VERIFY THE DOCUMENTS BEFORE PURCHASE OF THE PROPER

VERIFY THE DOCUMENTS BEFORE PURCHASE OF THE PROPER

A clear and marketable title of property free from encumbrance would provide the owner a rightful ownership of such property and the possession of the property could be either physical or constructive.

The foremost requirement to be exercised by the intending purchaser of property is to thoroughly scrutinize the title deeds of the property. There is no particular yardstick prescribed to trace out the title and, therefore, it depends upon the diligence and application of mind of the person who scrutinizes the documents. Scrutiny of documents is a specialized work and only persons who are well versed in scrutiny of property documents can analyse and give a clear opinion. Generally speaking, origin of the property, subsequent transfers and the present status are the three most important aspects which are taken into consideration to trace the title of a property.

Modes of acquisition
There are different modes of acquisition of property by any individual. Some of the modes of acquisition of property are Grant Land by the Government, allotment made by the Government / Various Autonomous bodies / Housing Societies, etc., acquisition of property under a Will, by purchase or inheritance.

If the property is a Grant Land or allotted by any authority, then the Grant Certificate or Allotment Letter issued by the Competent Authority is necessary, apart from the other relevant documents. In the case of acquisition of property under a Will or by way of purchase, Gift, Exchange, Partition, Release, Settlement or inheritance, it is necessary to scrutinize and verify all the relevant documents of 42 years prior to the date of the present transaction to ascertain the transactions which have taken place during this period. This will enable the purchaser to make sure of the valid title of the vendor. At the same time, genuineness of the relevant documents at the time of transfer of property during this period has to be diligently examined.

The next important step is to examine the present status of the property i.e. who is the present owner, whether his / her name has been recorded in the revenue records of the concerned Authority and whether property taxes are being paid by the owner periodically.

Identification of the Property
The third step is identification of the property which is very important and a must. The purchaser should not only get the property identified but also should compare the description of the property shown in the document with the actual. Accurate details pertaining to the number assigned to that particular property, its extent, boundaries, name of the Village or Municipal Council or any Autonomous bodies within whose limits the said property falls are required to be ascertained. If the building exists on the particular property, then details pertaining to the existing building and whether the building is constructed in accordance with the building sanction plan and relevant Bye Laws of the concerned Authority has to be mentioned. Measurements mentioned in the document should tally with the physical measurements. In case the physical measurement mentioned in the document is less than the actually physical area available, the actual area available is to be considered for the purpose of payment and documentation. Normally, the purchaser shall pay either for the measurements mentioned in the documents or the actual physical measurement, whichever is less.

Nature of Title
Nature of title such as tenancy right, occupancy right, possessory right, full ownership is also another important aspect which requires search and examination since the persons having some interest or right over the property are necessarily to be made as parties to the transaction, sale or mortgage.

Tenanted property
If the property is tenanted, then it is very important to get confirmed from the tenant that there is no litigation pending between the vendor and the tenant pertaining to the ownership of the property or the tenancy rights. Further, it is also necessary to convey the tenant about the proposed sale transaction and to attorn the tenancy in favour of the purchaser.

Conversion
Normally, agricultural lands cannot be put to use for non-agricultural purposes. To put to use the agricultural land for non-agricultural purposes it is mandatory to get the agricultural land converted for utilization for non – agricultural purposes. However, there are certain exceptions to this mandatory requirement and the agricultural land can be put to use for non-agricultural purposes with the specific order of the competent authority. The special enactments applicable to grant lands also require to be looked into. Further, it is also necessary to find out from the Land Acquisition Department whether the property in question is under the orders of acquisition by the Government and whether any notification to this effect has been issued. by the Government.

Encumbrance certificate
Verification of encumbrance certificates is a part of scrutiny of property documents to rule out any subsisting encumbrance over the property. But, such certificates cannot be totally relied upon since there are instances wherein transactions duly registered in the concerned Sub – Registrar’s office are not reflected in the E.Cs issued by the department. In such cases it is necessary to do the search in the office of the Sub Registrar, on payment of the prescribed fees.

Minors interest
In cases of sale of ancestral property, it is necessary to find out whether the vendor has a clear title over the property and there are no claims of minors interest. If the property proposed to be conveyed is ancestral property, then the involvement of Minors interest is very common. In cases where minor’s interest are being transferred or conveyed, permission from the court for conveying the property is mandatory under the provision of Guardianship and Wards Act. If the property is conveyed in contravention of the provisions of this Act, then such conveyance can be challenged by the Minor within three years from the date of his attaining majority or from the date of getting knowledge of such a sale.

