Maharashtra reforms framework for commercial leasing of government land

1. Applicability

   The April Circular applies to:

   • government land held by administrative departments of the State government;
   • government land allocated by the Revenue Department to administrative departments for designated purposes; and
   • government land owned by, or transferred to, corporations, boards, and authorities operating under the administrative control of those departments.
2. Longer lease tenure

   The April Circular permits an initial commercial lease term of up to 49 years, with a one-time renewal of up to 49 years, subject to the continued requirement for the land, compliance with the applicable lease conditions, and payment of the prescribed rent. This effectively allows for a maximum lease tenure of 98 years.

   The revised tenure is intended to address limitations in the earlier framework, under which government land could generally be leased for periods up to 30 years. The longer tenure will provide greater certainty for commercial users and facilitate long-term investment and development of government land, while also supporting revenue optimisation.

   To ensure effective implementation, District Collectors have been tasked with monitoring lease renewals, periodic ground rent revisions, and timely payment of ground rent by lessees.

3. Compliance review before renewal

   The April Circular also introduces a mandatory compliance check before renewal of a lease is processed. The concerned administrative departments must conduct local inquiries to determine whether there has been any breach of the terms and conditions of an existing lease.

   Where a breach is identified, no further leasing action can be taken until the breach has been regularised in accordance with the applicable rules. This requirement is intended to strengthen oversight of existing leases and ensure that renewal decisions are not taken without addressing outstanding compliance issues.

4. Scope of the framework

   The April Circular does not apply to lands leased directly by the Revenue Department for residential, commercial, or other purposes. Such leases will continue to be governed by the applicable Government Orders. The revised framework is therefore limited to lands held by, or through, administrative departments and their subordinate bodies and authorities.

While the April Circular lays down the forward-looking leasing framework, the June Circular addresses inconsistencies in land records relating to government land already leased. It has a dual corrective and regulatory intent: to correct erroneous entries in the Record of Rights and to reinforce the State’s ownership of lands leased to private individuals and organisations.

The June Circular directs District Collectors to rectify the entries in the Record of Rights for all government lands given on lease, irrespective of the duration of the lease. The exercise must be completed within three months.

The corrected records are required to reflect, among other things:

1. Government ownership: The name of the Government of Maharashtra must be reflected in the possession column.
2. Government lessee status: The remark “Government Lessee” must be recorded in the tenure column.
3. Lease details: The Other Rights column must record the name of the leaseholder, the duration and conditions of the lease, together with the notation: “Subject to the conditions of Occupant Class-2 as per Section 3(k) of the Maharashtra Land Revenue Code, 1966” (MLR Code).
4. Occupant Class-2 notification: For leases falling within Section 29(3)(c) of the MLR Code, namely long-term leases of 50 years or more with renewal entitlements executed before commencement of the MLR Code, the relevant records are required to be updated to reflect the status of “Occupant Class-2” within 30 days from the date of the June Circular, followed by submission of a compliance report to the government.
5. Restrictions on transfer in Mumbai: In relation to leases of land situated in Mumbai city, the June Circular requires the Record of Rights to immediately reflect restrictions on assignment or transfer, irrespective of whether the lease predates or post-dates commencement of the MLR Code.