The Delhi Development Authority (DDA) has temporarily suspended the process of converting leasehold properties to freehold status. This decision follows a directive from the Union Ministry of Housing and Urban Affairs (MoHUA), which has called for a review of the prevailing conversion rates. Sources within both the DDA and the Ministry confirmed this development to The Indian Express.
Online Portal Inactive as Review Begins
As of January 10, the DDA's dedicated online portal for processing these conversion applications was found to be non-functional. This halt in services coincides with a significant policy shift by another major land-owning agency under the same ministry.
The Land and Development Office (L&DO), which manages approximately 60,000 central government properties in Delhi, has decided to adopt the Delhi government's official circle rates for calculating its conversion charges. Previously, L&DO used its own independent rate structure. The agency announced this change on January 1, 2024.
Parallel Revisions by L&DO and Delhi Government
Interestingly, the L&DO's conversion services have been closed since December 2022 while the agency revises both its rates and the Standard Operating Procedure (SOP). Sources indicate that with the adoption of circle rates, a new SOP is being drafted, and conversions are expected to restart shortly.
This move by L&DO is particularly notable. According to a 2021 report by the Comptroller and Auditor General (CAG), the agency had converted about 35,000 of its properties to freehold by 2021.
Compounding the situation, the Delhi government itself is currently in the process of revising its circle rates. It is anticipated that both DDA and L&DO will likely resume their conversion processes simultaneously once the Delhi government finalizes and notifies the new circle rates.
Historical Context and Policy Evolution
A.K. Jain, a former planning commissioner for the DDA, provided historical insight into the policy. He stated that in the 1970s, when the DDA began allotting flats and land, it did so exclusively on a leasehold basis. The shift towards freehold conversions began in the 1990s under the liberalisation policies of the P.V. Narasimha Rao government. This facility was later extended to cover older properties as well.
The DDA last updated its conversion rates for residential properties in 2011. However, in the past year, it approved a 10% increase in land rates for converting commercial, industrial, and multi-level parking properties.
Under the DDA's policy, converting a leasehold plot to freehold requires a one-time payment. This charge is linked to the plot's size and the officially notified land rate. The calculation often applies only to the area that exceeds certain specified thresholds. Original allottees and lessees are eligible for rebates ranging from 25% to 33% on these conversion charges.
The fundamental difference between the two types of ownership is significant. In a leasehold arrangement, the land-owning authority (like DDA or L&DO) retains ownership of the land, granting the allottee rights to the property for a specified period, often with conditions on its use and transfer. Freehold ownership, in contrast, denotes absolute and permanent ownership of both the land and the building, allowing the owner to transfer or mortgage the property without needing prior permission from the authority.
This conversion process is typically undertaken by property owners before a sale or transfer to make the asset more attractive and marketable. Officials from the DDA did not respond to requests for comment on the current suspension.
