Jaya Prasad Regmi, deputy administrator at the Guthi Sansthan, was recently informed by a lawyer that a tenant was in the process of building a multi-story building for commercial purposes on a piece of land belonging to the Sansthan.

The details, however, were sketchy.

According to Regmi, the law itself allows tenants, those using Guthi land for years, to use the land in whatever way they wish. “There is nothing much we can do,” Regmi told the Post. “As long as they pay kut (a type of tax) regularly, as per the Guthi Sansthan Act, we cannot intervene.”

Taking advantage of the legal provisions, tenants, usually called mohi in Nepali, have been using Guthi lands for various purposes including commercial ventures.

According to the Sansthan, over 300,000 ropanies of Guthi land is currently occupied by tenants and only 51,000 ropanies of land is under the complete ownership of the Guthi.

In Kathmandu, Lalitpur and Bhaktapur, tenants are using 53,254 ropanies of Guthi land, the value of which is far higher compared to lands outside the Valley.

“Despite the commercial importance and value of land in places like Kathmandu Valley being high, the kut to be paid by the tenants nationwide is the same,” said Saroj Thapaliya, spokesperson for the Sansthan. “The maximum kut we receive from a tenant per ropani is 28 pathis (approximately 68 kgs) of paddy grain.”

This is the kut tenants are expected to pay for arable land, but tenants pay less if the land is not used for agricultural purposes.

According to the Sansthan, it collected just around Rs10 million from tenants who were using over 300,000 ropanies of land across the country in the fiscal year 2017-18. “Based on the profit tenants across the country are making, the revenue we are getting is peanuts,” said Thapaliya.

As per the current legal provision, a tenant can build a house on Guthi-owned land, but they should take prior approval from the Sansthan and should pay a certain fee.

The Sansthan charges anywhere between Rs 14-Rs18 per square feet as fee to tenants to allow them to build a house on Guthi-owned land. After building the house, the tenants can use the house in whatever way they want.

“We don’t care if the tenant has rented it for residential or commercial purposes,” said Thapaliya.

But since fiscal year 2017-18, the Sansthan has introduced a new rule under which the Sansthan charges an additional fee to the tenant if they lease out Guthi-owned land for commercial purposes, such as building a commercial complex or an industrial unit, among others.

“As per this rule, we charge 10 percent of the amount that was agreed upon between the tenant and the person they are leasing the land out to,” said Thapaliya.

According to the Sansthan, it has charged this fee to only one tenant so far, a resident of Nala, Banepa, who leased out Guthi land to an industrial unit.

Sansthan officials say there is little they can do to extract benefit from their own land because of old and weak legal provisions.