Developers can sell sites only after developing the layout fully

A recent amendment to the town planning act stops developers from selling properties to buyers before the layouts are developed fully and approved by the authorities. With this, the practice of letting developers sell 60% to buyers before developing the layout will be done away with.

Many of you may be interested in building your home on a plot owned by you. There are hundreds of private layout developers in all parts of Bengaluru, advertising all over newspapers and television. Private layouts are being developed along all the main roads from Bengaluru towards Devanahalli airport, Hoskote, Whitefield, Sarjapur, Attibele, Anekal, Jigani, Kanakapura, Mysore, Magadi, Tumkur and Nelamangala.

Some of these projects are at a distance of nearly 50 kms from Vidhana Soudha. All layout developments have to fulfil legal requirements of the Land Revenue Act, the Land Reforms Act, the Town and Country Planning Act and BMRDA Act. As per the existing procedures these Private layout projects are approved / sanctioned by 8-9 Local Planning Authorities working under BMRDA as per the procedural guidelines framed by BMRDA and The Karnataka Town and Country Planning department.

The authorities to approve layouts are:

1. The Bangalore Metropolitan Region Development Authority (BMRDA) – for Bangalore Urban and Rural Districts and Malur Taluk of Kolar District excluding the areas covered by BDA, BIAAPA and other LPA’s.

2. The Bangalore International Airport Area Planning Authority (BIAAPA) – for its local planning area which includes the area surrounding Kempegouda international airport and its local planning area mainly in Devanahalli Taluk.

3. The Ramanagaram – Channapatna Urban Development Authority (RCUDA) – for Ramanagaram-Channapatna local planning area.

4. Nelamangala Local Planning Authority – for Nelamangala Town and its local planning area.

5. Magadi Local Planning Authority – for Magadi Town and its local planning area.

6. Kanakapura Local Planning Authority – for Kanakapura local planning area.

7. Anekal Local Planning Authority – for Anekal local planning area.

8. Bangalore Mysore Infrastructure Corridor Area Planning Authority (BMICAPA)-for facilitating planned development of the corridor between Bangalore and Mysore known as Local Planning Area comprising of a total area of about 701 sqkm including 140 revenue villages, 54 part villages and Maddur town.

A layout being developed near Nelamangala. Pic source:

Development of private layouts is going on in full swing around Bengaluru city since the inception of BMRDA as per BMRADA Act, 1985. The BMRDA and its local planning authorities have so far sanctioned more than 1500 layouts.

There are many instances of private layout developers taking huge sum from buyers of plots promising them various facilities and infrastructure but vanishing after the plot was sold, without offering what was promised. Many buyers fall prey after seeing attractive advertisements and struggle later, being unable to get either money back or minimum infrastructure.

Upa Lokayukta Justice Subhash B Adi had taken up a suo motu complaint against BMRDA based on an anonymous letter about a layout in Attibele in Anekal Planning Area which remains barren land since 2005. The Upa Lokayukta directed the Urban Development Department/BMRDA to provide details about approved layouts and the present status since inception of BMRDA.

As per the details provided by the BMRDA to Upa Lokayukta, a total of 1,364 layouts have been approved in BMRDA and its seven LPAs. Out of these,

  • in 15 projects did not start work even five years after approval.
  • in 317 layouts, development has not been completed even after five years of approval.
  • in 715 layouts, development work is in progress
  • in 317 layouts, development work is completed. 

There are also around 430 illegal layouts in BMRDA jurisdiction for which no sanction from the local planning authorities was obtained.

BMRDA cannot approve all layouts

Increasingly, Layout developers are advertising layouts carrying an ‘Approved by BMRDA’ tagline to make the sites appear clear and more alluring. Often, Bangalore Metropolitan Regional Development Authority- (BMRDA) has little to do with the layout approval. Buyers should be aware that any layout approval should come from the Local Planning Authorities – LPA and not from BMRDA directly except the projects in Malur Taluk, Kolar district. BMRDA only frames rules to help these Local Planning Authorities with master plans. Buyers should check for related documents to ensure they are buying properties approved by the jurisdictional Local planning authorities.

Till May 2005, private developers of layouts were selling all the sites in the layout after getting approval from Local Planning Authorities. Most of these projects approved prior to 2005 are incomplete in many aspects. Most of the sites of these projects are sold fully and purchasers of sites in these projects are suffering without water, electricity, roads, drainage and other infrastructure.

In May 2005, BMRDA issued a circular which stipulates that after approval, the developer can sell only 60 per cent of the sites. As per this circular, all LPA started the procedure of releasing the specific sites to the extent of 60 per cent of total sites. As per the circular, a builder who has got approval for a BMRDA layout cannot sell more than 60 per cent of the total sites and should develop the entire layout within five years. The rule also states that if the builder fails to develop the layout, BMRDA can sell the remaining 40 per cent sites through auction and develop the entire layout.

