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Govt-leased flat tenants to pay market rate

Saturday, 24 November 2012 - 8:00am IST | Place: Mumbai | Agency: dna

They have to shell out Rs5-Rs7.5 lakh from the measly Rs5 that they’re paying per year now

The around 1,200 tenants living in government-leased 1,000 sqft flats in Churchgate, Nariman Point and Marine Drive and paying a measly rent of Rs5 per annum, have reason to worry.

They may now have to pay Rs5-Rs7.5 lakh per annum as the state government has decided to bring the rent on a par with other properties in the area. The government  expects to earn at least Rs1,000 crore in the process.

With the government revising the lease norms, the occupants will have to pay more each year as the state increases the Ready Reckoner (RR) rate annually.

“The state has worked out a formula to simplify the lease calculation method. As per this formula, the government will charge the occupant 10%-15% annual lease on the 25% of the total cost of the area. The cost of the flat will be calculated on the basis of government’s RR rate and not the market price,” said a senior government official.

“We have got a separate RR rate for each location which was calculated based on various factors such as road, proximity to railway station, school, college and accessibility to the location,” he added.

The government has leased out more than 1,200 properties in south Mumbai for a period of 10 to 99 years as per the rates prevailed during the British Raj. Of these 1,200 properties, the lease of 560 have expired.

City collector Chandrashekhar Oak said the tenants can also own the flat after paying 25% of the total cost of the flat to the government. “We are still working on simplifying the lease issue and a government resolution will be issued in the next 15 days,” he said.

Oak added that if various interests emerge, they will call all stakeholders, including the owners and tenants, for a hearing. “After hearing these parties, the final decision will be taken, which will be exercised in fair manner,” Oak said.

Chandresh Shah, president of the Marine Drive Residents’ Association, said the state and BMC have been “harsh” by changing the lease norms. “They should have discussed it with us before finalising the lease charges. It is an arbitrary decision.” He added that they have invited the local MLA and MP to discuss the issue.

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