The Occupation Certificate riddle

The Occupation Certificate riddle

The issue of B Khata, Occupancy Certificates (OC) and non implementation of ‘Akrama Sakrama’ has become a nightmare for the common man in Bengaluru, which is the hot bed of  real estate activity. The rule book of the BBMP stipulates that OC is mandatory for any construction above ground floor plus five units - both residential and commercial.

All builders will have to obtain OC for their projects coming under the BBMP limits, at the time of handing over of the possession of the completed apartments which is a document certifying that the apartments in the project are constructed as per approved one without any violations, with proper set back and having all the necessary statutory clearances such as fire safety, pollution control, rain harvesting, etc. Obtaining of OC is a mandatory requirement under the Karnataka Apartment Ownership Act, 1972.

Nobody has taken the non-issuance of OC seriously as it has worked well for all – including BDA and BBMP - who issue OCs recklessly after taking “gratification”, unscrupulous builders who brazenly violate the building rules with additional floors, with serious setback violations and still get the OCs by greasing the palms of officials or handover possession of the completed flats, to the purchasers without the OCs.

Nearly 70 per cent of the residential and commercial buildings have no OCs in and around the city. The seriousness is not felt as OCs are not considered as a mandatory legal document like the sale deed, khata, encumbrance certificate etc,. Most of the banks and housing finance companies are also not insisting on OCs while sanctioning housing loans to individual apartment purchasers.

Numerous apartment projects promoted by all sorts of builders have mushroomed outside the city limits as they thrive on the B Khata properties, where the issuance of OC is not in practice.

Here the building plans are approved by local panchayats, BBMP, TMCs, and gramathana – followed by the BBMP which would have issued the B Khata. Conversions to A Khata will happen after the Akrama Sakrama notification comes into force (which is long over due), when violations are quantified and regularisation fees paid.

Shockingly, the issue of B Khata has not been resolved by the government and is always in a flux. The Karnataka High Court, on January 13, 2015, categorically ordered that B Khata has no legal sanctity unless BBMP Act under - chapter construction, sub clause 2003 , section 109 A – is amended followed by allotting Property Identification Number (PIN ) to all such 2,00,000 properties for which B Khata have been issued.

All these have made the purchasers/owners of B Khata go dizzy.Who is responsible for building plan violations (with or without OCs) as B Khatas have been issued by BBMP, itself? It may be recalled, former BBMP Commissioner Siddaiah had gone on record by stating that “B” in B Khata stands for bogus  forgetting that it's the same BBMP which has issued the B Khata! It’s like the pot calling the kettle black.

If the government has the honesty and political will to break the nexus between the builders, politicians and the revenue department, OCs should be made mandatory and part of the property registration documentation like the sale deed and appropriate measures taken for immediate conversion of B Khatas to A Khatas.

Penalise deviations

For orderly growth of urban areas, issuance of OC should be mandatory - pan Karnataka – for both residential and commercial –  with clear guidelines and not be restricted for projects above five units only. Surveillance policy should be put in place to track and penalise projects wherein gross deviations have taken place after obtaining the OCs from the BBMP.

The RBI and the National Housing Bank should make OCs mandatory by the banks and the housing finance companies while lending to borrowers in apartment purchase cases as part of loan documentation and bring the compliance under the Real Estate (Regulation and Development) Bill 2013.

The new circular issued by the state Urban Development Department has instructed the BBMP that OCs are a must for buildings exceeding 8,000 sft and 50 ft in height and not to issue  OCs for structures that have violated the building bye laws and that such buildings  will not be entitled for power and water connections.

The government should issue clear guidelines on the conversion process of B Khata to A Khata, issuance of OCs, revisit the stipulations of the bylaws of construction by making it more lenient as builders feel that it is suffocating and cannot be implemented fully as saleable area will be very less and sale price per sft to the buyer, will be very steep if they comply in toto. 

If the Government does not resolve the B Khata and the  OC issue immediately, it will have terrible fall out effects putting into great difficulty the buyers of the properties who would have invested their life savings and raised huge loans without knowing the draconian implications of the absence of the vital documents.

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