Rates dictated by brokers and developers

Rates dictated by brokers  and developers

If anyone stands to benefit from the cheap Development Rights Certificates, it is only astute real estate developers and the band of TDR brokers. Here’s how they operate: Buy the TDR certificates at throwaway prices from desperate buyers in zones B or C in the outer areas of the city, and use these in projects in zone A (the city centre) where land is far more expensive. The certificates help the builders build beyond the stipulated floor space area. The zones have been defined by the Bangalore Development Authority (BDA).

Property owners are currently forced to sell the certificates at whatever rate the brokers and developers dictate. The owners will not benefit from TDR unless the government makes it attractive for buyers (developers), contends Suresh Hari from the Bangalore chapter of Confederation of Real Estate Developers Associations’ of India (CREDAI). “The byelaws related to FAR are antiquated. TDR should be user-friendly. Currently, you can load only 0.6 per cent of the FAR due to restrictions on height, setback and other factors. The government should come out with clear guidelines.”

But all this is not going to happen in a jiffy. As things stand now, their hard-earned property virtually plucked away for questionable public projects, the land-losers are often eager to monetize the seemingly worthless certificates. Sensing a commercial opportunity in forging a link between these potential sellers and the developers, several real estate agents have morphed as TDR brokers. Over the last few years, several such big time brokers have emerged in Bangalore. Charging commissions from both the sellers and buyers, they end up making some big bucks. According to one estimate, they could be earning upto Rs. 15 per sqft.

There have also been cases where TDR brokers buy land notified for road widening from land-owners, get power of attorney in their names, before getting the TDR certificates from BBMP. Reports of such transactions have surfaced from Yelahanka and Mahadevapura.  

But many land-owners don’t realize that TDR is only a voluntary provision and cannot be forced on them. As specified in the Town and Country Planning Act, TDR is a barter of building rights in exchange for “voluntary” surrender of land for a stated public purpose. This implies that TDR is not compulsory, and it is not an offence to refuse TDR.

Incidentally, if a property-owner refuses to take the TDR route, the governme­nt’s only option left is to initiate land acq­ui­sition proceedings as per the Land Acq­uisition Act or the KIADB Act specially invoked for a road-widening project. But under this, the property owner will have to be directly intimated and given opportunity to be heard and file objecti­ons. However, government has the right to ignore objections if public interest is supreme. Yet, civic agencies prefer not to take this route since the process could take years and trigger project delays. 

Traders on CMH Road in Indiranagar were lucky to get market-linked monetary compensation for properties lost to the Namma Metro stretch. Despite putting up a fierce opposition to the Metro alignment, they had to relent, but at least they had no major complaints on the package offered. TDR was not even discussed.

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