Mumbai's Leasehold to Freehold Conversion Receives Fifth Government Extension
The Maharashtra government has once again extended the deadline for converting leasehold lands, specifically occupancy class II properties, to freehold status. In a move aimed at facilitating urban redevelopment, the state revenue department issued a draft notification last week, granting an extension until December 31, 2024. This marks the fifth such extension, providing continued concession in the premium payments required for the conversion process.
Low Adoption Rates Among Housing Societies
According to Salil Rameshchandra, founder president of the Federation of Grantees of Government Land, there are approximately 3,000 housing societies in Mumbai eligible for this conversion. However, only about 120 societies have opted to convert their leasehold lands to freehold so far. Rameshchandra highlighted that the majority of these societies are old and dilapidated, urgently requiring redevelopment.
"The residents are primarily from middle- or low-income groups and cannot afford to pay the premium for conversion," he explained. "In most cases, the premium has been covered by builders appointed for redevelopment projects." He urged the government to consider making this concession a permanent policy rather than granting periodic extensions.
Key Changes in the Draft Notification
The draft notification introduces several significant amendments to streamline the conversion process and encourage more societies to participate:
- Removal of PMAY Condition: Housing societies opting for self-redevelopment will no longer need to meet Pradhan Mantri Awas Yojana (PMAY) criteria if they pay a reduced premium of 5% instead of the standard 10%.
- Two-Year Self-Redevelopment Timeline: Societies undertaking self-redevelopment must complete the process within two years to avail of the benefits.
- New Scheme for Economically Weaker Sections: A special provision has been introduced for flats with an area not exceeding 350 square feet, targeting economically weaker sections of society.
- Conversion for Stalled Projects: Land where development work could not commence for ten years due to court cases or Development Plan issues will now be eligible for conversion.
Implications for Mumbai's Urban Landscape
This extension is expected to boost redevelopment efforts across Mumbai, particularly in older neighborhoods where housing societies have been hesitant due to financial constraints. By reducing premiums and introducing flexible timelines, the government aims to accelerate the conversion process, potentially transforming the city's real estate landscape. Stakeholders are encouraged to provide feedback on the draft notification by March 12, 2024, to ensure the policy effectively addresses the needs of residents and developers alike.
