Many real estate companies bypass the Land Reforms Act and hold large tracts of agricultural land in order to develop them as real estate projects at a later date. The provision of Land Reforms Act states that a family with five members can maximum own 15 standard acres of agricultural land. Additional five acres is allowed for every member of the family, but all put together the maximum a family can own cannot exceed 30 standard acres. This ceiling is applicable for companies as well. If the provisions of the Act are strictly applied then many real estate companies have to give up the land they have hoarded in the name of land banks or land reserves. The State Government in 1999 repealed the Tamil Nadu Urban Land (Ceiling and Regulation) Act and with it the ceiling on how much an individual can hold urban land has been abolished. However, the provisions of Tamil Nadu Land Reforms Act are still in force and it imposes ceiling on agricultural land holding.
Many real estate companies have declared that they have large land banks ranging from 500 to 10,000 acres.
The company or the individual has three kinds of arrangements for holding lands. Some are owned by the subsidiary companies and in some cases the company owns only development rights to the land. In addition to these two arrangements, the companies also entirely own the lands.
The land entirely owned by them is substantially large to attract the provisions of Land Reforms Act. For example, three large public limited real estate companies in their offer documents have declared that they own 67 acres, 500 cares and 46.63 acres respectively.
There are also many more real estate companies, big and small, which hold large tracts of agricultural land for future development. Officials of the Registration department told The Hindu that a few months ago, in one of the Chennai suburbs, a land-parcel measuring 100 acres was registered in the name of a single owner. But within a few days the deal was cancelled fearing land reforms action.
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