‘Some steps to revive the market’
For property owners it is always better to go in for an A-Khata property, advises market expert Preenand P., in an interview with Ranjani Govind
Dec 16, 2013
Source : The Hindu

 

BANGALORE: The State Government last month approved registration of ‘B’ khata certificate (title deeds) buildings constructed on revenue land in the Bruhat Bangalore Mahanagara Palike (BBMP) limits.

The Cabinet permitted the BBMP to issue ‘B’ khata to buildings/houses on revenue land and also provide electricity, water, drainage and other facilities, an important decision, all set to bring in nearly Rs. 1,000 crore revenue to the government. Minister for Law and Parliamentary Affairs Minister T.B. Jayachandra had said the decision would allow the re-sale of property and boost the real estate market in the city.

Market observers in the city feel Bangalore has nearly 25 lakh properties which have been ‘deviated’ in their building methods. But apparently the confusion prevalent in the system (of what makes up the deviation that decides the penalty charge) is something the entire process would be subjected to. The BBMP has however made clear that ‘B’ khata would be issued only to existing buildings.

Ironically though, after a month of this announcement too, the registrations that were expected to pick up by a huge percentage, is not yet happening, according to a government official. Although the entire Khata-scene is ridden with rules and matters that make the whole issue a hazy one, some experts in the field say that the government has made it clear that property owners can obtain ‘A’ khata by regularising their constructions under the Akrama-Sakrama scheme by paying penalty to the government later.

The Cabinet has decided to reply to Governor H.R. Bhardwaj on the Karnataka Land Revenue (Second Amendment) Bill, 2012, also known as the Akrama-Sakrama Bill, which was returned to the government earlier for further clarifications. It may be recalled that the Bill was passed in both the Houses of the State legislature during the previous BJP government. The Bill aimed at regularising construction of houses on revenue land in urban areas across the State.

The Hindu-HABITAT spoke to industry expert Preenand P. to understand the prevailing Khata scene and make it more comprehensible to property owners.

Some excerpts…

From the B Khata not being a valid legal paper for claiming ownership to the Government approving the document for the registration process before Akrama-Sakrama falls into place, what would it mean to property owners/buyers right now?

Post the process for assessment of property tax, the BBMP found out that there were several unauthorised constructions in the city as they were built on land without proper approvals. In such cases the property owner before construction of the building should have followed a process where he was involved with a layout approved by the BBMP or BDA or any other regulatory body which includes several other civic amenities such as roads, hospitals, common area, public parks so on and so forth.

We feel that only 5% of the sites in Bangalore are eligible to apply for an A-Khata because of minimal deviation which can be regularized. Constructions with minimal deviation and which have followed the norms set by regulatory bodies to a certain limit are only eligible for regularization, as it is seen now, the remaining will be titled as B-Khata itself.

Despite what many think, B-Khata is not an entitlement to the property, but simply an acknowledgement that tax for the said property is being paid to the Government. It is not a ‘title deed,’ it is just an identification entered in a register titled “B” and hence the name B-Khata. B-Khata is not considered as a valid Khata extract.

For buyers/property owners it is always better to go in for an A-Khata property, because a person with B-Khata is not entailed to have a building license, trade license or loans from banks or any other financial transactions which makes it difficult for further action. It is important to possess a Khata document for any sale, registrations or transferring of property to others as it contains important information such as property details, name of the owner, size, building, location and others. With B-Khata registration of property, a person will not be able to avail loans from nationalized banks. Therefore, it is suggested that the buyer invests in an A –Khata property with all clearances to avoid future financial hurdles.

What are the advantages for a government in this?

It is not just about revenue, it can also be a helping hand for people to actually rectify their mistakes in their construction, to a very large extent. Yes, property that comes under the B-Khata results in good revenue for the Government, which may be used for various development activities in the city.

This revenue accumulation will enable infrastructural development and encourage resale of sites/properties and give the sector a new beginning.

What is the risk involved for a buyer/ end user in doing this? The Akrama-Sakrama is anyway round the corner for paying of penalty and regularisation?

As of today, B Khata is an invalid title, however certain property owners with minimal deviation obtaining a B-Khata can be relieved as the Akrama – Sakrama scheme will be in place soon according to the Government. House owners can now regularize deviations in both commercial and residential properties by paying a penalty.

The scheme allows regularising buildings with setback area or floor area ratio, however encroachments will continue to be illegal. For instance, buildings on footpaths, or on any Government property, public parks and so on will be at a risk of demolition.

Residential buildings with irregularity up to 50 per cent and commercial buildings up to 25 per cent will be permitted regularization according to the Act. Depending on the percentage of irregularity seen in the residential and commercial, a penalty charge is worked out for regularization. The penalty amount is yet to be decided by the Government.

Is Karnataka the only state which has come up with a B Khata?

Property regularization is noticeable in most of the Indian states, it is only named differently. It is important to regularize sites, be it in any part of India because the Government provides necessary infrastructure such as water, electricity and sewage to the building once regularized. Moreover it also sees a price appreciation as it comes under the legal norms.

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