Thus, for purchase of property it is necessary to verify as to how the vendor has acquired the property. Only upon being satisfied about the valid title of the vendor, the purchaser can negotiate and enter into an agreement of sale with the vendor. It may be noted that if the property is a composite property, then most of the owners will retain the original title documents and only Xerox copies of such documents will be delivered to the purchaser.

Since scrutiny of property documents is technical in nature, utilization of services of an experienced advocate in property matters would help the purchaser immensely and while scrutinizing the documents the advocate shall be able to decide as to which documents are to be in original and which could be certified copy or Xerox copy.


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Advocate Bangalore
Selvakumar Bangalore
Bangalore
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SAFEGUARDING YOUR PROPERTY RIGHTS

SAFEGUARDING YOUR PROPERTY RIGHTS

Before entering into an agreement for purchase, verification of title is very important. It is not merely tracing the title on the record but also examination of the genuineness of the records, identification of the property, notification in a newspaper and physical possession of the title of the property. Clear and marketable title free from doubts and encumbrances with a right of physical possession of the vendor is a necessary ingredient for peaceful possession and enjoyment of the property by the purchaser.

The first and foremost step in purchase of property is the scrutiny of title deeds before entering into an agreement with the seller / vendor. The ownership can be traced from the title deeds and the revenue records. The following are the methods of scrutiny:

Origin of the Property:

The origin of the property is very important to trace the title of the property. It is otherwise called “Root of Title”. To trace the title of the property, examination of the origin of the property up to a maximum period of 43 years may be required in most of the cases. If a person is enjoying the property for more than 30 years, he will get title by adverse possession against the government as per the Limitation Act. As per Section 90 of the Indian Evidence Act 1872 any document executed 30 years before is presumed to be valid. Will, Partition, Family Settlement are not considered as concrete origin. Some of the old revenue records like Index of Land, Record of Rights, Phani, Survey documents are considered as better origin.

Subsequent Transfers:

After ascertaining the origin of the property, it should be followed by methodical examination of later events and further transactions in an uninterrupted and sequential manner, involving the previous owners and the present owner of the property. Here, the purchaser’s advocate has to very carefully look into all aspects from various legal angles as to how the property was transferred from the previous owners to the present owner. Such a transfer may be by possession, inheritance, settlement, will, sale, mortgage, release, gift etc., involving such intermediate parties. To get a clear picture of rightful ownership, title and interest, the advocate has to carefully examine the title deeds and other supporting documents like revenue and other records. It is also necessary to verify the identity of the names of parties and their family connections and examination of the proceeding involving the parties before any Court of Law, other legal forums and authorities including revenue authorities, if any. While scrutinizing the documents, Advocates have to apply their mind and logically link the relevancy of one document with the other.

Present Status:

“Present Status” is an important factor to establish ownership over a property. The advocate has to find out who is the present owner and what are the title deeds and supporting documents the vendor has in his possession, whether it is an ancestral property or self acquired property, who are his legal heirs etc. If the legal heirs of the vendor are major, the vendor must ensure their presence while executing the Deed of Conveyance. If they are minors, the vendor has to get the permission from the court before executing the Deed of Conveyance. In some cases the vendor may conceal the fact of existence of legal heirs. Therefore, the advocate must insist upon the vendor to produce either the succession certificate or the family genealogical tree issued by the revenue authority. Similarly, it is necessary to verify and confirm that no acquisition or requisition or any other court proceedings are pending before any authority. It is also necessary to find out whether there exists any bank loan, charges, encumbrances over the property.

Statutory Clearance:

For completing the sale transaction, various statutory clearances are to be obtained from the concerned authorities such as Income-tax, RBI, revenue authorities, etc. In case of purchase of agricultural land, there are various other clearances also to be obtained before executing the Deed of Conveyance.

The advocate must find out in whose name the Khatha stands, whether the khathedar possesses up-to-date tax paid receipt in his name and up-to-date Encumbrance Certificate to establish his right, title and interest over the property. The advocate has to check the Encumbrance Certificate covering the relevant period, generally for a minimum period of 13 years to 43 years on case to case basis. An examination of Encumbrance Certificate would go to show as to whether any kind of charge has been created on the property and whether such an encumbrance is still subsisting or not. Municipal and other revenue authorities also maintain records as to in whose possession the property exists, what is the amount of tax payable on the property and upto what period tax has been paid. All this can be learnt from these records.

Genuineness of documents:

After thoroughly scrutinizing the documents, the purchaser or his advocate has to cross check all documents with the concerned revenue or other departments to ensure that the documents are genuine and are originated from the concerned departments and that they are not fake. In the case of buildings, it must be ensured that the vendor has constructed the building as per sanction plan and according to the statutory guidelines.

