Did your builder overcharge lease rent?

Lease Rent: All the Group Housing projects in Noida and Greater Noida are on 99 years lease plan. What that basically means is even if your property is registered/sub-leased in your name, Noida Authority is the ultimate owner for the plot. It is sub-leased to you through the Builder.

Because the land is leased out, Noida Authority charges lease rent from the lessee for the usage of this land. Lease rent is calculated based on the cost of the land as mentioned in the lease documents. Lessee/builder has an option to choose one of these payment plans:

  1. One time rent which is 11% of the registry value of the plot.
  2. Recurring rent,  1% of the registry value of the plot every year.

Most of the builder choose payment option #1 to save on recurring charges. You can find lease rent charges in your Payment plan and is charged anywhere between 75 – 150 psf. You would be surprised to know that most of these builders have overcharged us by 25-50 psf for lease rent.

With current FAR and project density it should be 50-75 psf. This figure shall come down further with FAR being raised to 3.5 from existing 2.75.

Now that you know what the lease rent is, let’s understand how it is calculated. Below table shows lease rent calculated for one of the Noida builder. After filing RTIs, buyers of this project learnt that they were overcharged by approx 30 crores of lease rent.

Plot Area (A)164129Sq. Mtrs
Rate of plot (B)22700INR/Sq. Mtrs
Total premium of plot (A) * (B) / 10000000 = (C)372.6Crores INR
One time lease rent - 11% of (C)41.0Crores
Recurring Lease Rent - 1% of (C)3.7Crores
Now, consider a project being developed on this plot has following specifications
Total saleable area (D)7200000sqfts (as specified In Form 12)
Lease rent charged by builder (E)100INR/sqft
Total lease rent raised from buyers (D) * (E) / 10000000 = (F)72.0Crores
Difference between One time
lease rent (based on 11% & not on 1%) & total collected from buyers (F) - (C)
31.0Crores

When The Logical Buyer confronted some big builders on this issue, they gave us weird explanations which are illegal. Some of them seems to have mend their ways and now mention Lease rent : as applicable in payment plans. However, if you think this corruption should come out, please share this article with every home buyer.

You can download the excel sheet from here Lease Rent Calculation

You would need to know the Area in Sq mtrs, Allotment rate, saleable area and lease rent charged by builder.

To know exact lease rent for your group housing project in Noida/Greater Noida, you can also file and RTI. Sample RTI form application is attached here: RTI – Lease Rent for Group Housing Projects

Need help with RTI : File an RTI with NOIDA / GREATER NOIDA Authority, a step by step Guide

 

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