Holders of Occupancy Class II land and government-leased properties in Pune can now mortgage the land, flats and commercial units built on it to banks and financial institutions, subject to prior permission from the district collector and payment of prescribed mortgage fees, according to a clarification by the Revenue Department.
The decision applies to government land granted for residential, industrial and commercial purposes. It also covers properties provided for educational, medical and cooperative housing purposes. The clarification creates a formal route for owners and institutions seeking loans against such properties while retaining the original tenure conditions attached to the land.
The land will continue to remain Occupancy Class II property or government-leased land after the mortgage transaction. The mortgage will not alter the underlying tenure or convert the property into another category. Permission from the district collector will be limited to the amount of the loan that has been sanctioned.
For residential properties, including land or flats provided for residential, educational, medical and cooperative housing purposes, the mortgage fee will be 0.25 per cent of the loan amount. The fee for industrial and commercial properties will be 0.50 per cent. The applicable fee must be paid in advance before the district collector’s office grants permission for the mortgage.
The Revenue Department’s clarification follows changes to the land revenue law intended to provide a legal basis for the mortgage process and address court disputes concerning the validity of mortgage fees. The procedure therefore places the district administration at the centre of transactions involving government land, even when the property is being used as collateral for a bank or financial institution loan.
A mortgage completed without prior permission can be regularised by the district collector, but the applicant may have to pay twice the prescribed fee as a penalty. The provision gives the district administration authority to formalise transactions that did not follow the required approval process, while imposing an additional financial cost on the property holder.
The rules also apply if the borrower defaults and the mortgaged property has to be sold or auctioned. Prior permission from the district collector will be required before such a sale or auction can take place. Any transfer fee and other dues payable to the government must also be paid before the transaction is completed.
For Pune’s residents, housing societies and businesses holding properties on government-granted or leased land, the clarification provides a defined administrative pathway for raising finance. The permission requirement, advance fee payment, loan-specific approval and restrictions on sale or auction will remain key conditions of using these properties as collateral.