Identity of the property:

The identity of the property must be checked on the spot. Measurements mentioned in the documents must tally with actual physical measurement of the land available on the property. It must also be ensured that there is no encroachment on the property. In case of encroachment, the measurement of the available land must be recorded and this must be mentioned in the Deed of Conveyance. The boundaries in the schedule surrounding the property must be checked physically. Also, the purchaser may make enquiries tactfully with the adjacent property owners about the ownership of the property he is proposing to buy.

Paper Notification:

Though paper notification is optional, it is always advisable to notify in a leading local newspaper about the buyer’s intention to purchase the property. This is done to safeguard the interest of the purchaser. Even after examining the various documents, the Advocate may not be able to find out whether the property is truly free from any claim or not. A paper notification will beget response from genuine claimants, if any. Therefore, paper notification will be of some help to the purchaser to make sure as to the genuineness of the ownership of the vendor.

Physical Possession :

In the case of a vacant site, the purchaser may, with the permission of the vendor fence the property with barbed wire or he may construct a compound wall and put a signboard, if necessary, to display his ownership over the property.

Even after entering into an “Agreement to Sell”, the purchaser continues to make enquiries about the title. A doubtful title cannot be forced upon the purchaser. Purchaser is not bound to complete the sale transaction, if there are defects in the property, material or latent, which are not discernible in the ordinary course. A mere suspicion of fraud will not make the title doubtful and the purchaser cannot reject the title.

It would be of great help if a prospective purchaser utilizes the services of an experienced advocate for a thorough scrutiny of the documents as to the vesting of the marketable title with the vendor and genuineness of the documents who on examination of documents will be in a position to explain his client about the risk involved in the transaction and guide him suitably so as to save the purchaser from litigations.

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Bangalore
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CHECKUP HISTORY TO SAFEGUARD YOUR FUTURE

CHECKUP HISTORY TO SAFEGUARD YOUR FUTURE

The Initial steps towards property purchase are the scrutiny of title deeds of the property and this is the first and foremost exercise the purchaser’s advocate has to undertake before entering into an agreement with the seller.

A clean and marketable title free from all doubts and encumbrances with physical possession is very important. The ownership can be traced from the title deeds and revenue records.

It is the duty and responsibility of the purchaser’s advocate to safeguard the interest of his client. The advocate shall thoroughly scrutinize the marketable title of the property and genuineness of the documents. The advocate shall also examine the risk involved in the transaction and guide his client on the mode of payment to be adopted.

Origin of the Property:
The origin of the property is very important to trace the title of the property. It is otherwise called “Root of Title”. It is the safest way to determine the origin of the property and trace its marketable title. Documents covering a minimum period of 43 years of Adverse Possession against individuals or Conflicting Claims (other than mortgage) against individuals and documents covering a minimum period of 30 years must be checked. If a person is enjoying the property for more than 30 years, he will get title by adverse interest against the government as per the Limitation Act. Also as per Section 90 of the Indian Evidence Act 1872, a document executed 30 years before is presumed to be valid.

Subsequent Transferors:

After ascertaining the origin of the property, it should be followed up by methodical examination of events and further transaction, if any, in an uninterrupted and sequential manner, involving the previous owners and the present owner of the property. Here, the purchaser’s advocate has to very carefully look into all aspects from various legal angles as to how the property was transferred from the previous owners to the present owner. Such a transfer may be by possession, inheritance, settlement, will, sale, mortgage, release, gift etc., involving such intermediate parties. For supporting such a transaction, the advocate has to carefully examine the title deeds and other supporting documents like revenue documents and other records. Also verification of identities of the names of parties and their family connection, wherever they are relevant, and proceeding if any, involving the parties before any Court of Law, other legal forums and authorities including revenue authorities, must be done.

Statutory Clearance:
The nature of various statutory clearances obtained from the relevant authorities like revenue, land reforms, income tax, etc., equipped for completing the transaction must be informed to the parties. In case of purchase of agricultural land, various clearances must be obtained before executing the Deed of Conveyance.

Present Status :
The “Present status” of the property is the most important point to be examined. The advocate has to find out who is the present owner, origin of the property, what title deeds and supporting documents he is in possession, is it his ancestral property or self acquired property and who are his legal heirs, if the legal heirs are majors in age, the vendor must ensure their presence while executing the Deed of Conveyance. If they are minors, the vendor has to get the permission from the court before executing the Deed of Conveyance. In some cases the vendor may conceal the fact of legal heirs. To find out the truth, the advocate must ask the vendor to produce either the succession certificate or the family genealogical tree issued by the revenue authority. If necessary he must see the family ration card for further clarification.

