Monday, 6 April 2015

BDA RE-INTRODUCES LEASE-CUM-SALE METHOD


Bangalore Development Authority Allotment of site Rules 1984 has been amended and therefore the Government of Mysore has brought back the Lease-cum-Sale technique. Although Lease-cum-Sale technique was hip for several 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 Mysore by its Notification No.UDD/59/MNJ/2005, dated 27-4-2005 has reintroduced the Rule No.7 with result from 27-4-2005.

CITB AND BDA:
Many cities across the planet have development authorities. They’re the design authorities additionally. They management and regularize orderly growth of cities.  Earlier, urban center had town Improvement Trust Board (CITB) that was replaced by urban center Development Authority (BDA) from 8-3-1976 by a separate Act “Bangalore Development Authority Act 1976(Karnataka Act twelve of 1976)”.

The objective of the Act is for development of urban center and areas adjacent to that. one in every of the main functions of BDA is to amass land around urban center, type Layout and allot sites to the candidates.

What is Lease-cum-Sale?
Allotment of sites by BDA isn't a poster venture, however strictly to serve the social explanation for providing a shelter to the destitute.  The Authority needs to make sure that its purpose isn't defeated by land grabbers, middlemen regarding the allotment.

Bangalore Development Authority (Allotment of Sites) Rules 1984 provides that anybody or any member of whose family owns a site or an house or has been assigned a site or house by BDA or a Co-operative Society registered beneath Karnataka Co-operative Societies Act 1969 or the other authority at intervals urban center Metropolitan space isn't eligible to use for sites from BDA. this can be to confirm that solely persons, who don't own website or house in urban center Metropolitan space, area unit supplied with sites at cheap value a lot of but market price.

Lease-cum-Sale technique additional ensures that the allottees don't misuse the location and sell it to form a quick buck. The allotted won't get absolute possession of the location. He can enter into lease-cum-sale agreement with the BDA and sure amount, he are going to be solely a leaseholder of the BDA and doesn't have authority to sell the property.  Further, he needs to construct a house as per the approved arrange within the assigned website at intervals such that amount. Solely when lapse of lease amount and on fulfilling the conditions like construction of house, BDA can execute Absolute Sale Deed in favor of allottee. However, the user is entitled to avail Housing Finance for the aim of construction of house building.


As explicit  earlier, this technique was omitted from 23-10-2000 and BDA was execution absolutely the sale deed to the allottee instantly when the complete payment created. This has reduced the work load procedure wrangles at BDA workplace and therefore the allottee has an plus to fall back just in case inevitably and emergency.

Misuse:
The ending of Lease-cum-sale that was done to assist the general public was ill-used. Although the site Allotment Rules prohibits anybody realestate agency owns a site or a house from applying for allotment, several landlords, middlemen, and realty agents started applying for sites through proxy candidates or on their own name suppressing the facts.  There are several poor folks, slum-dwellers realestate agency sign the applications for a few cash.  As shortly because the allotment was done, the sites were oversubscribed at the prevailing market value creating Brobdingnagian profits. this can be during a method contributed to cost spiral excluding 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 location assigned beneath the principles shall be deemed to own been chartered  to the allottee on lease, unless the lease is decided or website is sent within the name of the allottee in accordance with these rules. throughout the amount of lease, the allottee shall pay to the authority before commencement of every year, rent at the speed of Rupees 5 each year, wherever the realm of the location doesn't exceed 200 sq. meters, Rupees 10 each year wherever the realm of the location exceeds 200 sq. meters, however doesn't exceed five hundred sq. meters, and Rupees Twenty each year, wherever the realm of the location exceeds five hundred sq. meters.


Procedure:
The procedure is as follows:
After the payment of the worth of site, the Authority invitations the allottee to execute Lease-cum-sale deed within the prescribed type at intervals sixty days which is able to be registered within the registrar workplace. The assigned are going to be place in possession of the location. The lease-cum-sale agreement contains varied conditions like restriction or alienation of property, time-limit to construct house, rent owed.

The allottee shall construct a building as per the plans approved by the authority at intervals a amount of 5 years from the date of agreement. The authority might extend this era at the request of the allottee.If the allottee fails to complete the development of house within 5 years or allowable amount, the lease are going to be off. The Authority forfeits twelve and half percent of the worth of the location paid and refunds the balance quantity to the allottee.

After the expiration of 10 years of united lease amount, the authority calls upon the allottee to urge absolutely the sale deed executed and registered only if the lease has not been off earlier. Although absolute legal title has not passed to the allottee throughout the lease amount, he shall pay taxes, fees, cess owed on website or building.

Restrictions, conditions on sale of sites:
The assigned website can't be oversubscribed at intervals a amount of 10 years from the date of possession. However, the location is also encumbered in favour of Central/State Governments, monetary establishments to secure loan for construction of building.  If the location is oversubscribed at intervals a lease amount of 10 years, the authority when due notice might cancel the allotment, resume the location and forfeit the amounts paid.

Surrender of site:
If the allottee opts to surrender the location throughout the lease amount for reasons on the far side his management like economic condition etc., the authority with the previous approval of the govt., can compensate the allottees as follows:


a)In case of surrender of vacant site while not building, the authority shall pay worth of site paid by the allottee beside interest at the speed of twelve-tone music each year.
b)If the building is made on the location, the authority shall allow the allottee to sell the property provided he pays interest at 12-tone music each year to the authority on the worth of the location paid.

Implications:
The revised procedure would curb industrial selling of the location instantly when allotment and additionally partially controls the worth spiral.  But, just in case of absolute requirements and emergencies, the allottee can resort to antagonistic the correctty by execution Power of lawyer by that the client wouldn't get proper title.Though the BDA rules has provisions to surrender the location, the returns are too meager just in case of surrender of site. Because the allottee needs to pay interest to the BDA for permission to sell the location with building, he can examine different means that.

Complication of Title:

Of course, the re-introduction of lease-cum-sale for BDA assigned sites may be a right issue for the real finish users. However, staring at the routine of the allottees, they're going to try and sell the properties by method of GPA/Agreements/ Affidavits/Undertaking etc., which is able to cause complication of title.

More,