Bangalore
Development Authority Allotment of Site Rules 1984 has been amended and the
Government of Karnataka has brought back the Lease-cum-Sale method.Though
Lease-cum-Sale method was in vogue for many years, the relevant rule (Rule
No.7) was omitted by Notification No.UDD/411/MNJ/2000(P),dated 23-10-2000.But,the
Government of Karnataka by its Notification No.UDD/59/MNJ/2005, dated 27-4-2005
has reintroduced the Rule No.7 with effect from 27-4-2005.
CITB AND BDA:
Many
cities across the world have development authorities. They are the Planning authorities also. They
control and regularize orderly growth of cities. Earlier, Bangalore had City Improvement Trust
Board (CITB) which was replaced by Bangalore Development Authority (BDA) from
8-3-1976 by a separate Act “Bangalore Development Authority Act 1976(Karnataka
Act 12 of 1976)”.
The
objective of the Act is for development of Bangalore and areas adjacent thereto.One of the major functions of BDA is to acquire land around Bangalore, form
Layout and allot sites to the applicants.
What is Lease-cum-Sale?
Allotment
of sites by BDA is not a commercial venture, but purely to serve the social
cause of providing a shelter to the needy.The Authority has to ensure that its purpose is not defeated by land
grabbers, middlemen concerning the allotment.
Bangalore
Development Authority (Allotment of Sites) Rules 1984 provides that any one or
any member of whose family owns a site or an house or has been allotted a site
or house by BDA or a Co-operative Society registered under Karnataka
Co-operative Societies Act 1969 or any other authority within Bangalore
Metropolitan Area is not eligible to apply for sites from BDA. This is to ensure
that only persons, who do not own site or house in Bangalore Metropolitan Area,
are provided with sites at affordable price much less than market value.
Lease-cum-Sale
method further ensures that the allottees do not misuse the site and sell it to
make a fast buck.The allottee will not get absolute ownership of the site.He
will enter into lease-cum-sale agreement with the BDA and for certain period,
he will be only a lessee of the BDA and does not have authority to sell the
property. Further, he has to construct a
house as per the approved plan in the allotted site within specified period.
Only after lapse of lease period and on fulfilling the conditions like construction of house, BDA will execute Absolute Sale Deed in favour of
allottee.However, the user is entitled to avail Housing Finance for the
purpose of construction of house building.
As
stated earlier, this method was omitted from 23-10-2000 and BDA was executing
the absolute sale deed to the allottee immediately after the full payment made.This has reduced the work load procedure wrangles at BDA office and the
allottee has an asset to fall back in case of necessity and emergency.
Misuse:
The
abolition of Lease-cum-sale which was done to help the public was misused.Though the Site Allotment Rules prohibits any
one who owns a site or a house from applying for allotment, many landlords,
middlemen, and real estate agents started applying for sites through proxy
candidates or on their own name suppressing the facts.There are many poor people, slum-dwellers who
sign the applications for some money.As
soon as the allotment was done, the sites were sold at the prevailing market
price making huge profits.This is in a
way contributed to price spiral apart from defeating the very purpose and
social cause.
Reintroduction:
To
avoid this blatant misuse of BDA sites, lease-cum-sale was reintroduced by
Government Notification dated 27-4-2005.The reintroduced rule (Rule 7) reads as
follows:
Rule
No.7:The site allotted under the rules shall be deemed to have been leased to
the allottee on lease, unless the lease is determined or site is conveyed in
the name of the allottee in accordance with these rules.During the period of
lease, the allottee shall pay to the authority before commencement of each
year, rent at the rate of Rupees Five per annum, where the area of the site does not exceed two hundred square meters, Rupees ten per annum where the area
of the site exceeds two hundred square meters, but does not exceed five hundred
square meters, and Rupees Twenty per
annum, where the area of the site exceeds five hundred square meters.
Procedure:
The
procedure is as follows:
After
the payment of the value of site, the Authority invites the allottee to execute
Lease-cum-sale deed in the prescribed form within 60 days which will be
registered in the registrar office. The allotted will be put in possession of
the site.The lease-cum-sale agreement contains various conditions like
restriction or alienation of property, time-limit to construct house, ground
rent payable.
The
allottee shall construct a building as per the plans approved by the authority
within a period of five years from the date of agreement.The authority may
extend this period at the request of the allottee.If the allottee fails to
complete the construction of house within five years or permitted period, the
lease will be cancelled.The Authority forfeits twelve and half percent of the
value of the site paid and refunds the balance amount to the allottee.
After
the expiry of ten years of agreed lease period, the authority calls upon the
allottee to get the absolute sale deed executed and registered provided that
the lease has not been cancelled earlier.Though absolute legal title has not
passed to the allottee during the lease period, he shall pay taxes, fees, cess
payable on site or building.
Restrictions, conditions on sale of
sites:
The
allotted site cannot be sold within a period of TEN years from the date of possession.However, the site may be mortgaged in favor of Central/State Governments,Financial institutions to secure loan for construction of building. If the site is sold within a lease period of
ten years, the authority after due notice may cancel the allotment, resume the
site and forfeit the amounts paid.
Surrender of site:
If
the allottee opts to surrender the site during the lease period for reasons
beyond his control like insolvency etc., the authority with the previous
approval of the Government, will compensate the allottees as follows:
a)In
case of surrender of vacant site without building, the authority shall pay
value of site paid by the allottee together with interest at the rate of 12%
per annum.
b)If
the building is constructed on the site, the authority shall permit the
allottee to sell the property provided he pays interest at 12% per annum to the
authority on the value of the site paid.
Implications:
The
revised procedure would curb commercial marketing of the site immediately after
allotment and also partly controls the price spiral. But, in case of absolute necessities and
emergencies,the allottee will resort to alienating the property by executing Power of Attorney by which the purchaser would not get proper title.Though the
BDA rules has provisions to surrender the site, the returns are too meager in
case of surrender of site. As the allottee has to pay interest to the BDA for
permission to sell the site with building, he will look into other means.
Complication of Title:
Of
course, the re-introduction of lease-cum-sale for BDA allotted sites is a right
thing for the genuine end users. However, looking at the modus operandi of the
allottees,they will try to sell the properties by way of GPA/Agreements/
Affidavits/Undertaking etc., which will lead to complication of title.
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