How to convert agricultural land to residential use?

[ecis2016.org] We examine how to change the land-use of agricultural land, to use it for residential purposes

Non-agricultural use of plot only after infrastructure in place, rules MahaRERA

A plot has to be registered with the RERA if it has only a conditional conversion certificate, says the state authority

You are reading: How to convert agricultural land to residential use?

August 17, 2021: In a move that would have a significant bearing on plot sales, positively impacting buyers, the Maharashtra RERA (MahaRERA) has ruled that the conditional permission obtained for conversion of agricultural land into a non-agricultural one in urban areas, without offering any infrastructure, will be considered an ‘ongoing project’.

By that logic, such a project must be registered with the state RERA, since it is yet to receive a completion certificate and remains outside the purview of completed projects, which are not required to register themselves under the provisions of the RERA.

While observing that the permission received to convert an agriculture land into a non-agriculture one was simply the beginning of that process, the MahaRERA said that the process would be understood to be completed once a completion certificate had been provided, approving the conversion.

“The very nomenclature of the completion certificate means that the premises are now complete and fit for human habitation,” MahaRERA chairperson Ajoy Mehta said.

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The order by the MahaRERA came, while deciding on a case where a builder had been selling plots in his project, named Amarai, in Kolad, without providing ‘facilities that were promised and those enumerated in the non-agriculture land conversion order’.

While giving the builder the permission to convert the farm land for non-agricultural purposes in May 2012, the Raigad district collector had put the condition that the developer had to construct infrastructure facilities such as roads, sewage lines, water supply, etc., within two years.

While imposing a fine of Rs 50,000 on the builder for flouting RERA norms, the MahaRERA directed him to immediately register his project with the state RERA.

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As agriculture is one of the biggest economic activities in India, laws have been formulated to protect the country’s fertile lands. This is precisely why even those who own such agricultural land in India, are not free to use it for any other purpose – residential, commercial or industrial. If the owner wants to use his farm land for an activity that does not fall in the category of agricultural activity, a due legal process has to be followed, to convert the land for that particular use. This process is formally known as land-use conversion.

Unless one has received the permission to use his agricultural land for residential use, doing so is illegal and punishable under the provisions of state laws. For example, under the Delhi Land Reforms Act, 1954, the use of agricultural land for non-agricultural purposes in Delhi without permission, can lead to imprisonment of up to three years, or a fine of up to Rs 10 lakhs, or both. According to an amendment made in the law, properties used for non-agricultural purposes without permission, could also be auctioned by an official having authority over the area.

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How to convert agricultural land to non-agricultural land

The authority to allow land-use change is vested in the district revenue department or the planning body. However, note that as land is a state subject in India, laws governing the land-use change are formulated by the state and are enforced in letter and spirit across that state. In case vast tracts of agricultural land have to be converted for purposes other than farming, the owner may have to approach an authority higher than the revenue department or the planning body.

In Uttar Pradesh, the authority to allow conversion of agricultural land for residential purposes is vested in the revenue department. In Jharkhand and Bihar, the power to allow land-use change is vested in the sub-divisional magistrate (SDM) of the area.

While the commissioner of the land revenue department is the authority to grant land conversion approvals in Karnataka, the tehsildars and revenue divisional officers are authorised to grant approval for land-use change in Andhra Pradesh. In Odisha, the tehsildar/sub-collector is the authority concerned, for allowing land-use conversion.

In Rajasthan, the owner has to approach the tehsildar, to get his agricultural land converted for residential use, if the area does not exceed 2,000 sq metres. The same owner will have to approach the sub-divisional officer, if the area does not exceed 4,000 sq metres. For areas exceeding 4,000 sq metres, the owner should approach the district collector.

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In Punjab and Haryana, the town planning department is responsible for granting approval for land-use change. Under the Maharashtra Land Revenue Code rules, owners have to apply to the collector, for the permission to convert the use of agricultural land into non-agricultural purposes. In Delhi, the Delhi Development Authority (DDA) allows land conversion.

