Renting homes on collector's land now made easy in Mumbai

Updated: Jan 10, 2020, 08:00 IST | Vinod Kumar Menon | Mumbai

Government has waived cumbersome process of securing a no-objection certificate from the collector for leave and licence agreements for 2,500 buildings under state control

Jolly Maker tower in Cuffe Parade is located on land owned by the collector. File pic
Jolly Maker tower in Cuffe Parade is located on land owned by the collector. File pic

In a significant step that would make renting houses in residential societies built on collector land easier, the state government has waived the mandatory NOC from the officer and fee on the leave and licence agreement. This would also result in an influx of houses into the rental market which has been stagnant for the past few years.

Housing experts, welcoming the January 7 notification (a copy of which is with mid-day), said there are nearly 10,000 flats in around 2,500 residential buildings on collector land in Mumbai city and its suburbs. The collector owns vast plots in Bandra, Versova, Vidyavihar, Cuffe Parade, Nariman Point, Malabar Hill, Backbay Reclamation, Wadala, Churchgate, Parel, Sewree among others.

Jolly Maker tower in Cuffe Parade is located on land owned by the collector. File pic

Ramesh Prabhu, founder of MahaSEWA (Maharashtra Societies Welfare Association) said, "Leasing out flats in such buildings was tedious and time-consuming as the NOC would usually take four to six months. Numerous visits to the collector office, unwanted questioning by the staff, explanation on the rent levied and so on, would turn off many people from renting out their houses located on such sites."

"A majority of those having houses in such societies are either former bureaucrats or state government staffers, who might have invested in such properties but do not lease them out due to the convoluted process. The circular will open up rental segments and have wide impacts on properties located on Mhada- and CIDC-owned land," he said.

Neelkanth Kingdom in Vidyavihar is a property located on land owned by the collector
Neelkanth Kingdom in Vidyavihar is a property located on land owned by the collector

The government announced the waiver based on the fact that a leave and license agreement only permits limited use of the premises and does not transfer any right, title and interest in the premises. As such there should be no requirement to seek consent or pay a premium on the license fee charged, explained Solicitor Stuti Galiya.

Till now, an amount equal to five per cent of the total amount earmarked in the agreement was payable to the collector for every lease/leave and license deal. According to state revenue officials, the relaxation is only for residences and not commercial units, even if located in such housing societies. "We had been receiving suggestions for the past one year. Since there is non-commercial gain in renting such properties, the decision was made in the interest of the public," said a senior official from the State Revenue Department.

Expert speak
Pankaj Kapoor, Managing Director of Liases Foras, a non-broking real estate research company, said, "This move will help rationalise real estate prices further. While affordable housing is yet to become a reality, the government is set to make renting flats easy."

According to Kapoor, the 2011 census recorded 11 million houses across the country as vacant and available to be rented. "The current number will only be higher. As supply increases, renting a house will become easier. The housing industry has remained stagnant with no price change in the past three years. With the draft Model Tenancy Act awaiting the government's nod, locked houses becoming available would bring a much-needed turnaround in the industry."

Did you know?
According to Solicitor Stuti Galiya, On March 3, 2015, a prospective amendment was brought in the Maharashtra Land Revenue Code, 1966 by introducing Section 37A. This gave power to the State Government to charge unearned income for every sale, transfer, redevelopment, use of additional FSI, Transfer of TDR, and change of use of flats situated on government land. Further, every such transaction required prior permission of the state government.

10K
Approximate no. of flats that will become available on rent

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