The advocate must find out in whose name the Khatha stands, whether the khathedar possesses up-to-date tax paid receipt in his name and up-to-date Encumbrance Certificate to establish his right, title and interest in the property. The advocate has to check the Encumbrance Certificate covering a relevant period, generally above 12 years upto 43 years from which it would be known what kind of charge has been created on the property and whether such an encumbrance is subsisting or not. Municipal and other revenue authorities too maintain records as to who is in possession of the property, what is the amount of tax payable on the property and upto what period tax has been paid. All this can be learnt from these records. “Present Status” is an important factor to establish property’s present ownership.

Genuineness of documents :
After thoroughly scrutinizing the documents, the purchaser or his advocate has to check up all documents for legality with the concerned departments just to ensure that the documents are genuine; that they originated from the departments and that they are not fake ones. In addition, the advocate has to find out from the department whether there is any attestation, notification or proceedings against the present owner. In the case of buildings, it must be ensured that it has not been served with demolition notice.

Identity of the property:

The identity of the property must be checked on the spot. Measurements mentioned in the documents must tally with actual physical measurement of the land available on the property. It must also be ensured that there is no encroachment on the property. In case of encroachment, the measurement of the available land must be recorded and this must be mentioned in the Deed of Conveyance. The boundaries in the schedule surrounding the property must be checked physically. Also, the purchaser may make enquiries tactfully with the adjacent property owners about the ownership of the property he is proposing to buy.

Paper Notification:
Though paper notification is optional, it is always advisable to notify in a leading local newspaper about the buyer’s intention to purchase the property. This is done to safeguard the interest of the purchaser. Even after examining the various documents, the Advocate may not be able to find out whether the property is truly free from any claim or not. A paper notification will beget response from a genuine claimant. Therefore, paper notification is the best way to avoid legal problems for the purchaser at a later date.

Physical Possession :
In the case of a vacant site, the purchaser may, with the permission of the vendor fence the property with barbed wire or he may construct a compound wall and put a signboard, if necessary, to intimate the ownership of the property.

Verification of title is very important. It is not merely tracing the title on the record but also examination of the genuineness of the records, identification of the property, notification in a newspaper and physical possession of the title of the property.

Even after entering into an “Agreement to Sell”, the purchaser continues to make enquiries about the title. A doubtful title cannot be forced upon the purchaser. Purchaser is not bound to complete the sale if there are defects in the property, material or latent, which are not discernible in the ordinary course. A mere suspicion of fraud that cannot be made out will not make the title doubtful and the purchaser cannot reject the title.

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Advocate Bangalore
Selvakumar Bangalore
Bangalore
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DIFFERENT ASPECTS OF SCRUTINY OF TITLE DEEDS

DIFFERENT ASPECTS OF SCRUTINY OF TITLE DEEDS

Scrutinizing the title deeds of the concerned property is the foremost and mandatory exercise required to be done by the intending purchaser’s advocate before negotiating and entering into any kind of agreement with the vendor. Apart from having possession, whether physical or constructive, clean and marketable title, free from all kinds of encumbrances is very important. The advocate shall also ascertain the genuiness of such title deeds produced for scrutiny. However, there is no yardstick to trace out the title, rather depends upon the diligence and application of mind of the advocate in logical way.

Generally, origin of the property, subsequent transfers, present status of the property are the three most important steps required to trace the title.

Origin of the property

The Vendor may have acquired the property by various modes such as Government Grant land, allotment made by the Government/various Autonomous bodies/ Housing Societies, etc or even by virtue of Will, sale or inheritance, etc. If the property is a Granted land or allotted by any authority, then the Grant Certificate or Allotment letter issued by the Competent Authority is necessary, apart from the other related documents, which is considered as the origin of the property.

In case of succession or transfer from one hand to the other by way of Will, Sale, Gift, Exchange, Partition, Release, Settlement Deed or inheritance, we require documents of at least 42 years to be scrutinized and verified in the chronological order and methodical examination of all the events or transfers concerned to the property.

Subsequent Transfers

The second important aspect is to examine the mode of transfers made by the previous owners of the property. At the same time, genuineness of the relevant documents at the time of such transfer, in any mode, has to be diligently examined. Present status of the property

The next important point is to examine the present status of the property as to who is the present owner, whether his/her name has been recorded in the revenue records of the concerned Authority and whether property taxes are being paid by the owner periodically.

After completion of the above three important stages, scrutiny of various other aspects are to be verified.

