25 per cent of BDA sites are being sold before the lease-cum-sale period

25 per cent of BDA sites are being sold before the lease-cum-sale period

The Hindu

The Government has reintroduced a lock-in period of 10 years to prevent misuse of land

# Allottees often sell their sites by vesting general power of attorney on the buyer
# At the end of lock-in period, a deed is prepared for sale and transaction formally completed

BANGALORE: More than 25 per cent of Bangalore Development Authority (BDA) sites are being sold well before 10 years of buying the site is completed. The Government in 2005 reintroduced a lock-in period of 10 years on the sale of sites to prevent misuse by land grabbers.

The sites are "sold", often within a week of the individual obtaining the lease-cum-sale deed from the BDA, to others who are first vested with general power of attorney for the sites, says a government official. At the end of lock-in period, once the sale deed is given to the allottee, a deed will be prepared for the person who was assigned the power of attorney. Although this technique is tedious and difficult, it is still being done, he adds.

"The individual, who is himself a lessee, assigns the general power of attorney to another individual by charging that person at least 20 per cent more than he paid for the site. Sometimes, the individual takes a percentage of the money when the power of attorney is awarded with an agreement to collect the rest after 10 years at the prevailing market rate than," says the official.

A lawyer says the situation can get tricky because "the entire agreement is contingent upon the fact that the allottee, a lessee, fulfils all the conditions mentioned by the BDA and is allotted a site at the end of the stipulated period." According to the BDA rules, the allottee will have to build a house within five years.

In most cases, the person who is vested with the general power of attorney will build a house on the site within the stipulated period.

However, the person will have no katha for the site nor will he be able to avail himself of a bank loan.

Neither the Government nor the BDA can do anything to prevent sale of sites by this practice. "In many cases, it is essential for an individual to award power of attorney to another person. It is a legally binding process," says the lawyer.

In April 2005, the Government amended the rules of the BDA to bring back the lease-cum-sale method because it was found that many individuals were applying for BDA sites and then selling them immediately for a profit.

The lease-cum-sale method was practiced till 2000 when the clause referring to it in the BDA rules was omitted.

According to the lease-cum-sale method, the individual who has been allotted a site will get a sale deed from the BDA only after 10 years.