L&DO awaits housing ministry approval for converting leasehold properties to freehold in Delhi

July 5, 2024

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NEW DELHI: Even as leaseholders of prime properties on land owned by the Land and Development Office (L&DO) in Delhi eagerly await the housing ministry to allow converting them into freehold, the agency is dragging its feet on lifting the “informal” pause on this exercise for two years as it is yet to finalise the standard operating procedure (SOP) for this.

Even Delhi High Court has taken cognisance of the delay and has sought appearance of the land and development officer to explain the factual position in one case where the petitioner has dragged the agency to court for failing to convert a property into freehold despite complying with all requirements.

Queries sent to the housing and urban affairs ministry went unanswered, though sources said there was a probability that the ministry would take a call on the issue soon.

TOI has learnt that L&DO has been receiving numerous requests for converting leasehold properties to freehold. It has put the exercise on hold for more than two years, though there has been no formal order. In some cases, people have even moved court, including Delhi HC.

In fact, L&DO has informed the HC in one case that properties “could not be converted from leasehold to freehold as the SOP is under process and, as such, since 2022 no property was allowed to be converted”. In an order, the HC said on May 9, “It is a serious matter where the L&DO under the name of SOP is depriving petitioners from their legitimate claim for conversion. Accordlngly, the L&DO is directed to appear in person on next date of hearing (July 19) to explain the factual position.”

In another case, the HC has directed L&DO to convert leasehold property of a petitioner to freehold within six weeks.

L&DO had allotted most of these land and properties to individuals and entities in the 1950s at a very nominal rate and the conversion charge for these properties from leasehold to freehold is in the range of 6-10% of the land value depending on the size. “The prevailing market rate of these properties is very high and hence there is more demand from leaseholders to get them freehold so that they can sell them off. There is a high probability that middlemen involved in these sale-purchase transactions get the most out of this. Govt may consider how to go for better discovery of price to protect its interest and also carry out conversion of land deeds,” a former L&DO official said.

While some real estate experts involved in sale-purchase transactions of such properties suggested that govt can refer to the prevailing circle rate to calculate the conversion charge, govt sources said that would also be very less considering that Delhi’s circle rate has not been revised since 2014.

Another former L&DO official said the prevailing market rate is much more than the circle rate. “But since there is a policy to enable people to freehold their properties, govt must come out with a revised norm, if it finds the current norm is skewed,” he added.

There are around 57,400 residential, 1,600 commercial, 1,400 institutional and 110 industrial units under the jurisdiction of the L&DO in the capital.

  • Published On Jul 5, 2024 at 02:00 PM IST

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