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Karnataka Cabinet approves regularisation of B-Khata properties in Bengaluru. Here’s what it means for property owners
Bengaluru real estate: Regularising B-Khatas and upgrading them to A-Khata status could boost property values and provide legal clarity, experts say
In a major relief for homeowners, the Karnataka State Cabinet has approved the regularisation of B-Khata properties issued by the Bruhat Bengaluru Mahanagara Palike (BBMP) up to September 2024. This move upgrades them to A-Khata status, granting access to essential civic amenities and providing long-awaited legal clarity to property owners.
“When giving it, we will specify the parameters. If property owners comply with the parameters, then B-Khata will be issued,” Law Minister HK Patil said, addressing the reporters after the Cabinet meeting on July 18.
"To avail B-Khata, there will be certain parameters too. While A-Khata will be a perfect document, B-Khata certificates will be issued for properties with some lacunae, but with some exemptions," he said.
Once regularised, B-Khata property owners will get certificates granting legal status, enabling sales, bank loans, and mortgages previously not allowed, experts say.
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What is a B-Khata?
B-Khata is a type of property record maintained by the BBMP for properties that do not fully comply with legal and planning norms. These include buildings in unauthorised layouts, constructions without approved plans, or those lacking occupancy certificates. Even though these properties are not entirely legal, owners are still required to pay property tax, and their details are recorded for tax purposes.
However, owning a B-Khata property comes with several drawbacks. These properties are not considered fully legal and face restrictions when it comes to selling, getting building approvals, or applying for trade licenses. Banks and financial institutions usually do not offer loans against them. Compared to A-Khata properties, which are fully compliant with local laws, B-Khata properties generally have lower market value and limited legal benefits, experts say.
Why did the government regulate B-Khata properties?
A press note issued by the state government said that unauthorised construction and unplanned development have led to the issue of lakhs of B-Khatas, which need to be regulated and controlled.
“There is a need to bring B-Khata properties under the control and regulation of the Karnataka Town and Country Planning Act. The Greater Bengaluru Governance Act prohibits the issuance of B-Khata for unauthorised properties created or constructed after September 30, 2024. The concept of B-Khata was introduced in 2009, and therefore all Khatas issued before 2009 were A-Khata or proper khata,” it said.
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How will it benefit homebuyers?
Once regularised, B-Khata property owners will be issued certificates that grant legal ownership certificates to their properties, said Akash Bantia, an advocate. "This legal clarity will allow them to mortgage their properties, apply for bank loans, and carry out property-related transactions that were earlier difficult or impossible due to the uncertain status of B-Khata properties. For years, these properties existed in a legal grey zone, which limited the financial options available to their owners."
According to Bantia, the regularisation move will also serve as a formal proof of ownership, offering long-overdue relief to thousands of residents. “Many owners did not have clear documents, and banks were wary of such cases. Some lenders outright refused loans, while others imposed higher interest rates due to the risks involved,” he explained.
With official ownership certificates, the credibility and property prices of these properties may also increase, experts say.
"This clarity could also lead to an increase in property prices, particularly for B-Khata plots located in prime or developing areas. Locations with good infrastructure and connectivity that were held back due to unclear titles may now see renewed interest from buyers and investors. As legal hurdles are cleared, these properties could become more competitive in the real estate market, attracting better financing options and improving resale potential," Bantia said.