Identification of the Property

Identification and description of the property is also another important aspect and the accurate details pertaining to the number assigned to that particular property, its extent, boundaries and name of the Village or Municipal Council or any Autonomous bodies within whose limits the said property comes and the concerned registration Sub District are to be ascertained. If the building exists on that particular property, then the details pertaining to the existing building and whether the building is constructed in accordance with the building sanction plan and relevant Bye Laws of the concerned Authority has to be mentioned. Measurements mentioned in the document should tally with the physical measurements. In case the physical measurement mentioned in the document is less than the actually physical area available has to be considered for the purpose of payment and other documentation. Generally purchaser also has the liability to pay either for the measurements mentioned in the documents or the actual physical measurement, whichever is lesser.

Nature of Title:

Nature of the title such as tenancy right, occupancy right, possessory right, full ownership or any other type is also another important aspect which requires search and examination since all the persons having any kind of interest or right over the property are required to be included at the time of execution of Sale Deed or even the Mortgage Deed.

Tenanted property

If the property is tenanted, then it is very important to confirm from the tenant that there is no litigation pending between the vendor and the tenant pertaining to the ownership or the tenancy rights. Further, it is also necessary to inform the tenant about the proposed Sale.

Minor interest

If the property proposed to be conveyed is an ancestral property, then the involvement of Minors interest is very common. In such case, obtaining Court permission before conveying the property is mandatory and required under the provision of Guardianship and Wards Act. If the property is conveyed in violation of the said provisions, then the same can be challenged by the Minor within three years either from the date of attaining majority or from the date of knowledge of such sale.

Conversion

If the property is basically an agricultural land, then it is mandatory to convert it for non-agricultural purpose if the intention is to construct residential houses on the said property. If it is not converted, then the ground on which conversion can be exempted has to be verified. Any special enactments which are applicable to the property and affecting the title wherever it is applicable, to be looked into. Further, if the property is subject to any government acquisition notification, then the details pertaining to such notification, both preliminary and final, has to be verified thoroughly in various Land Acquisition Department.

Encumbrance certificate:

E.Cs are necessary to rule out any subsisting encumbrance over the property. But, that cannot be the only document to rule out any encumbrance since there are instances wherein transactions duly registered in the

Concerned Sub-Registrar Offices, are not reflected in the E.Cs. In such case, Advocate has to do the search in the office of the Sub Registrar, on the payment of the prescribed fees. Further, the Advocate has to clearly mention as to which document has to be collected in original, certified copy, Xerox copy. If it is composite property, then most of the owners will retain the originals and only Xerox copies of the title documents will be delivered to the purchaser.

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VIOLATION OF BUILDING BYELAWS

VIOLATION OF BUILDING BYELAWS

Bangalore is one of the fastest growing cities of India. The reasons for such a fast growth could be attributable mainly to the development of I.T. hub, pleasant climatic conditions and better educational and employment opportunities. Because of high influx of people to the city, there is a great demand for house and house sites in Bangalore. This, in turn, has lead to the steep rise in the property values here.

Building byelaws are introduced to regulate construction activities, to prevent construction of buildings in a haphazard manner and to provide better civic amenities. Zoning regulations are also introduced with the same motive and to regulate the land use, control of density of population and to develop the city in an orderly way. However, these building bye-laws and zonal regulations are not strictly followed by the people presumably on the ground that the restrictions imposed are nothing but hindrance in exploitation of the property to the full extent and thereby they construct their buildings at their will. In so doing, they do not mind to forego certain prescribed civic amenities such as having broader roads, playgrounds, parks and other civic amenities.

Broadly, we may classify the violations into three categories viz., violation of Floor Area ratio, violation of site set back and violation of plot coverage. Violation of any one of these three violations would deprive the land owner of completion certificate.


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Selvakumar Bangalore
Bangalore



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Floor Area Ratio:
Floor Area Ratio (F.A.R) is prescribed separately for intensely developed area, moderately developed area and sparsely developed area. Earlier, F.A.R. used to be high in more intensely developed central areas in view of land values and lower F.A.R. in the suburbs where land values are less. But presently it is on the reverse pattern and the policy is to fix less F.A.R. in the central area to enable decongestion and higher F.A.R in the suburbs to encourage development where the traffic and other problems are less. Keeping in view the housing needs of people of Bangalore, the present cabinet has decided to revise the FAR upto 4 to enable the land owners to put up more floors on their land vertically than was allowed hitherto. This positive move of the Government would enable construction of more housing units which could accommodate a large number of people.

Non-adherence of sanction plan restrictions and set back:

The building bye-laws prescribe for certain set backs on sides of the building to facilitate the people to have proper light, ventilation, privacy and to save them from dust and traffic noise. While framing the building bye-laws, the civic authorities also keep in mind the future land requirements for broadening roads. It is noticed that people violate building bye-laws by way of additional floor construction, site set back construction, providing stair case on the site set back area, balcony area to be converted into living rooms.


