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Chandigarh’s long-pending proposal to convert leasehold commercial and industrial properties into freehold ownership is under active consideration by the Ministry of Home Affairs, with a final decision expected soon. The move could benefit hundreds of property owners by giving them greater ownership rights and making transactions easier. The issue has remained pending for several years, with property owners and stakeholders seeking a change in the existing system. The proposal is separate from the conversion framework already available for certain residential properties in Chandigarh under the city’s existing rules.
Property owners of leasehold commercial and industrial properties in Chandigarh could soon get relief, with the Ministry of Home Affairs (MHA) informing the Union Territory administration that the long-pending proposal to allow conversion of such properties into freehold is under active consideration.
A final decision on the proposal is expected soon. If approved, the move could benefit hundreds of commercial and industrial property owners who have been seeking greater ownership rights over their properties.
Leasehold ownership gives a person rights over a property for a specified period, while the underlying land remains with the government or the relevant authority. Freehold ownership provides more permanent ownership rights and generally allows easier transfer and sale of the property.
The proposal has been pending for a considerable period, with property owners and stakeholders seeking changes to the existing framework. Conversion to freehold could also make property transactions more straightforward by reducing restrictions associated with leasehold ownership.
Chandigarh already has a framework for converting residential leasehold properties into freehold. Under the Chandigarh Conversion of Residential Lease-Hold Land Tenure into Free-Hold Land Tenure Rules, 1996, eligible residential properties can be converted after meeting prescribed conditions and paying the applicable conversion fee. The Chandigarh Administration’s Estate Office currently lists leasehold-to-freehold conversion as an available property service.
The proposed change for commercial and industrial properties would therefore address a separate category of leasehold assets for which owners have been awaiting clarity. The development comes at a time when leasehold-to-freehold conversion has also remained an important property issue in other parts of north India. In Delhi, for instance, the process has faced a review of conversion charges, while the Delhi High Court recently stressed the importance of processing pending conversion applications.
For Chandigarh property owners, the next step will depend on the MHA’s final decision and the terms under which any conversion scheme is introduced. The applicable conversion charges, eligibility conditions and procedure will determine the extent of the benefit for commercial and industrial property holders.
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