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Buying a site? Play it safe

Select a layout that is fully developed, and verify all title deeds, says R.P. Deshpande

People invest in land either for constructing their dream home in the near future or for speculative

gains. Land value appreciates much more than the returns from other investment means such as bank

deposits, shares, gold and mutual funds.

One needs to be extra cautious while investing in land, as land dealings are complicated and the

authorities have little control over the haphazard development of residential layouts.

Let us see how residential layouts have been developing in and around Bangalore. As per Town Planning

rules, all land are agricultural land and anybody desirous of carving residential sites out of landed

property has to approach the DC (District Commissioner), requesting for change of land use from

agriculture to residential. The DC will verify whether the property comes under residential zone as per

the CDP (Comprehensive Development Plan, also known as Master Plan) issued by the State Town

Planning authorities. After collecting the requisite fee, the DC will issue conversion order for using theland for residential purpose.

The next step for the land owner/the developer would be to approach the planning authority with the

layout plan drawn by a registered engineer or architect, as per the bye-laws of the planning authority.

The Bangalore Development Authority (BDA) is the sole planning authority for approving layouts under

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its jurisdiction consisting of areas falling under erstwhile BMP (Bangalore Mahanagara Palike), seven

CMCs (City Municipal Councils), one TMC (Town Municipal Council) and specified villages surrounded by

CMCs. BMRDA (Bangalore Metropolitan Region Development Authority) has the authority to approve

layouts outside the BDA areas and the jurisdiction extends up to 50 km (approximately) from Vidhana

Soudha, as per the BMRDA Act, 1991.

The planning authority concerned will approve the layout and will release a list of site numbers, which

can be marketed before completion of developmental works. On satisfactory completion of all

development works such as laying roads, providing water, electricity and sewage connections etc., the

planning authority will release the remaining sites for sale.

Wrong method

This appropriate procedure is found to be followed by only 20-25 per cent of the developers. In the past

two decades, a majority of developers in and around Bangalore have colluded with corrupt government

officials and have developed layouts which have no basic amenities. The regulatory authorities have

been mute spectators and have done nothing to prevent the haphazard growth of the city.

The methods followed by most of the developers include developing layouts without land conversion

and without getting layout plans approved by BDA/BMRDA. Most of the time it is seen that such layouts

have been approved by Village Panchayaths/CMCs with layout plans permitting narrow roads and no

other basic amenities provided. The layouts have been sold on paper even in green belt' areas (area

reserved for no development), land reserved for commercial/industrial purpose, land on tank bunds

(which actually are owned by the government) and even the land notified for acquisition by government

agencies. There are many layouts with fabricated conversion orders. Thousands of investors have burnt

their fingers by investing in such shoddy deals.

Some fly-by-night' operators have collected huge sums of money from purchasers and have vanished

without completing the development works and without conveying the title to the purchasers.

Precautions

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If you are planning to buy a site in and around Bangalore, select a layout which is either approved by

BDA or BMRDA and select the site with a particular number approved for sale, as mentioned in the

letter issued by BDA/BMRDA. Collect copies of property documents and various approvals obtained by

the developer and engage an expert lawyer to verify the title to the property.

If the layout is large, the developer may not part with copies of property documents and in such a case,

collect copies of project approval letters issued by banks and Home Finance Companies (HFCs). Engage

the services of an advocate for verifying the original title deeds to ensure that the developer has not

mortgaged the property for getting project finance. If project finance has been obtained, engage your

advocate to verify original title deeds at the particular bank/HFC which has granted the project finance.

Ensure the release of the mortgage on the property selected by you, before sale deed is registered in

your favour.

As fake documents and fabricated approvals are in circulation, engage your advocate for visiting DC's

office, BDA/BMRDA office etc. to verify the approvals obtained by the developer.

Select a layout which is fully developed, even if the cost is 10-15 per cent more as compared to layouts

under development, as this will avoid ambiguity whether developer will be able to complete all

developments, as promised, within the specified time-frame.

Don't get carried away by the attractive price quoted (may be up to 50 per cent less as compared to

neighbouring layouts approved by BDA/BMRDA) and assurances for approvals in the near future by a

developer who has developed the layout with short-cut' measures as explained above and select only

an approved layout.

( to be continued)

(The author is a Director of Institute of Home Finance and can be contacted at

deshpanderp2007@gmail.com)

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