Leaseholders can own land after 30 years:Converting leasehold to freehold to get costlier under new MP rules

The state government is preparing to make changes in the renewal and freehold rules for leased land in urban areas. For this, a proposal has been prepared to amend the Municipal Immovable Property Transfer Act 2016. According to the proposal, ownership rights will be given for land leased for 30 years or more, but the fees are being increased. There will be a new determination of premium and rent for renewal. Compounding fees and penalties will be increased. There is a proposal to increase fees on commercial use of leased land. According to ministry sources, most of the land of urban bodies in urban areas is in private hands on lease. Currently, a large number of lease renewal and freehold cases are pending. The government is preparing to change the rules for their disposal. The proposal will be sent to the cabinet soon. Know about the changes in rules and their impact on common people in this report 10 Proposed Changes That Will Affect Common People 1. Thirty Year Lease Then Land Will Be Freehold Municipal corporation land that has been given on lease and is being used for residential and commercial purposes can be made freehold. The old rule did not have clear conditions regarding time or duration. Now 3 important conditions have been added to the proposed rule. 2. Converting to Freehold Will Cost More Money According to the current rules, to convert residential property to freehold, 1% of the market value must be paid, and for commercial property, 2% must be paid. According to the proposed rules, for residential property, there will be a two-and-a-half times increase to 2.5 percent, and for commercial property, more than two-and-a-half times increase to 5 percent. 3. Changes in lease rent deposit rules as well According to the current rules, the condition for lease rent is that the remaining period or 10 years, whichever is less, the leaseholder must pay. Now the proposed rule states that the remaining period or 10 years, whichever is more, payment must be made accordingly. This means that earlier, payment had to be made for a shorter period, now payment will have to be made for a longer period. Understand it like this…. Let’s say someone has 6 years remaining in their lease. Now according to the current rule, since this is less than 10 years, rent for the 6-year period will be charged. According to the proposed rule, now rent for a longer period will have to be paid, so the leaseholder will have to pay rent for 10 years, meaning an additional burden of 4 years will be imposed. 4. Certificate will be received 15 days after registry Rules and procedures for conversion charges for freehold have been fixed. Conversion charges will have to be deposited within 30 days of application. Only after payment will the conversion deed (transfer document) be created. After this, registry will take place, the cost of which will have to be borne by the leaseholder. The freehold certificate will be received within 15 days of registry. The important thing here is that all these charges are minimum, but municipal corporations can collect more than this if they wish. 5. Lease rent period 25 years instead of 30 years 6. Rent for Leased Property Will Be Expensive 7. Authority to Municipal Bodies to Increase Rent The new rule states that these rates are minimum. Municipal corporations and local bodies can charge more if they wish. The rent may increase further in the future. In the proposed lease rent rules, the period of lower rent has been reduced from 10 years to 5 years. Meanwhile, the condition of lower rent has been removed and the condition of higher rent has been implemented. Overall, this new rule will be more expensive for common people. 8. 10 times penalty for delay in construction If the lessee or lease holder does not construct on time and delays, but completes the construction during the case proceedings itself, then the existing rule has been made even more stringent for this. Understand it like this. If the market value of a property is 20 lakh rupees. According to the old rule, the penalty at the rate of 0.05% was 1,000 rupees. According to the proposed rule, at the rate of 0.5%, this penalty will be ten thousand rupees. 9. More money will have to be paid to change land use If someone wants to change land use along with lease renewal after the master plan is changed, they will have to pay up to 11% of the market value. This will be taken in three heads… 10. Lease rent and penalty will increase every year In the current rules, lease rent and penalty are charged at minimum rates, and bodies can collect more. This was the case earlier as well. Now in the proposed rules, annual increase has been made mandatory. According to the proposed rules, rent must be increased by at least 10% every year. An additional 5% increase will also be mandatory every 5 years. Impact: Earlier rent could remain stable, but now it will increase by 10% every year and an additional 5% in 5 years. Three government orders, yet properties not becoming freehold