Lease-holders can now be land owners

News Posted - 2010-05-26

GANDHINAGAR: In an important move, the Gujarat government is all set to regularise over 70,000 crore square metres of leased land, mainly in Ahmedabad. This will mean taking a major policy decision of allowing lease-holders to become full-fledged owners of the properties. They would, however, have to pay a fee for regularising the land.

A senior official said the government could earn thousands of crores of rupees from the move once it is implemented.

The issue was discussed at a district collectors’ meeting chaired by state revenue minister Anandiben Patel last week. The minister has called for complete details on the type of land that has been leased and its current status, including if the land is with the original lease-holder or if it has been sub-let.

“Land was leased for 99 years, 50 years, 30 years and 15 years initially. Most of the lease-holders are from the pre-British era,” a senior official said. “Today, lease is given for not more than 30 years.”

“Many of the lease-holders haven’t even paid rent for years together. Most leases have expired, yet the lease-holders continue as owners,” the official said, adding, “If sub-let, the state should acquire the property.”

Sources added that recovery of dues should precede the regularisation process. “When the land was leased, the rate was quite low,” a senior official said. “Today, it has skyrocketed. The lease-holder should pay a certain percentage of the current market rate for regularisation of leased land.”

Officials added that a majority of the land was leased during the British era for residential and commercial purposes. Today, land is leased only for a social sector project, like setting up an educational institute, hospital or charitable institute.

Decision Will Depend On Fee Government Fixes

AHMEDABAD: : Major lease-holders and real-estate developers, who have constructed properties on leased land, gave out mixed reaction on the state government’s decision to regularise huge chunk of leased land in Gujarat.

Most of the lease-holders are in the wait and watch mode. They are in no rush to buy ownership of the land. The main reason for this is uncertainty on the regularisation fee, which is yet to be decided by the state government.

Five star hotel Courtyard by Marriot has been constructed on leased land by realty firm Pacifica Group. Rockey Israni, director of the company, said that his company had paid money in an auction and full stamp duty as per the prevailing market rate to avail 6,000 square meter piece of land on 99 years lease.

“As per the lease agreement one can always renew lease when it expires.However, everyone would like to own freehold land and for that one wouldn’t mind paying fees if it is affordable,” said Israni.

“We have already paid hefty amount of premium during auction organised by Ahmedabad Urban Development Authority to develop property on leased land. In fact, leasing government land is just a different model of sale. Despite this, we would like to take full ownership, to avoid paper work, depending on regularisation fees,” said Dipak Patel, chairman Ozone India Limited and leasee of a piece of land on SG Highway.

Vijay Shah, chairman realestate committee of GCCI, said: “It is an encouraging step and win-win situation for lease holder, as well as, the state government. The state government would not preserve the lease record and leasee wouldn’t have to bother to renew the lease. The government was losing money as people were transferring lease on power of attorney and avoiding paying stamp duty.”

Source: Times of India 25/5/10