Mumbai Leasehold Housing Societies Can Now Convert to Freehold at 5-10% of Ready Reckoner Rate

Mumbai:

Housing societies on leasehold plots can now convert their plots to freehold at a fraction of the Ready Reckoner (RR) rate. The state government has extended this concession to housing societies on leasehold plots, similar to the concession granted to those on collector’s land (class 2 occupancy).

Government Notifications and Changes

In March, the government granted the same concession to housing societies on both types of land. However, on March 18, a gazette notification withdrew the concession for leasehold plots. Recently, on June 28, a fresh gazette notification reinstated the concession for housing societies on leasehold plots. There are 1,600 leasehold plots in Mumbai and 1,800 across the state. In contrast, there are 1,400 housing societies on collector’s land in Mumbai and 22,000 across the state.

Concession Details

According to the first gazette notification issued on March 16, housing societies need to pay 5% of the RR rate to convert their plots (leasehold/occupancy class 2) to freehold if the members decide to pursue self-redevelopment. To avail of the 5% conversion rate, major conditions must be met, including the requirement for members to allocate 25% of the additional area to the PMAY affordable housing scheme. The redevelopment project must commence within two years of conversion to freehold. If delayed, the land status reverts to its original status (leasehold/occupancy class 2) and the money paid for land conversion is forfeited.

Builder-Driven Redevelopment Option

Societies can opt for a builder-driven redevelopment project by paying 10% of the RR rate. V C Kapoor, a resident of Band Stand Cooperative Housing Society in Bandra, which is on a leasehold plot, welcomed the decision.

The feedback I have received from members of various housing societies is that the 10% conversion rate is preferred as residents do not have to give land for the PMAY scheme,” Kapoor said.

Views on Conversion Rates

Salil Rameshchandra, founder president of the Federation of Grantees of Govt Land (FGGL), emphasized that including societies on leasehold plots removes discrimination.

We wanted the conversion to freehold to be done at 5% of the RR rate without any conditions. This offer is a non-starter given the conditions attached. Most housing societies are more than 50 years old and urgently need to go in for redevelopment, so the 10% scheme is the best option,” he said.

Conclusion

The government's move to allow housing societies on leasehold plots to convert to freehold at a reduced rate presents significant opportunities for redevelopment and modernization in Mumbai.