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How to convert agricultural land to residential: Documents needed

Apart from an application, a host of documents have to be presented before the authority concerned, to get agricultural land converted for residential purpose. These documents include:

• Proof of identity of the owner.
• Copy of the sale deed.
• RTC (record of rights, tenancy and crops).
• Copy of partition deed (in case the land has been inherited).
• Mutation documents.
• Nil-encumbrance certificate.
• 7/12 extract.
• No-objection certificate (NOC) from the municipal council or gram panchayat.
• Survey map.
• Land utilisation plan.
• Portability of water certificate from a recognised water-testing laboratory (in case of farmhouse).
• Project report, in case of housing projects.
• Receipt of payment of land revenue, etc.

Owners can procure some of the land-related documents from the revenue department that keeps a record of such papers, in case these are not already available to them.

Land conversion charges

The conversion charge for land-use change is fixed across Indian states, based on the land area and the collector rate – the larger the area, the higher the conversion fee. A certain percentage of the collector rate is charged, to allow the conversion of agricultural land into residential.

In Rajasthan, a fee of Re 1 per sq metre for an area up to 2,000 sq metres has to be paid, if the land is located in a village with a population of less than 5,000 people. On the other hand, a fee of Rs 2 per sq metre for an area not exceeding 2,000 sq metres has to be paid, if the land is located in a village with a population of more than 5,000 people. In the same village, a charge of Rs 4 per sq metre has to be paid, if the area exceeds 2,000 sq metres.

In Haryana, you have to pay Rs 10 per sq metre, to get your farmland converted to residential use. While 10% of the property value has to be paid as conversion charge in Bihar, 50% of the total cost of land, as determined through the ready reckoner (RR) rates, has to be paid as the conversion fee in Maharashtra. In Delhi, the conversion charges vary from Rs 14,328 to Rs 24,777 per sq metre and additional floor area ratio (FAR) charges have been fixed from Rs 3,039 to Rs 7,597 per sq metre in various industrial areas.

Can I apply for land-use conversion online?

Several Indian states currently allow online land-use conversion. Using the official portals in these states, the owner can apply for conversion online and submit the copies of the documents online. These states include Andhra Pradesh, Karnataka, Punjab, Haryana, Rajasthan, West Bengal, etc.

Conversion of land from agricultural to non-agricultural: How long does it take?

Depending on the state where you are applying for land conversion, it may take between three and six months, to get a conversion certificate issued. Considering that a host of documents have to be verified and authenticated, the approval might sometimes take longer than expected. In states where the online conversion facility is available, the process could take less time.

“Once the authority receives an application for conversion of agricultural land into residential, they first verify if all the documents required for the conversion have been submitted. The second step, is to check the veracity of each document. Since agricultural land is often owned jointly by several people, all efforts are made to ensure that the applicant has the approval of the other parties concerned, for the conversion. All this is a time-consuming process,” says Amresh Shukla, who works as lekhpal in the UP land revenue department.

Dos and don’ts for converting agricultural land to NA land

• Your application for conversion of agricultural land to non-agricultural (NA) land would immediately be rejected, if there are any encumbrances involved. All dues and mortgages against the land must be paid, for it to be eligible for conversion.
• If the land in question is owned by several people, each owner will have to submit their ID proofs, along with proof of their ownership of the land.
• There is a time limit within which the conversion has to take place. If that timeline is breached, the owner will lose his right to change the land use.
• Penalties are imposed on the owner, in case he uses the land for a purpose other than the one mentioned in his conversion application. In Bihar, 50% of the conversion fee has to be paid as a penalty, if the owner is guilty of misusing the land. In other states, the penalties would not only involve monetary action but legal action, as well.
• The fee payment receipt has to be kept safely as it acts as proof of the conversion, too. While this receipt must be kept safe till the time a conversion certificate has been issued for the land, it should also be kept safe for future reference.
• Unlike individual owners, developers are required to submit an even larger number of documents while applying for land-use change, to develop large housing projects.
• Even though NRIs are not allowed to buy agricultural land in India, they will be within their rights to make the purchase, if such a land has been converted for residential purposes following the due process.
• There is no specific timeline within which the land conversion certificate can be issued to the applicant. Keep in touch with the authority concerned, to get updates on the same.

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