Unable to find buyers, Chandigarh Administration to convert properties to freehold

Tribune News Service

Dushyant Singh Pundir

Chandigarh, February 8

Unable to find buyers, the UT Administration has decided to convert its properties on leasehold to freehold for auctions. The Chandigarh Housing Board (CHB) has failed to dispose of its residential as well as commercial properties on a leasehold basis. Similarly, buyers are also not evincing interest in leasehold properties of the Estate Office and the Municipal Corporation (MC).

“We have decided to review the leasehold policy. After getting the revised policy approved from UT Administrator Banwarilal Purohit, properties on leasehold will be converted into freehold,” said UT Adviser Dharam Pal.

He said, “In future, all auctions will be held after conversion of properties into freehold.” Last month, the CHB had invited e-bids for the sale of 24 residential units and 108 commercial units on a leasehold basis. When the bids were opened on January 28, there were no takers for the properties.

Similarly, in an auction held on December 27 last year, the CHB could sell only five of the 113 commercial units on a leasehold basis and three of the 27 residential units on a leasehold basis. In another auction held on September 1 last year, the CHB could sell only two of the 149 commercial units on a leasehold basis and two of the 33 residential units on a leasehold basis.

On August 10 last year, the CHB had received five e-bids against 151 commercial units on a leasehold basis and could sell only three units. Similarly, 15 bids were received against 38 residential units and only five units could be sold. In case of a leasehold property, the allottee is required to pay an annual ground rent at the rate of 2.5 per cent of the consideration amount for 33 years, followed by 3.75 per cent for the next 33 years and 5 per cent for the subsequent 33 years.

The Administration had allowed the conversion of leasehold residential property to freehold in 2017 by fixing charges. The conversion charges for residential properties may range from 12 per cent to 15 per cent of the consideration amount. However, the conversion is not permitted in the case of commercial properties. The UT had recently written to the Ministry of Home Affairs for approval to allow conversion of leasehold properties to freehold in the case of commercial and industrial plots.

In the absence of a conversion policy, people were not coming forward to purchase properties during auctions held by the UT authorities, as property owners faced a problem in getting loans from banks. In November 2019, the General House of the MC had passed a resolution to convert its leasehold properties into freehold. As many as 500 properties of the MC and about 50 acres of land are lying vacant and it is not getting any buyers due to lack of policy on conversion of leasehold property to freehold.

Policy to be reviewed

We have decided to review the leasehold policy. After getting the revised policy approved from UT Administrator Banwarilal Purohit, properties on leasehold will be converted into freehold. In future, all auctions will be held after conversion of properties into freehold. — Dharam Pal, UT Adviser

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