The legal lacuna here is how the BMRDA can reclaim rights over the land after transferring it to the developer. Upa Lokayukta Justice Adi Says, “The 2005 circular is the reason for the sudden increase in the approval of layouts. There is no clarity in the circular about the next course of action when a builder fails to develop the layout. Moreover, the circular stipulates that after approval, the developer can sell 60 per cent of the sites. In some cases, builders were allowed to sell all the sites, but layouts still remain undeveloped.”

The Upa Lokayukta has directed the officials concerned to prepare an action plan to take action against the developers and also on amending the May 2005 circular.

Important amendment to Townplanning act

In the above back ground, the state cabinet had approved a proposal in June 2014 to amend the relevant provision in the Karnataka Town and Country Planning Act (KTCP) to bring in stringent regulations for layout developers. Accordingly amendments were passed to section 17 of The Karnataka Town and Country Planning Act, 1961 during the Assembly session held in December, 2014. In section 17 of the principal act for sub section 2 the following is substituted:

Section 17-

(1)The state Government shall by rules subscribe ………………………………………

(2) The Planning Authority may, within the prescribed period, sanction such plan either without modification or subject to such modifications and conditions as it considers expedient or may refuse to give sanction, if the planning authority is of the opinion that such plan is not in any way consistent with the proposals of the Master Plan.

Provided that where the Master Plans are not finally approved, in such cases the Planning Authority may sanction the layout plan as per the guidelines issued by the Government from time to time.                                                                                                   

(2A) If the Authority decides to sanction the layout plans under sub-section (2), it shall sanction provisional layout plan in accordance with such rules as may be prescribed for demarcation and development purposes showing the sites, street alignment, park and civic amenity area and any other infrastructure facility including the arrangement to be made for leveling, paving, metaling, flagging, channeling, sewering, draining, street lighting and water supply to the satisfaction of the Planning Authority and local authority. One copy of such plan shall be marked to the jurisdictional local authority. The owner shall relinquish the roads, parks to the local authority and Civic Amenity areas to Planning Authority through registered relinquishment deed free of cost without claiming any compensation.

(2B) The Planning Authority shall ensure the completion of all development works including all infrastructure facilities as mentioned in sub-section (2A) under the supervision of the concerned Authority/Agency/Department. On obtaining the certificate of completion from the concerned Authority/Agency/Department on having completed all development works and on relinquishment of the roads, parks to the local authority and Civic Amenity areas to the Planning Authority and handing over the same, the Planning Authority may issue the final layout plan affixing the seal of the Planning Authority for registration purpose.

Provided that no Commencement Certificate or licence shall be sanctioned or issued for buildings on sites in the layout unless the final layout plan is issued.”

For the above amendments, the assent of the Governor of Karnataka was received on 5th September, 2015 and Gazette Notification was issued on 10th September, 2015.

How the above amendments are beneficial?

(1) Private layout developers can no longer release sites to the buyers without completing all necessary infrastructure work. The process of releasing 60% of sites for sale at the now existing plan approval stage will be discontinued.

(2) Section 17-sub-sections (2), (2A) and (2B) of KTCP Act that deal with layout approvals will be tweaked. The end result of this change in the rule book would mean: developers of private layouts will have to complete all necessary infrastructure work like roads, water supply and sewerage lines, electricity connection, relinquishment of parks and open spaces to the planning authorities, only after which the site allotments will be allowed. The developer has to create the infrastructure in a manner where buyers can go in for immediate construction after registration of sites.

(3) After the amendment of section 17, the LPA will first sanction the provisional layout plan, so as to enable the developer of a layout to take up various works and other procedures to be followed for development of layout as stipulated in sub-section (2A) of section 17.

(4) Registration of all sites will have to be taken up only after 100 % development of the layout. At this juncture, all infrastructures and facilities will be available in the layout and buyer of a site can immediately take up the construction of house soon after registration of the site.

Who have to take steps for sincere implementation of the Amended Act?

(1) The Urban Development Department, Government of Karnataka, the Director of Town and Country Planning and the BMRDA should see that all the Local Planning Authorities under them understand the importance of amending section 17 of KTCP Act, 1961 and implement the same strictly.

(2) All Local Planning Authorities will strictly follow up the development work in the layout projects sanctioned by them provisionally as per sub-section (2A) of 17 of KTCP Act, 1961.

(3) All Sub-registrars in the jurisdiction of LPA should not take up any sites in the Layout without the Final Sanction of the Layout by LPA.

(4) The Inspector General of Stamps and Registration should instruct all sub-registrars under him not to take up registration of sites in a layout without the Final Sanction of the Layout by LPA.

With fraudulent realty companies mushrooming in the city’s property market, the amendment to KTCP Act comes as a welcome move. Many buyers fall prey after seeing attractive ads and struggle later to get money back or infrastructure in the layouts. The New amended act protect the buyers interest provided it is implemented sincerely by various Government Departments.


September 2015 Amendmet to Ktcp Act-1961

Other press reports and news items

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  1. Butter Fly says:

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