The Bangalore Development Authority has revised the vacant plot penalty in Bengaluru, introducing a graded slab system after public objections to the earlier 10% charge. The new structure applies to plot owners who failed to build within five years.
In a significant decision affecting plot owners in Bengaluru, the Bangalore Development Authority (BDA) has revised the penalty imposed on allottees who failed to construct houses or buildings within the stipulated five-year period, as mandated under the lease-cum-sale agreement. The authority has introduced a graded penalty structure ranging from 2.5% to 10%, replacing the earlier uniform 10% penalty on the guidance value of vacant plots.
The revision follows objections raised by members of the public after a notification dated 23 September 2024 imposed a flat 10% penalty based on the prevailing guidance value. After deliberations in the authority’s governing body meeting, the penalty structure was reconsidered and modified. However, the revised penalty does not apply to plots allotted in Nadaprabhu Kempegowda Layout and Arkavathy Layout.
Revised Rate Applicable To Prevailing Guidance Value
According to the BDA, in cases where construction was not completed within the stipulated five-year period as per the registered lease-cum-sale agreement but was undertaken subsequently, the revised penalty rate will be calculated based on the guidance value prevailing on the date of construction.
If the relevant guidance value is unavailable, the allottee will be required to pay interest at the Marginal Cost of Funds Based Lending Rate (MCLR) plus 2% on the value mentioned in the lease-cum-sale agreement deed, calculated from the date of execution of the deed to the present date.
Alternatively, the penalty on a vacant plot will be determined as the lower of the two calculated amounts, based on the applicable percentage and the current prevailing guidance value corresponding to the plot size.
Option To Return Plot
Allottees who are unwilling to pay the vacant plot penalty may opt to surrender the plot to the authority. In such cases, a refund will be issued after deducting 12.5% of the amount paid.
If the penalty is not paid within 90 days from the date of receipt of the endorsement, interest at the State Bank of India’s MCLR plus 2% will be levied.
The BDA clarified that this provision does not apply to allottees who have already paid the vacant plot penalty. The amount paid earlier will not be refunded under any circumstances, the Commissioner stated in a press release.
Revised Penalty Slabs Based On Plot Size
The revised penalty rates, based on plot size and prevailing guidance value, are as follows:
- Up to 600 sq ft (20×30 plot) – 2.5%
- 601 to 1,200 sq ft (30×40 plot) – 5%
- 1,201 to 2,400 sq ft (40×60 plot) – 7.5%
- 2,401 sq ft and above (60×40 and larger plots) – 10%