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Land use:

The Zonal Regulations of the Comprehensive Development Plan of Bangalore prescribe different land uses like; residential, commercial, land for civic amenities etc., for systematic development of the locality. But, it is noticed that the residential buildings situated along the main roads and the roads nearer to commercial area are developed and utilized as commercial property. Even several industries also do crop up in these localities in gross violation of zonal regulations. Similarly, residential or commercial buildings do crop up in civic amenities sites meant for parks, play grounds, schools, green belt areas etc.

Sanction Plan for additional constructions:

If a part of the building is constructed with deviations, the owners of such property hesitate to approach the plan sanctioning authorities whenever they intend to put up further construction on the property for approval of sanction plans for the reason that deviations will be noticed during inspection by these authorities and thereby proceed to make further construction without the sanction plan. Such people try to develop rapport with the concerned municipal authorities and put up additional constructions without sanction plan.

The reason for violation of building bye-laws and sanction plans by the people is that most of the land owners/builders want to exploit their land to an optimum extent because the residential and commercial properties do fetch high return. Presently, in Bangalore there is a steep rise in land value, say Rs.5,000/- per sq.ft. on an average.

In a large number of cases, deviations and violations take place with the active support of the officials and the local politicians. Only in rare cases when it is brought to the notice of the competent authority of deviations, action would be initiated by the concerned authorities against which action the land owners knock the doors of the courts and in many such cases courts do grant stay. Thereupon, the building owners do enjoy the property for long period despite violation of the bye-laws since it would take long time for the court to dispose of the matter.

Remedies

Violation of bye-laws, deviations of sanction plan, zonal regulations etc., cannot be allowed to be continued for long since it is an unhealthy trend. Therefore, the following suggestions may help in curbing violations of the bye-laws etc.

User friendly bye laws:

The building byelaws and zonal regulations of the Comprehensive Development Plan should be user friendly and acceptable to the majority of the public. Further, the byelaws should not consist of too many technical jargons but should be simple to enable the common man to understand and follow. Byelaws should be suitable to the local conditions failing which there would be violation of such laws.

Strict enforcement:

When once user friendly building byelaws with simplified procedure for sanction of building plans are introduced, there should be deterrent punishment if the property owners deliberately deviate from the sanctioned plan or construct their buildings without the sanction of the competent authority. It may be kept in mind that unless strict enforcement of the zonal regulations and building bye-laws is carried out in letter and spirit, there is every likelihood of people violating even the user friendly byelaws.


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THE RISKS IN INVESTING IN UNAUTHORIZED LAYOUTS

THE RISKS IN INVESTING IN UNAUTHORIZED LAYOUTS

In recent times, Bangalore has witnessed phenomenal growth in population due to various reasons such as pleasant weather conditions, better career opportunities and the like.

As a result of this, there has been a rapid increase in the demand for house and house-sites here. In order to cater to this increasing demand, a large number of Developers and Property Dealers have come into picture and have been forming private layouts without following the mandatory procedure and requirement of law making the innocent purchasers to suffer.

To avert this mishap, it is necessary that the intending purchasers of immovable property in Bangalore to have some knowledge about the nature of the property proposed to be purchased by them to save themselves from the risk of investing in the immovable property with no valid and marketable title.

Authorities

There are only two authorities, which have been authorized to approve layouts in and around Bangalore viz., Bangalore Development Authority [B.D.A.] and Bangalore Metropolitan Rural Development Authority [B.M.R.D.A].


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Bangalore

While the BDA approves the layout plans for formation of layouts in the lands falling within the metropolitan areas, BMRDA approves layout plans for formation of layout in the lands situated in the outskirts of Bangalore.

Getting approval for the land conversion and layout formation from BMRDA is less time consuming, less expensive and easier when compared to procedure laid down by the BDA.

Development Plan

For planned development of a city, proper road network, parks, open space, civic amenities, and a proper approved layout is necessary. BDA is the authority in charge of planning and development to Bangalore Metropolitan Area. Comprehensive Development Plan [CDP] is prepared by BDA under the Karnataka Town and Country Planning Act, 1961.

The last CDP was prepared and approved by Government in the year 1995, which is still in force.

Zonal Regulations

In order to promote public health, safety and the general well-being of the community, it is necessary to apply reasonable limitations on the use of land and buildings.

This is to ensure that the development of the city takes place in accordance with the land use plan as proposed in the CDP in a most appropriate and healthy manner.

Generally, CDP is valid for a period of 20 years from the date of preparation of the plan. The following are the classification of land uses for various zones:

1. Residential
2. Commercial (retail and whole sale business)
3. Industrial (light and service industries, medium industries and heavy industries)
4. Public and Semi-public Utilities and Services.
5. Parks and Open space and playgrounds (including public recreational area)
6. Transportation and Communication.
7. Green-belt area
Unauthorised Layouts

Sites formed in unauthorized layouts are called Revenue Sites. The lay-outs which are formed without following the mandatory procedure and the requirements of law are called unauthorized layouts and can be classified into two:.

