Chandigarh Housing Board finds no takers for leasehold properties

Dushyant Singh Pundir

Chandigarh, January 28

The Chandigarh Housing Board (CHB) has failed to find buyers for its residential as well as commercial properties put up for auction on a leasehold basis.

The CHB had invited e-bids for the sale of its 13 built-up residential units on a freehold basis, 24 built-up residential units on a leasehold basis and 108 built-up commercial units on a leasehold basis.

The bids were opened today as per the schedule, and the CHB could sell only three residential units on a freehold basis and there were no takers for the residential and commercial units on a leasehold basis.

The three freehold residential units fetched Rs1,83,93,552 against the total reserve price of Rs1,78,11,578.

Gaurav Singh, a resident of Sector 45, said the CHB would not get a good response to its properties on a leasehold basis unless these were converted into freehold units. He said the prices of the units were comparatively high and the board should bring the rates within the reach of the prospective buyers. In its earlier auctions also, the CHB had failed to elicit a positive response to its properties on a leasehold basis.

In an e-auction held on December 27 last year, the CHB could sell only five of the 113 commercial units on a leasehold basis to the highest bidders. Similarly, only three of the 27 residential units were sold on a leasehold basis. The CHB also received a lukewarm response to its residential properties on a freehold basis as it could sell six of the 19 units put up at the e-auction. In an e-auction held on September 1 last year, the CHB could sell only two of the 149 commercial units on a leasehold basis, two of the 33 residential units on a leasehold basis and eight of the 34 residential units on a freehold basis.

On August 10 last year, the CHB had received five e-bids against 151 commercial units on a leasehold basis and could sell only three units to the highest bidders. Similarly, 15 e-bids were received against 38 residential units and only five units could be sold to the highest bidders. The CHB is selling those properties on a leasehold basis that are constructed on land allotted by the UT Administration on lease. Similarly, residential properties constructed on land allotted on a freehold basis are being sold on a freehold basis.

In case of leasehold property, the allottee is required to pay an annual ground rent at the rate of 2.5 per cent of the consideration amount for 33 years, followed by 3.75 per cent for the next 33 years and 5 per cent for the subsequent 33 years.

The conversion of a leasehold property into freehold is a costly affair. The conversion charges for residential properties may range from 12 per cent to 15 per cent of the consideration amount. However, the conversion is not permitted in the case of commercial properties. The UT had recently written to the Cente for approval to allow conversion of leasehold properties to freehold in the case of commercial and industrial plots.

e-auction gets poor response

• The CHB had invited e-bids for the sale of its 13 built-up residential units on a freehold basis, 24 built-up residential units on a leasehold basis and 108 built-up commercial units on a leasehold basis
• While only three residential units on a freehold basis could be sold, there were no takers for the residential and commercial units on a leasehold basis
• The three freehold residential units fetched Rs 1,83,93,552 against the total reserve price of Rs 1,78,11,578