Review lease agreements, rentals but time not ripe now

The Bruhat Bengaluru Mahanagara Palike (BBMP) owns several properties that are situated in prime locations across the city. Most of these properties are leased out for long periods from 33 to 99 years. But the Palike earns only a paltry sum, even as it struggles with poor revenues for the city’s upkeep.

A long-time resident of Koramangala, 71-year-old Muralidhar Rao feels the Palike’s rentals should be in sync with the current market value. “There is a system of valuation of property and stamp duty, it is a regular process that is going on from three or four years. The rental should be according to the stamp duty. The problem is it may not work for shopkeepers,” he says.

As the BBMP already has lease agreements, it will be only possible after the tenure gets over to implement a decision to reduce the loss. “The long tenure of 33 to 99 years lease will not bring profit for BBMP. The municipality needs revenue,” agrees Rao.

In industrial areas and shops, the Palike collects 99% of the value at the time of allotment. “In the case of shops too, they should adopt something like this system. The current one that we are following is meaningless because it will not bring worthwhile revenue.”

Also Read: BBMP-owned properties: Leased out for a pittance

Whatever the method, he says the process should be transparent. “A new system can be implemented during the lease renewal time. People who are renting shops will make noise, so BBMP has to find a way to start a new rental system,” he elaborates.

Alex M, a shop owner from Jakkasandra feels a rental increase by the BBMP will be a bad idea now. “It is better to keep the rents low when we are expecting a huge financial crisis soon. Already, most shopkeepers find it difficult to pay their rent.”

If BBMP is planning to take a decision to compensate for the loss from the lease, it should not affect the shopkeepers. “It should be done in a tactful way so that ordinary citizens are not affected. Alternatively, they can renew the lease according to the income of the shops,” suggests Alex.

Indeed, the Palike has several properties leased out for paltry amounts. But many feel this is not the time to review the agreements or raise rentals. Yashaswini Sharma, an architect based in Malleswaram, notes, “The BBMP might need to revise rentals to improve its finances. Under normal circumstances, this happens periodically.”

However, Sharma points out, “We are presently living in extraordinary circumstances due to the Covid-19 pandemic. At a time when small and private businesses, vendors, daily wage workers etc. are suffering loss of revenue or jobs due to the lockdown, it seems unfair if small businesses and vendors are asked to pay the increased rent.”

She says, “What we need is an economic stimulus, not an additional burden. I hope that government agencies act with patience and hold off for some time.”

An MBA student from T John College, Amal Mathew, says on humanitarian grounds, this is not the apt time to think about profit-oriented goals. “The sudden increases in rent will definitely affect all in the industrial and commercial sectors,” he says.

The whole of India is going through a series of complex financial crises. “It will take a long time for the common people and the poor to get back to their stable condition. Therefore, considering the current situation, it is best to stay with business as usual without increasing rents.”