News Update :

666 plots in Mumbai under whoopingly high lease rent renewal, rest will follow

Saturday, November 17, 2012

Mumbai 9th Oct 2012: Chief Minister Prithiviraj Chavan announed government’s intention to increase lease rentals on lease plots in Mumbai. The chief minister also inserted that Mumbai has 1,282 lease land parcels which are on long lease while suburbs have 295 plots. As many as 517 plots in the city are up for renewal while 149 in suburbs are also coming up for fresh contract.

These plots who were paying meager amount, for say, Rs.17, will have to pay Rs.3, 04,000/per annum. Similarly, a plot of 3000 sq. meters paying Rs.74 will have to pay Rs.33, 07,000/per annum. Which means the Property tax and lease rentals of Nariman Point areas will increase 18000 times? “Properties where lease contracts are to be renewed will now attract higher rent. But properties where lease contracts are still on will not be affected, at least for now,” he added. The government has also made another important change in the lease related law (Maharashtra Land Revenue Code) which restricts the period of lease to only 30 years.

Properties on lease specifically public utility buildings like hospitals, schools will have to shell out more lease rentals. The biggest land on lease is with Western Turf Club at

Mahalaxmi who is having decades of in fight with BMC on lease terms and lease rentals.
Mr.Paras Gundecha, President MCHI-CREDAI said, “This move will have far reaching effects on the rental and lease property market in Mumbai.

Maharashtra government’s decision to allow land to be given on lease only for 30 years will put potential leases in a quandary. Moreover, the increase in lease rates will have an adverse effect on the rental and lease property market in Mumbai. In an economy which is already reeling under market pressures, this move will further affect the buyer sentiment.” Lalit Kumar Jain, President CREDAI – National, says he is surprised at the Maharashtra Government’s decision to increase lease rates and decrease the tenure of the lease. This move will further pressurize the real estate market, which is already suffering from poor demand. Lessees will now shy away from the market due to shorter tenure and increased lease rates. The revised policy is against the affordable housing principal and it will put a lot of pressure on the home buyers. The government needs to reconsider this decision as it will only add to the woes of the real estate sector in India, the release said.

The meeting was called upon to address the plea of about 5 lakh people residing in dilapidated buildings of MHADA. ShriLodha said, “It is important to bring in new regulations for construction of the affordable housing. This will enable better quality of homes along with reduction in the corrupt practices of awarding contracts bringing in greater transparency. Project timelines will be adhered with and timely completion of projects will be ensured.

Moreover, huge amounts of penalties can be recovered on violations of DCR norms.” ShriLodha further stated that due to stringent norms of current Development Control Rules, about 56 MHADA’s redevelopment projects are stalled. It is also causing troubles for about 5 lakh residents of 3,700 MHADA colonies.

He suggested that the MHADA is a trusted name amongst the home seekers in the city and to protect its dignity, it is essential that instead MHADA constructing the projects, they should be handed over to the private players to improve the situation.
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