BDA to enforce 10% non-construction penalty; Sale deeds to be withheld until homes are built

BDA steps up action against allottees who left sites vacant for decades, introducing a steep 10% guidance value penalty and tightening scrutiny on illegal transfers.

The Bangalore Development Authority (BDA) is set to crack down on long-pending violations by enforcing a one-time 10% non-construction penalty on allottees who fail to build houses within three years of receiving their sites. Officials confirmed that sale deeds will not be issued unless construction is completed, marking the strictest enforcement the authority has implemented in years.

The new penalty system follows the High Court’s earlier directions asking BDA to move toward a penalty-based regularisation model instead of resuming sites. While this rule applies to all layouts, Arkavathy and Nadaprabhu Kempegowda Layout (NPKL) are exempt due to prolonged litigation, delays and incomplete infrastructure, which prevented allottees there from starting construction.

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BDA officials noted that the scheme was originally designed to benefit people without homes, offering sites at highly subsidised, non-market rates. Many allottees built houses, but a significant number left their sites vacant, even after paying as little as ₹5,000 in the 1960s and 1970s. Today, some of these plots are valued at ₹10 crore, yet remain unused.

For years, BDA levied a fixed penalty for violations, ₹1.5 lakh for 20x30 sites, ₹2 lakh for 30x40 plots, and ₹4 lakh for 60x40 sites. However, in 2023, the board revised the policy to link penalties to the prevailing guidance value, fixing the amount at 10% of the property value, regardless of size. With guidance values rising sharply, penalties now range from lakhs to even crores, triggering resistance from violators.

Officials cited an example: an allottee in Jayanagar who once paid around ₹10,000 could earlier regularise the violation for a similar amount. The same site today is worth nearly ₹10 crore, making the penalty around ₹1 crore under the new rule.

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Alongside non-construction violations, BDA also flagged illegal transfers made during the restricted period, which will now attract a 25% penalty on the loss transaction value for transferring plots without approval. About 50 cases have already been detected where allottees sought sale deeds only to obtain e-khata but failed to return for regularisation.

BDA Chairman Haris NA said the rule is clear: “Except for Arkavathy and NPKL, allottees must construct houses or face penalties. Sale deeds will not be issued until construction is completed. Enforcement will be strict.”

With tighter monitoring and penalties tied to soaring guidance values, BDA’s latest move marks a major push to curb violations and ensure intended use of allotted sites.

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