No conversion of commercial properties to freehold: Chandigarh administration
CHANDIGARH: In a major setback to the Chandigarh Housing Board (CHB), the UT administration has rejected its request for allowing conversion of its commercial leasehold properties to freehold.
“The decision is also indicative of the administration’s stand on the long-standing demand of the city’s businesses and industrial associations for allowing conversion of the leasehold commercial and industrial plots to freehold,” said a UT official.
In a letter to the CHB, the administration has said there is no policy under which conversion can be allowed for the CHB’s commercial properties. The CHB has been pursuing the permission for more than a year.
Even after cutting prices of its leasehold properties by 30%, there have been no takers for its commercial properties. There are around 100 such properties which are lying unsold even after repeated auction attempts by the CHB. These properties are worth crores of rupees.
“Even though the administration has denied the CHB to convert its leasehold commercial properties to freehold, the UT estate office has been holding auctions of its commercial and institutional properties on a freehold basis. Last October, the estate office earned Rs 30.84 crore from two nursing home sites,” said an official.
One site had earned Rs 18.25 crore and the second fetched Rs 12.58 crore against reserve price of Rs 6.91 crore each. It was the first time that the estate office had offered nursing home sites on a freehold basis. Earlier attempts at selling these sites on the leasehold basis had attracted no buyers.
While the CHB, in the last couple of years, has been able to earn more than Rs 200 crore from the auction of its freehold residential properties, it found few takers for its commercial properties during these auctions.
It was in February last year, when UT administrator Banwarilal Purohit had decided to allow the auction of all unsold residential, commercial, industrial and nursing home sites with its different agencies like UT estate office, municipal corporation and the CHB on a freehold basis.
Immediately after the decision, the CHB wrote to the administration seeking permission for its unsold properties. Getting no response from the administration, the CHB sent multiple reminders to it seeking a decision. The CHB must take the administration’s approval and pay conversion charges as most of its properties were built on land given to it by the administration on a leasehold basis.
The CHB had earlier even pledged to pay any conversion charges the administration imposes for conversion of its properties.