CDA decides to take action against leaseholders for non-renewal. PHOTO: FILE
The Capital Development Authority (CDA) has estimated losses in hundreds of millions rupees due to non-renewal of lease agreements of over 600 commercial properties located across Islamabad.
Lease agreements for the majority of commercial properties expired 10 years ago but leaseholders did not contact the CDA for an extension. In some cases, the lease has not been renewed since the early 90s. Commercial plots are usually leased out for 33 years, extendable to two terms upon expiry.
“We have sent the cases to the Finance Wing for costing,” said CDA Estate Management-II Director Mohammad Ali. When asked about an estimate, Ali said it was definitely in billions of rupees. “Apart from the lease renewal fee, some leaseholders have to pay millions of rupees as delayed charges for non-renewal of agreements, which are multiplying with every passing day.”
Why people don’t renew lease agreements
Ali said owners usually construct illegal structures on their properties in violation of land use norms. “They commit building violations by utilising more space than is authorised.” For renewal of a lease agreement, the owner requires a no-objection certificate (NoC) from the CDA’s building control section. “Because of violations, they are unable to obtain NoC for renewal of lease,” Ali added.
The main reason for not renewing their lease is non-conforming use of land by owners, said a senior official of CDA’s planning wing. The gravity of the situation may be judged by the frequency of non-conforming use of commercial land in Islamabad, he added.
“They don’t contact the CDA to avoid detection of illegal practices as officials ask them repeatedly for bribes. Keeping this in mind they do not extend the lease period,” the official disclosed.
Though the rules provide for the cancellation of the lease, not a single agreement has been cancelled despite the fact that in some cases the lease expired over two decades ago.
Ali said recently a public notice had been published in the mainstream media and notices were served on leaseholders. “If the lease is not extended in 30 days, it will be cancelled.” Ali said this time strict action would be taken. After the notice appeared, some 50 owners contacted CDA for lease renewal.
Published in The Express Tribune, May 9th, 2014.
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