Maharashtra Govt Issues New Circular On Conversion Of Leasehold To Freehold Land

Mumbai: The Maharashtra government has issued a fresh circular clarifying and streamlining the process of converting Occupant Class-2 and leased government land into Occupant Class-1 (freehold land).

In a bid to bring accountability and transparency, the circular mandates district collectors must process complete conversion applications within three months from the date of receipt. Applicants who receive a surcharge demand notice must complete payment within three months to move forward with conversion. Failure to pay within this period may result in the plot reverting to Class-2 status (leasehold land). Ramesh Prabhu, chairman of the MahaSewa (Maharashtra Societies Welfare Association) has welcomed the circular stating that it has brought clarity as it mandates the district collector office to clear the application in three months.

The circular extends significant benefits to cooperative housing societies taking up self-redevelopment: 25% of the additional floor space index (FSI) availed during self-redevelopment must be reserved for Pradhan Mantri Awas Yojana (PMAY) beneficiaries. Societies failing to meet this obligation will forfeit the 5% surcharge relief, and premium amounts paid will be absorbed by the government, with the land reverting to Class-2 (leasehold).

Additionally, the circular sets a firm deadline that the societies must initiate redevelopment within 2 years of availing scheme benefits. A one-time two-year extension may be granted by the government, but projects must commence within this extended timeframe to retain eligibility. If the conversion premium exceeds Rs1 crore, district collectors are prohibited from taking unilateral decisions. State government approval is mandatory, and such cases must be forwarded within three months.

The government reaffirmed that forest land, or any land notified as forest area is excluded from conversion provisions. Due to incomplete revenue records and ongoing legal disputes, such lands remain governed by Forest Department registers and are ineligible for Class-1 conversion.