion applications, the notification says.

The government has also reiterated its conditions for societies opting for self-redevelopment after availing of land conversion. Such cooperative housing societies are expected to start the self-redevelopment process within two years from the date of land conversion.

“If redevelopment is delayed for reasons beyond the society’s control, the government may grant an extension of up to two additional years after recording reasons in writing. However, if redevelopment does not begin within the stipulated period, or if it is found that the project is being executed through a private developer instead of self-redevelopment, the premium paid will be forfeited and the land restored to Occupancy Class II status,” the document said.

The state government charges 5% of the ready reckoner value as premium from housing societies opting for self-redevelopment on government-owned leased lands. It also allows the societies to pay the premium for land conversion in three years.