Increase in Rent of British-Era Leasehold Plots in Mumbai

Bangalore: In Mumbai, the state cabinet came up with a new policy for pre-independence leasehold plots. The administration has increased the rent of tenants living in old buildings, the terms of new agreement has been limited to 30 years and government has determined to give occupancy rights, which is the proper way of using a plot for a particular period of time with one-time payment and without having to pay the rent annually, reports Dharmendra Jore of Hindustan Times.

However, the lease agreement ranges from 50 to 999 years for several British-era Leasehold Plots. Such lease-hold plots include many gymkhanas located mainly in South Mumbai, hospitals, religious trusts, housing societies, business houses and educational centers to name a few. Adding to it, the government is likely to gain over 500 crore because of the revised lease rentals.

Chief Minister Prithviraj Chavan said, "The state has been losing revenue because of meager lease rent and because hundreds of leases have not been renewed for 40 years. Now, the state will earn good money through rent," reports Hindustan Times.

According to cabinet policy, the rent on one-fourth of the plot’s market value has been increased by 2-5 percent. This policy will be applied to plots where the agreements have already been expired. So, in every five years, the rent will be revised, according to the prevailing market rate.

Moreover, the government has decided to provide 20 to 30 percent of the market value of the plot as a part of the lessee occupancy rights for a transfer fee.

For instance, currently, for a 570 square meter plot in Colaba, a lessee was paying an annual rent of 17.71 and after the revised rent the lessee has to pay around 3.4 lakh, said Chavan.