CONTENTS - Central Public Works Department

SECTION 4
Annexure- I
(Refer Para 4.13)
(1) Assessment/Re-assessment of fair rent relating to private buildings taken on lease by the
Central Government Departments.
(2) Authority to issue rent reasonableness certificate.
(1) Reasonable rent shall be assessed according to two alternate methods:
(i) Recognized principles of valuation and
(ii)Prevailing market rent.
(2) Land rate as per records of Appropriate Authorities or Valuation Cell of Income Tax Department
shall take precedence over the land rate notified by local Revenue authorities.
(3) In case of premises proposed to be hired being ready built property/space, the current composite
cost of acquisition shall be taken as net value of the property without any further adjustment for
depreciation according to its age or on account of under/over utilization of FAR, if any.
(4) Rent shall be inclusive of Municipal Taxes but element of Municipal Taxes shall be indicated in
the Certificate leaving the final decision to the hiring department whether to pay composite rent or
reimburse municipal taxes to the owner separately or to pay the same directly to the local body.
(5) The date from which the rent is to be assessed and also the period the assessed rent shall
remain effective for, shall be decided by hiring department and hence no such period shall be
indicated in the Certificate.
(6) In case the figure as per method (ii) referred to in Para (1) above is lower, only this figure shall be
intimated as reasonable rent. However, if the figure as per method (ii) works out to be higher,
both the figures shall be intimated as a range of reasonable rent leaving the final decision to the
hiring department to negotiate and settle the rent keeping in view this range. It shall be for the
hiring department to see if the rent as assessed by CPWD is to be restricted to any specified limit
in view of the terms and conditions of the existing lease agreement or due to any other relevant
instructions issued by the Competent Authority.
(7) Rent Reasonableness Certificate shall be issued strictly as per modified model formats, given in
the enclosed Annexure-IA&IIA.
(8) Necessity for re-assessment of rent, for whatever reasons, whether during the currency of the
lease agreement or after its expiry, and the effective date therefore shall be the date of receipt of
the request of the owner or the date from which revision is due after expiry of existing lease
agreement, whichever is later.
(9) The Hiring Committee on account of subsequent increase/decrease in municipal taxes, if any,
shall not entertain the request for revision of rent. It shall be for the hiring department to settle the
same right in the beginning as to how subsequent changes shall be dealt with.
(10) All rent assessment cases shall be dealt by a Hiring Committee associating a representative of
Hiring Department, if the latter is so willing. Jurisdiction of a Hiring Committee shall also include
satellite and twin cities/towns.
REVISED GUIDELINES
1. The reasonable rent shall be relevant to a date (referred to hereafter as date of assessment’) as
specified by the Hiring department. The relevant date in respect of reassessment of rent shall be
the date of receipt of request of the owner or the date from which the revision is due after expiry of
existing lease agreement, whichever is later and the rent shall be assessed according to the
following two alternate methods-
(i) On the basis of recognized principles of valuation; and
(ii) On the basis of the prevailing market rent.
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