The Maharashtra Industrial Development Corporation (MIDC) offers land and facilities to businesses as a major driver of industrial growth in the state. Sometimes, companies might want to sublet parts of their allocated plots to other parties. Subletting is governed by certain rules and fees as per MIDC.
What is Subletting?
Subletting is the procedure by which the original lessee (the allottee) rents out a portion or all of their allocated land to another party (the sub-lessee) for a certain period. Businesses employ this to make use of unused space or to generate more revenue.
MIDC's Subletting Guidelines
1. Eligibility for Subletting:
- Subletting is allowed only for the same purpose as the initial allotment.
- The sub-lessee will have to follow MIDC's development and operation standards.
2. Application Process:
- The allottee has to make a formal application to MIDC, specifying the subletting arrangement, such as the area to be sublet, the sub-lessees information, and the proposed use.
- MIDC examines the application to ascertain whether it conforms to its policies and may give permission subject to the information given.
3. Subletting Charges:
MIDC charges subletting charges as a percentage of the prevailing land rate for the area to be sublet. As of the latest available data, the charges are:
- 3% of the MIDC land rate annually for Industrial and Commercial use.
- 1% of the MIDC land rate annually for IT and ITES use.
- These fees are to be paid in advance for the term of the subletting agreement.
Key Considerations:
Subletting Term:
- MIDC generally issues subletting permissions for terms not exceeding 10 years.
- The subletting fees are revised every three years to take into account any adjustments in MIDC's land rates.
Renewal and Penalties:
- Subletting permissions can be renewed on the application.
- Failure to secure advance approval for subletting will incur penalties, e.g., cancellation of the lease agreement.
Conclusion
Subleasing MIDC plots can be a strategic move for companies that want to reduce their vacant areas or generate additional income. However, one must follow the MIDC guidelines and pay the fees as per time to be secured from any penalties. For more information, please send us your queries at info@mahaindustry.com
