Us Consulate Could Lose Right Over Lincoln House

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[color=#000000][font=Arial][size=1][left]MUMBAI: The US consulate's bid to sell Lincoln House, its sprawling office building in Breach Candy, has come up against more obstacles. The property's decades-old lease documents in effect stipulate that the consulate stands to lose its right on the [url="http://timesofindia.indiatimes.com/topic/Real-Estate-(musician)"]real estate[/url] in the event it sells or subleases the three-storey mansion, legal experts say.

On October 5, TOI had front-paged a story of the Mumbai unit of the Indian Army's Maharashtra, Gujarat and Goa headquarters laying claim to the [url="http://timesofindia.indiatimes.com/topic/Lincoln-House-land"]Lincoln House land[/url].

Following a request from the consulate, two supplementary conditions were added in the property's 1957-lease agreement, of which TOI has a copy. The first condition-sub clause 'd' of clause 2-says that Lincoln House can be used only as an office/diplomatic/consular establishment by the [url="http://timesofindia.indiatimes.com/topic/US-consulate"]US consulate[/url] general or for the US government's use. And the second-the same clause's sub-clause 'e'-mandates that the premises should not be used as a "shop or factory" or "any trade that might be a nuisance to the owners or occupiers of other premises in the vicinity".

Apart from these, the agreement's clauses 3 and 4 say that in the event the property is not used as a consulate by the consulate general or the American government, the consulate should within 20 days inform the "lessor" which, in this case, is the [url="http://timesofindia.indiatimes.com/topic/Ministry-of-Defence"]ministry of defence[/url] (MoD). The ministry, for its part, has to then decide whether the lease conditions have been violated.

"The supplementary clauses effectively mean that the consulate cannot sell or sublease the property as it would mean violating the lease conditions. Since the property has been given to it by the military under specific conditions, the military is free to terminate the lease agreement and take over the property if it violates these conditions," said solicitor Kantilal Unarkat.

Property experts say that, given the army's claim, it would be difficult for the MoD to give a decision in favour of the consulate in case it is informed. "Although the Indian government has good relations with the US, after the Adarsh scam, the MoD would think twice before allowing the consulate to sell or sublease the property," said an expert on the condition of anonymity.

Kapil Gupta, information officer for the US consulate, said: "The US government has had legal counsel review title matters, and intends to work with its real estate brokers, counsel, and host government to effect a lawful transfer of realty interest following the consulate's relocation to new facilities."

Sources say the consulate is learnt to have approached the Centre to change the old lease's conditions to allow the sale to proceed. But since the Centre's decision is pending, the information memorandum on Lincoln House has not been distributed among prospective bidders for 10 days.

Nevertheless, the consulate's bid to sell Lincoln House in Breach Candy and Washington House on Altamount Road has received an overwhelming response. About 80 buyers, including real estate developers, industrialists and hotel chains, have shown interest in the prime properties. Among them, sources say, are two consortiums of US-based high net worth individuals, realty majors like Orbit Corporation and Rohan Lifescape, and developers like Peninsula Land, Seth Developers and Oberoi Realty.

Aniruddh Wahal, director for business development at DTZ International Property Advisors-the consultants for the two consulate properties-said that both local and overseas parties have shown interest in the sale. "But the properties do not qualify for foreign direct investment in terms of its size, value and current use. So, the only way an overseas party can own the property is if a local developer buys it, changes its use to say a hotel and then sells it to him," said Wahal.[/left][/size][/font][/color]
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