Converted land

In this type of layouts, sites are formed in the lands which are converted from agricultural to non-agricultural residential purpose after obtaining conversion order from the Deputy Commissioner and in conformity with the zonal regulations but without obtaining approved layout plan from the competent authority. Village Panchayats are not competent to approve the lay-out plans.

Agricultural land

In these layouts, sites are formed on the agricultural lands not converted and without obtaining approved layout plan from the competent authority. Purchase of this type of site is very risky as marketable title would not be available to the purchaser.

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Property legal opinion
Buying a property in Bangalore

Sites formed in either of the classification referred to above are called as revenue sites. In such sites, electricity, water, sanitation and civil amenities will not be available to the site owners though providing of these facilities are the mandatory requirements as envisaged under the Karnataka Town Planning Act, 1961.

In formation of sites in these unauthorized layouts, Developers play a key role. In order to achieve maximum saleable area, the width of the road and the space allotted for providing civic amenities would not be as per law.

The only intention of the developers in such unauthorized layouts would be to enrich themselves without providing even the basic amenities to the buyers.

Purchasing sites formed in the converted land unauthorized layout is comparatively a better option to the one formed in the non-converted agricultural land. However, purchasing sites in unauthorized layouts will not convey valid and marketable title to the transferees.

In fact, Bankers even refuse to provide loans for such sites either for the purchase or for putting up construction thereon. Thus, sites in unauthorized layouts are not recommended for purchase.

Approved Layouts

It is advised that the people who are desirous of purchasing house site may prefer to purchase sites in approved layouts for the reason that water supply, underground drainage, street lights, electricity supply, civic amenities are available in these layouts.

Valid and marketable title are conveyed to the purchasers. Value of sites appreciate considerably. Housing loan facilities can be availed for purchase of site and for construction and above all it is easy to dispose of these sites whenever needed. The following types of sites are suggested for purchase:

1. Sites allotted by BDA without lease.
2. Sites allotted by KHB without lease.
3. Sites allotted by Co-operative societies after obtaining approval for formation of layout from BDA or BMRDA along with order of release of sites.
4. Sites formed in the private layout, approved by BDA or BMRDA along with order of release of sites.



Property advocates
Advocate Selvakumar
Advocate Bangalore
Selvakumar Bangalore
Bangalore

PERILS OF BUYING THE REVENUE SITES

PERILS OF BUYING THE REVENUE SITES

Agricultural land cannot be directly put to use for residential purpose. It needs to be converted by paying conversion charges. The Special Deputy Commissioner is the competent authority to grant permission for conversion of agricultural land for non-agricultural purpose.

Revenue site is one that is situated in the layout formed on the agricultural land for a non-agricultural purpose without proper approval under the relevant law i.e., Karnataka Land Reforms Act, Karnataka Land Revenue Rules and other provisions of law.

No building can be constructed on agricultural land without obtaining conversion orders, layout and building plan approvals from the concerned authorities. Residential layouts can be formed only in the residentially converted land, such a land should be in the residential zone as per the zonal regulations for getting the conversion for residential purpose. The Village Panchayath is not the competent authority to approve the layout plans.


Property advocates
Advocate Selvakumar
Advocate Bangalore
Selvakumar Bangalore
Bangalore
Legal opinion

Zonal Regulations:

As per zonal regulations of the comprehensive development plan, green belt area is meant only for agricultural activities. Non converted land continues to be agricultural land and there are various restrictions on sale and purchase of agricultural land. In Bangalore Urban Agglomeration, Bangalore Development Authority (BDA) is the competent authority to approve layouts and to get this approval road width, residential area, civic and other amenities are to be provided as per law. The Bangalore Metropolitan Regional Development Authority (BMRDA) is the regulating authority to approve layouts on the outskirts of the Bangalore.

All around Bangalore, it is a very common practice for people to buy a piece of agricultural land, which is more popularly known as “revenue site”, without being aware of the hassles involved in buying such sites. Sites such as those formed in the agricultural land without getting the layout approved by the competent authority are generally referred to as "Revenue Sites". Small time promoters misguide the buyers and motivate them to buy the revenue sites even by concealing the vital defects and flaws in the title of the owner. In addition, there are several instances wherein the land would have been notified for acquisition by certain statutory authority or even the land on which sites are formed may be grant land for schedule caste or schedule tribe people wherein obtaining prior approval of the competent authority for change of land use and for sale is necessary. Ultimately, it is the innocent purchaser who faces the legal battle after purchase of revenue sites.

