All You Need To Know About Gaothan Properties

If you are a property buyer from Maharashtra, you must be familiar with Gaothan properties. There has been a lot of confusion regarding investment prospects of such properties as they are considered illegal, but buyers are lured into making an investment because of the affordability and location advantage they offer.

Here is all you need to know about Gaothan properties and whether you should purchase such options:

What is a Gaothan property or flat?

A Gaothan is the portion of the land of the village which is ordinarily used for settlement. Whether a land parcel in a village or town or city is a Gaothan property is determined by the details as laid out in Section 122 of the Maharashtra Land Record Code. 

Are Gaothan properties legal?

The property built on Gaothan land is legal only if the documents are in place. If the property comes under state schemes like the 12.5 per cent the Gaothan Scheme (GES) of the CIDCO, where they are transferred on payment of transfer charges to third parties, the transferee gets clear, legal and marketable title from the authority to sell or transfer the property.

Generally, the transferee are builders or co-operative societies. Similarly, the purchaser has a legal and valid title on the approval of his membership by the authority to the society on payment of transfer charges. In case of transfer of properties to the transferees, other than the co-operative societies and builders, any further transfer or sale would need development authority's approval on payment of transfer charges. Also note, such approval is available from the authority only on completion of the construction, issuance of the occupancy certificate and execution of the lease deed.

It has to be kept in mind that plots in Navi Mumbai are not freehold, but leasehold. Buyers should not invest in properties, which are not under the state scheme. This legality of the property can be checked on the website of the concerned authority or the local revenue office.

 What is 12.5 per cent Gaothan scheme?

Most of the buildings in Navi Mumbai are built under 12.5 per cent Gaothan expansion scheme. In this scheme, the land was initially allotted by the CIDCO to a local villager in exchange of his farmland acquired earlier for infrastructural purposes. The beneficiaries of this scheme is decided by land revenue document 7/12. The ratio of this acquisition is 12.5, that is if the villager owns 100 square meters of farmland, he will be allotted 12.5 meters of land on which he is free to do construction activity.

Documents required for buying a Gaothan property

Award copy: The development authority issues a letter specifying the name of the villager to give 12.5 per cent of the land acquired by it. It is a proof that the villager is entitled to the land.

Letter of intent (LoI): The development authority issues an LoI to those allottees who hold an award copy mentioning the details about the allotted plot.

Letter of allotment: Proof of allotment of the plot to the villager.

Lease agreement: The development authority signs lease agreement with the villager and it specifies the exact terms of the lease, the time limit for constructing the structure, the fine and penalties imposed in case of any violations of the time schedule, etc.

Transfer charges: After the lease agreement is signed, the allottee needs to pay the transfer charges to the authority.

Final order: Once the lease agreement is signed, a Final Order is issued to the allottee which conclusively gives the rights, titles and interest to him.

Tripartite agreement: This is the agreement between a villager, a third party (developer/construction company) and the development authority in which the villager or the allottee transfers his rights and interest on the land to the third party and authority now admits him in its records as the new owner of the land.

Final order: It is a letter issued by the authority, stating that the rights of title of the plot has been transferred to the builder.