However, the ordinance is likely to lead to a fresh round of legal battle as a section of developers and property buyers may move the high court against the policy.
The process of sanctioning plans had come to a standstill after the Karnataka high court in August 2021 ruled that the civic body had no legal sanction to levy fees for the services.
However, on Tuesday, the government issued an ordinance to amend existing laws so that the Palike could collect fees from property owners for plan sanction, issuance of licence, commencement and occupancy certificates, land rent for storing construction materials and providing security for the building. Had the ordinance not been issued, BBMP could have lost this power given the court’s ruling and even faced the prospect having to repay the amount collected in the past (about Rs 3,500 crore).
“While the ordinance gives much-needed clarity on levying fees, it also provides traction to the real estate sector as construction activities were reportedly hampered due to lack of it. We have resumed issuance of plan approval and people can apply for the same,” said BBMP chief commissioner Guarav Gupta.
Representatives of the real estate sector, however, are complaining that the ordinance is against the high court verdict.
“The changes envisaged in the ordinance are arbitrary and go against the basic principles of law. We will appeal in the high court against this ordinance,” said Bhaskar Nagendrappa, president of Confederation of Real Estate Developers’ Association of India (CREDAI), Benglauru.
The bigger concern is that the new order will lead property owners to shell out more money and, thereby, push up property prices.
Nagendrappa pointed out that till 2008, BBMP was levying a fee based on the area of the property and the composite amount after accounting for the various fees was Rs 130 per sq m. In 2016, the Palike decided to link the fee amount to the guidance value of the property, which varies depending on the locality, and the minimum amount to be shelled out for a property went up to Rs 330 per sq m.
As many parties moved the high court against this, the court passed the final order this August, after which the total sum payable came down to an estimated Rs 88 per sq m, considering some of the fee heads were scrapped.
‘Order is anti-consumer’
“Now, after this ordinance, a property owner will be required to pay a minimum of Rs 540 per sq m and a maximum of Rs 800 to get all clearances. Since the new order is anticonsumer, the government should scrap it,” added Nagendrappa.