Middlemen rule

Generally, a nominal sum is paid by the Small Time Promoter as a token advance to the landlord and a general power of attorney is obtained; and thereafter, search for the innocent purchasers begins. The middle men, like double edged razors, hike the price of the land and at the same time, do not properly settle the accounts with the illiterate and ignorant land owners.

These Small Time Promoters form layouts on agricultural lands without approval of the layout from the competent authority. To increase the saleable area of the “sites”, they provide narrow roads. These layouts generally do not have civic amenities and other facilities, since the promoters generally do not have any intention of providing them.

Marketing Strategy:

The Small Time Promoters know the art of marketing. They make colorful brochures with photographs of certain parts of Bangalore and paint an attractive picture to attract the people to buy sites in these layouts. Some of them even download foreign photographs of houses from internet for their brochures. Better the presentation, deeper the deceit, which very few people understand. After the Small Time Promoter has got his money, the purchaser will have the bitter experience.

These promoters/agents in league with brokers will register some imaginary sites at the sub-registrar’s office using their clout. There are many instances where the lands bearing Khaneshumari number without any link to the old survey number are being registered in the Sub-Registrar's office by the Owners in connivance with the Brokers either by creating or manipulating the existing documents since it is not the duty of the Sub-Registrar to verify the legality of the documents.

Ancestral Property

In the recital of a sale deed, it is customary to mention how the seller has acquired his title, interests and rights to the immovable property from origin to the end. In the case of revenue sites, the brokers at the office of various sub-registrars have devised a very ingenious method to hide out this fact. They merely mention in the recital that the property is the “ancestral property” of the seller. In this way, the brokers pass on the defective title of the property to the innocent purchasers.

There are several instances where the land notified for acquisition and the land granted for schedule caste people have been made into sites, where the purchaser of such a site would not get title of the property.

GPA transaction

Generally, brokers will take GPA from the landowner for the entire land. Most of the revenue sites are registered on the strength of GPA. Only a very few people take care to check up the legality of the GPA executed by the original vendor. Nobody bothers to find out whether the GPA is registered or not, and whether the executor of the GPA is alive or not.

If the executor of the GPA is not alive the GPA transaction is totally invalid. A Joint GPA executed by two or more owners would become invalid if any one of them dies.

Form 9 and 10

Originally, property falling under the village Panchayath area alone has the genuine site status. Form No.10 is for a house situated within Gramathana area and Form No.9 is for a vacant site situated within Gramathana area. Middlemen and some revenue officials make bogus Forms No.9 and 10 and register immoveable properties in favour of innocent purchasers.

When the Urban Land Ceiling Act was in force, thousands of revenue sites were registered by merely mentioning in the sale deed the description as one square asbestos sheet house. This was mentioned just to avoid getting the relevant clearance under the said Act. After the Urban Land Ceiling Act was abolished the term one square asbestos sheet house was also removed from the real estate agents’ dictionary.

It is not legal to form layouts and sell sites in the agricultural land/green belt area, even after selling all the sites; RTC (Record of Rights, Tenancy and Crop Inspection) will be in name of the original landowner.

The Agent being a GPA holder will sell the sites, as “ancestral properties” to the innocent purchaser. The numbers assigned to these sites will never match with the survey numbers assigned to these lands by the government. The purchaser of the revenue site doesn’t get the title of the property. What is purchased is an imaginary site only. If, however, the original owner is good then the purchaser can enjoy the property, till the government regularizes such revenue sites.

Loan clearance

If the title deeds are not clear and does not establish marketable title, it is difficult to obtain bank loans for construction by mortgaging these sites. Generally, these sites are situated on the city outskirts. There will be no proper roads, electricity or water supply. There is no scope for immediate development of the locality. With all this, if the prices of the sites appreciate over a period of years, the original landowner will appear from nowhere and start cultivating the area.

Bank legal Opinion,
Selvakumar advocate,
Selvakumar,
advocate,
Property legal opinion,

He will remove all the boundary stones laid by the broker/small time promoter making it difficult for the purchaser to identify his property. In certain cases the GPA holder sells the same site to several persons and collects money from all of them. Consequently, marathon litigation awaits the purchaser. The laws are so complex that they give rise to multiple interpretations.

In recent times, litigations pertaining to property transactions are increasing. Common problems involved are that the property might have been sold by one of the Co-owners without arraying the other Co-owners as parties to the sale. After the death of the person who sold the property, his Legal heirs/representatives and the surviving co-owners with an intention to take advantage of the rising prices for their property may approach courts with suits.

The buyers may, therefore, consult a legal expert in property matters before investing their hard earned money.