The Bangalore Development Authority (BDA) is set to implement a one-time non-construction fine of 10% on allottees who do not commence building their houses within three years of site allocation. Officials have indicated that this regulation will be enforced rigorously, and sale deeds will not be issued until construction is finalized.
This measure is aimed at beneficiaries who have either failed to construct homes or have illegally transferred their plots, despite benefiting from significant increases in land values. However, exemptions apply to the Arkavathy and Nadaprabhu Kempegowda Layout (NPKL) areas, where delays, legal disputes, and inadequate infrastructure have hindered allottees from initiating construction.
Under this scheme, the BDA allocated sites at non-market rates exclusively to applicants without existing homes. It executed agreement-cum-sale deeds that prohibited property transfers for a decade, which was later reduced to five years. While numerous allottees have constructed homes, many others have left their plots vacant after making minimal payments of around Rs 5,000 in the 1960s and 1970s. Currently, many of these sites are valued at nearly Rs 10 crore.
According to regulations, the BDA has the authority to reclaim such sites or recover costs in cases of violations. However, court rulings have prevented the authority from reclaiming sites and instead mandated the establishment of a penalty-based regularization policy. Until recently, penalties were imposed as fixed amounts — Rs 1.5 lakh for 20×30 ft sites, Rs 2 lakh for 30×40 ft plots, and Rs 4 lakh for 60×40 ft sites. Last year, the BDA board revised this policy, setting the penalty at 10% of the current guidance value, regardless of site dimensions.
This new policy took effect on August 19, 2024, and its enforcement will now be intensified. With guidance values rising sharply, penalties have escalated into lakhs — and in premium areas, even crores — resulting in significant pushback from violators. For example, a Jayanagar allottee who purchased a 50×80 site for approximately Rs 5,000–Rs 10,000 could previously regularize the violation for nearly Rs 10,000.
Currently, the property is valued at approximately Rs 10 crore, and with the implementation of the new 10% guidance value rule, the penalty could reach Rs 1 crore, a sum that many individuals find difficult to pay.
This situation has led to significant issues, prompting the BDA to escalate the matter to the board. During the upcoming meeting, all relevant details will be presented to the board, and it is possible that penalties may be further increased,” the official stated.
The BDA has also identified instances where allottees are approaching the authority solely for the purpose of obtaining sale deeds for e-khata. Once the khata is obtained, they reportedly neglect to regularize any violations while still benefiting from full ownership rights.
To date, approximately 50 such cases have been uncovered. Illegal transfers conducted during the restricted agreement period will also be subject to examination. Such infractions will incur a 25% penalty based on the loss transaction value for transferring sites without the necessary BDA authorization, as indicated by BDA officials.
Haris NA, the chairman of the BDA, remarked: “Concerning the penalties for allottees who have not constructed homes in BDA layouts — with the exception of Arkavathy and Nadaprabhu Kempegowda layouts — the regulations are explicit: they are required to build, or they will face penalties. Additionally, they will not receive their sale deed if construction is not finalized. We have requested that this regulation be enforced rigorously.”
