The Urban Development Department of Maharashtra issued a Government Resolution (GR) on October 9, 2024, providing revised guidelines for the lease period of municipal corporation properties under the Maharashtra Municipal Corporation (Transfer of Immovable Property by Lease and Renewal of Lease) Amendment Rules, 2024. This amendment modifies the Maharashtra Municipal Corporation (Transfer of Immovable Property by Lease and Renewal of Lease) Rules, 2023, which are applicable across the state.
Revised Lease Duration and Challenges
The 2023 rules faced issues at the municipal level, primarily due to the short lease periods leading to low demand for lease properties and reduced rental income. To address these concerns, the amended rules now allow the lease duration or renewal period to be mutually decided by the municipal corporation and the lessee, with the total lease tenure capped at 30 years.
Under these revised guidelines:
- The municipal corporation and the lessee can mutually agree on the lease period.
- The initial lease period is set at 10 years, but can be extended with government approval for leases exceeding this term.
- The total lease period, including any renewals, must not exceed 30 years.
These changes aim to increase demand for lease properties by providing longer lease periods, thus improving the potential for higher rental income for municipal corporations.
Amendment Notification and Rule 6 Modifications
A notification issued by the Urban Development Department on October 8, 2024, officially revised Rule 6 of the 2023 lease rules. According to the modified rule, the municipal corporation and the lessee must agree on the lease period, and the municipal corporation can independently approve leases for up to 10 years. For leases exceeding this period, approval from the state government is required.
Historical Context and Additional Lease Guidelines
The Maharashtra Municipal Corporation Act, 1949, grants the state government the authority to lease or transfer immovable properties owned by municipal corporations. The Maharashtra Municipal Corporation (Transfer of Immovable Property by Lease and Renewal of Lease) Rules, 2023 were notified in November 2023 to replace earlier rules from 2019. In March 2024, further supplementary guidelines were issued to address public feedback and the evolving needs of municipal corporations.
These new regulations provide a clearer framework for municipalities, ensuring that leases are appropriately managed and contribute to the economic development of local areas by generating increased revenue through property leases.