CONTENTS - Central Public Works Department

28 SECTION 4
relevant local/municipal byelaws. If the building as a whole is not proposed to be hired, the
Municipal Tax shall be carefully worked out on prorata basis. The Municipal Tax component
as assessed and considered in the certificate shall be clearly indicated in the rent
reasonableness certificate to enable the hiring department to decide on the manner in which
the municipal tax shall be paid (refer model formats for rent reasonableness certificate at
Annexure IA & IIA).
(b) Maintenance and repairs at the rate of 12% of the annual return on the property as arrived at in
Para 3(vii) (a)(b) above. If any statutory provision exists in the areas binding the landlord to
defray certain minimum expenses on maintenance and repairs, the same shall be duly
accounted for.
(c) Provision for sinking fund, to be ascertained by reference to standard sinking fund tables or
alternatively to be calculated as per standard formula given below:-
0.06
Sinking fund co-efficient (k) = (1+0.06) r – 1
Where, r = assessed residual life of the building in years as referred to in Para 3(i) above.
Annual provision for sinking fund = (k) x (D)
Where, k = sinking fund co-efficient as above
D = Depreciated value of the building referred to in Para 3(i) and (vi) (d) above.
(4) The rent based on the prevailing market rent shall be ascertained by making inquiries preferably in
respect of rented properties/spaces, which have been taken on lease by Government Departments
(Central/State) of Public Sector Undertakings (Central/State) in a comparable locality. If there are
no such properties available for comparison, similar property/space hired by Public Sector Banks/
Private body may also be considered for comparison. The properties shall be compared on the
basis of various parameters as mentioned in the second part of Para 3(vi)(b) above and if the
same are not comparable a careful assessment shall be made for suitable addition or subtraction
as the case may be. It shall also be ensured that the factors for which landlord is responsible, like
maintenance and repairs and municipal taxes in such cases as also the other relevant facilities,
such as, benefit of usable surplus land are on an even keel and if it is not so suitable adjustments
shall be made accordingly. No adjustment shall however be made for under or over utilization of
FAR in either case.
(5) After working out the rents according to the two alternate methods as described in Para 3 & 4
above, the reasonable rent shall be intimated to the hiring department as under:-
(i) If the rent based on the prevailing market rent is lower, only the rent based on the prevailing
market rent shall be taken as reasonable rent and so intimated as per model format enclosed
at Annexure-IA.
(ii) In case the rent based on the prevailing market rent happens to be higher, both the figures
shall be intimated as range reasonable rent (as per model format enclosed at Annexure-IIA),
leaving the final decision to the hiring department to negotiate and settle the rent keeping this
range in view.
(iii) There may be some exceptional situations (like in a very small town/Kasba) where there is no
rented building to be considered as basis for working out the prevailing market rent. In such
cases the market rent may by worked out taking into consideration the rent prevailing in the
nearby town and by giving due weight-age (plus or minus) for relative importance of the town
where the building is situated to that of the town adopted as basis for comparison.
(iv) As the data collected and adopted for assessment of rent are relevant to a particular date and
these are likely to undergo changes subsequently, the existing practice (although not so