Maharashtra: High premiums hit conversion of collector’s land to freehold units
Over 1,250 such plots have been given by the government to individuals and housing societies in south Mumbai, and only 19 plot holders have sought conversion to freehold.
MUMBAI: The state government’s scheme to convert collector’s land to freehold land has received poor response. Since March 2019, when the scheme was introduced, only one co-operative housing society and 18 individuals have opted for it. The individuals who have opted for it are rich and can afford to pay 25% of the Ready Reckoner Rate as premium.
Over 1,250 such plots have been given by the government to individuals and housing societies in south Mumbai, and only 19 plot holders have sought conversion to freehold. “There are 3,000 housing societies on ‘occupancy class II lands’, or ‘collector’s land’, across Mumbai. Yet only one co-operative housing society, in Mazgaon, has opted for the scheme,” said Salil Rameshchandra, founder president, Federation of Grantees of Government Land.
The reason is not far to seek. Niranjan Hiranandani, who got his occupancy class II land on Malabar Hill converted to freehold land, put on record, “The price I am paying is more than I should have paid.”
Hiranandani said the land was bought by his father who also built the family home and named it after his wife Kanta (Nirajan Hiranandani’s mother). “I still live in this home. For me this was a sentimental thing. Had I been living in a society, maybe I too would not have paid such a high premium for the conversion to freehold,” he said.
There are two types of lands — leasehold and occupancy. Leasehold lands are those given on lease for a particular period on an annual lease rent. Occupancy lands are of two categories — class I and II. These were purchased from the government at the prevailing market rates. However, class I lands have no restriction on sale and purchase and are freehold lands.
Class II lands were introduced by the British in 1901. These are meant to be used for the purpose they were intended for. Post-independence, the government continued to give class II lands, largely marshy lands, on the outskirts of cities to co-operatives for housing societies. People not only reclaimed the land to build their houses but also laid civic infrastructure such as roads, drains, and street lights at their own cost. However, for every sale, purchase, and mortgage, permission of the collector is mandatory.
Rameshchandra said the premium being charged by the government is prohibitive. “Though most of these housing societies are in a dilapidated condition and in urgent need of redevelopment, the high premium makes the entire redevelopment project unviable. Depending on the year the land was given, the premium is 10% or 15% of the RR Rate,” he said. Hiranandani said residents saw no value in paying such a high amount to convert land to freehold.
“If Air India can be privatised, why not all these occupancy class II lands? Residents are not going to use it for any other purpose. The government must make all such lands freehold,” he said.
The conversion scheme comes to an end in March next year and thereafter the premium will increase to 60% for housing societies and 75% for individuals.