Chief Minister BS Yediyurappa had announced that the state will auction 12,000 corner sites owned by the Bengaluru Development Authority (BDA).
In an attempt to manage the financial crisis due to the lockdown, Karnataka Chief Minister BS Yediyurappa, on April 14, had announced that the state will auction 12,000 corner sites owned by the Bengaluru Development Authority, the planning agency of the city. This, the CM said, was decided by the state cabinet to mitigate the impending financial crisis by raising funds to the tune of Rs 15,000 crore. The corner sites are plots adjacent to the main roads in BDA-formed layouts, which attract higher investments compared to other plots, owing to their potential commercial advantages. The announcement, however, has not gone down well with people, who, for long, are already awaiting the possession for some sites. Some even suggested that it might be in contravention of the Real Estate Regulatory Authority (RERA) Act and other laws Read: Will auction BDA sites in Bengaluru to tackle financial crisis: CM Yediyurappa In the light of the announcement, some pointed out that even though the BDA comes under the purview of the state government, it enjoys autonomy under the BDA Act, which means that, it will be legally wrong to direct money out of the BDA assets to the state-government funds. A section of those who are displeased with the CM’s statements also include buyers of BDA sites at the Nadaprabhu Kempegowda Layout (NPKL). This is primarily due to the fact that the buyers, many of them with steady incomes, were told that the sites will be ready by March 2018. But as per its own estimates, BDA can only hand over the plots only by December 2021 and this would mean that the buyers will be forced to make alternative arrangements for their residence. Further, due to technicalities related to home loans, buyers are also forced to pay additional interest on their loans as the banks have converted the loans to commercial loans because the construction activities were not started within the stipulated time frame. Read: Plot buyers in Bengaluru forced to pay extra interest due to delays by govt body “NPKL is a RERA-registered project. As per section 4(2)(l)(D) of RERA Act, the amounts realised for the real estate project from the allottees, shall be deposited in a separate account to be maintained in a scheduled bank, to cover the cost of construction and the land cost. This shall be used only for such purpose, to cover the cost of the project,” the NPKL Open Forum said in a statement. “RERA authority hearings are already underway in regard to the delay in providing basic amenities at the layout, despite collecting complete site costs upfront from the allottees. If the BDA and the government of Karnataka decided to auction corner sites at NPKL and use these funds for purposes outside of the development of Nadaprabhu Kempegowda Layout, such actions will be in violation of RERA Act,” the statement added. Even though it is unclear at this stage, if NPKL sites will be used for the purpose, Santosh Patil, a member the NPKL Open Forum, said, “It is not an opportune time to auction these sites now, given that the financial environment is not really bright. It is better to sell it only at a time when the economy is booming.” He added, “Since the RERA authority is scrutinising BDA over the NPKL matter, it might warn as to why it is diverting money away from active projects when they are delayed already.”
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