6 months on, CHB awaits nod for freehold conversion

Dushyant Singh Pundir

Chandigarh, September 10

Despite repeated auctions, the Chandigarh Housing Board (CHB) has failed to attract buyers to its commercial as well as residential properties offered on a leasehold basis.

In eight auctions held over a span of more than a year, the CHB was able to dispose of just 44 commercial and 16 residential properties on leasehold.

Attributing the poor response to the leasehold properties to the present rules and regulations, a property consultant said the main reason was the lack of ownership rights. In the absence of the ownership, the buyer has to pay the yearly lease money and also fails to get other facilities such as bank loan. “If someone purchases a leasehold property, sooner or later, he/she has to convert it to freehold, which will again incur heavy expenses,” he added.

To draw buyers, the CHB had sought permission from the UT Administration to allow conversion of leasehold properties to freehold in February this year.

In a letter to the Secretary, Estates, UT, the CHB had stated that many residential and commercial units constructed by the CHB on the land allotted by the administration on a leasehold basis were lying unsold for many years. The CHB requested for permission to sell built-up residential and commercial properties on a freehold basis for which the land was allotted on a leasehold basis by the UT Administration.

Even after nearly six months, they were yet to get any response from the administration, said an official of the CHB. However, after a goof-up in the Supreme Court on the conversion of leasehold commercial and industrial properties of the Estate Office, UT Administrator Banwarilal Purohit had recently clarified that he was in favour of conversion of leasehold properties to freehold for the development of the city.

On February 10, the administration had allowed the e-auction of residential, commercial, industrial and nursing home sites on a freehold basis and the CHB had also converted its properties owned by the Board to freehold, but it required permission for conversion of properties to freehold, which were allotted by the administration on leasehold basis.

An official said the CHB had to spend a huge amount of money on the upkeep and maintenance of the unsold properties. More than 100 commercial properties were lying vacant with the CHB, some were constructed nearly 40 years ago, he added.

The official said if the properties were converted into freehold, it would attract buyers and generate revenue for the CHB and also create employment opportunities in the city. Citing an example, the official said a commercial booth on leasehold could not be sold for nearly Rs 40 lakh, but was auctioned for nearly double the amount after conversion into freehold. To attract purchasers, the existing property would have to be first converted from leasehold into freehold, he added.

Kamaljit Singh Panchhi, president, Property Federation Chandigarh, said high collector rates were another reason for a poor response to the CHB properties. “Areas adjoining to Mohali and Panchkula are deemed a better option due to all-round progress and much low collector rates,” he said, suggesting that the administration should reduce the collector rates by at least 40% to earn crores of rupees in the form of stamp duty.