With more than 1.5 lakh illegal properties reported in Bangalore, the state government has formulated the “Akrama Sakrama” scheme to regularise construction of such buildings by paying a one-time penalty fee. 99acres decodes the scheme and analyses how this move will impact the realty landscape of the city.

Bangalore, the Silicon city of India, is one of the top end-user markets. While other cities succumbed to an inventory overhang and withdrawn consumer sentiments, Bangalore remained upbeat on the back of a strong office market and stable residential demand. Despite the city enjoying various advantages, it is also home to many illegal properties across both commercial and residential segments. In a recent affidavit submitted by Bruhat Bangalore Mahanagara Palike (BBMP) to the Karnataka High Court, the city has more than 1.5 lakh illegal properties.

This has created confusion among the homebuyers who have already invested or planning to purchase properties. Hence, to curb the illegal constructions in the city, various governmental announcements such NGT’s order on the buffer zone, civic body’s city-wide demolition drive and Akrama Sakrama scheme were announced as remedial measures.

What is Akrama Sakrama?

As more that 80 percent of the buildings in the city are deemed illegal owing violations from the original building plan, the state government notified the Akrama Sakrama scheme or Karnataka Town and Country Planning (Regularisation of Unauthorised Developments) Rules 2013 after making amendments to several Acts, which includes the Karnataka Town and Country Act, shares Kareem Peer Khan, Managing Partner, Network Ventures. While the Act was initially put forward in 2001, it was passed in 2013 and came into effect from March 23, 2015.

Key highlights of the scheme

  • The scheme calls for regularisation of the properties which have violated building byelaws by paying penalty instead of being faced with the wrath of demolition. The same is applicable for illegal plots.
  • All the ready-to-move-in properties constructed on or before October 19, 2013, will come under the purview of the Act. The rule will be not applicable on under-construction properties.
  • The scheme allows one-time regularisation of up to 50 percent setback and floor space index (FSI) violations for residential buildings. Meanwhile, for commercial establishments, the setback limit has been set at 25 percent.

In recent news, the state government extended the deadline for regularisation of houses constructed on government land in rural areas and peripheral urban areas by a month. The penalty to be paid by residents in rural areas has also been slashed by 50 per cent.

Penalty charges

As per the rules, the penalty will be charged as follows:

  • If the violation is less than 25 percent, the regularisation fee will be six percent of the total violated area with respected to the land’s market value.
  • If the violation falls between 25 and 50 percent, the penalty fee will be eight percent of the total violated area.
  • If the violation is more than 50 percent, the building will be liable for getting demolished

Hence, depending on the nature of the violation, the applicants will be required to submit the requisite documents to get the property regularised.

Impact on real estate

Khan adds that the scheme will have a direct impact on the city’s realty landscape and the property prices as many ready-to-move-in properties have not been bought as they are tagged illegal and belonging to B-Khata category. Post the regularisation, there will be a surge in availability of properties in the market as they will be moved to A-Khata category and bring a turnaround in consumer sentiments as buyers in the city prefer A-Khata category properties. Meanwhile, in terms of price points, there is an unlikely possibility of a price correction as many present B-Khata category property owners will command higher ‘ask’ rates.