What Karnataka's move to exempt small plots from Occupancy Certificates means for Bengaluru's real estate market

Karnataka may exempt buildings under 1200 sq ft from occupancy certificates, raising hopes for owners; sparking fears of unregulated construction, experts say

In a move that could reshape building compliance norms across Karnataka, the state’s Urban Development Department (UDD) has proposed exempting residential buildings constructed on plots measuring up to 1,200 square feet from the mandatory requirement of obtaining Occupancy Certificates (OCs).

In a move that could reshape building compliance norms across Karnataka, the state’s Urban Development Department (UDD) has proposed exempting residential buildings constructed on plots measuring up to 1,200 square feet from the mandatory requirement of obtaining OCs. (Representational Image) (Souptik Datta )

"Buildings up to ground + 2 floors or stilt + 3 floors on plots exceeding 1200 sq ft may be exempted from obtaining occupancy certificate (OC)," the proposal signed by Tushar Giri Nath, additional chief secretary at UDD and accessed by HT.com, showed.

The meeting, chaired by Giri Nath, recommended amendments to key legislations, including the Greater Bengaluru Governance Act, 2024, the Karnataka Municipal Corporations Act, 1976, and the model building regulations under the Rural Development and Panchayat Raj Department.

The proposal to waive OCs for buildings under 1,200 sq ft has sparked a mix of relief and concern among builders, homeowners, and urban planners. While the exemption could ease regulatory burdens on thousands of small property owners, especially in Bengaluru’s dense and unplanned neighbourhood, experts fear it may open the floodgates to unsafe, unregulated construction and further strain the city’s fragile infrastructure.

What the proposed exemption means

Occupancy Certificates are currently required to ensure a completed building adheres to approved plans, municipal by-laws, and safety norms. Without an OC, a property is technically unfit for occupation and is ineligible for utilities such as water and electricity from government agencies. However, many smaller buildings in Bengaluru and other urban areas are constructed informally, often without OCs, Dhananjaya Padmanabhachar, director of the Karnataka Home Buyers Forum, pointed out.

If approved, the exemption would essentially legalise properties, at least those on plots under 1,200 sq ft, offering relief to homeowners who struggle with compliance or whose builders failed to secure the necessary approvals. The move could also reduce red tape for first-time homebuyers or those constructing budget homes, experts say.

Bengaluru needs better real estate regulation, say experts

“If you go to any locality in Bengaluru today, you will find that most buildings have some form of violation; they’ve deviated from the sanctioned plan in one way or another,” said Padmanabhachar, an expert familiar with the matter. “As per the Supreme Court’s directives, it is the responsibility of the city corporation to regulate and take action against such violations. But under the new amendment, individuals will be allowed to construct on plots below 1,200 sq ft without an occupancy certificate, and the corporation will no longer be held accountable for any deviations.”

He cautioned that this could open the door to widespread misuse. “Instead of enforcing stricter zoning regulations and ensuring planned development, this move may actually encourage more illegal constructions,” he said, pointing out that builders may exploit the exemption to erect ground-plus-two floor structures without adhering to any formal approval norms.

“This move will almost certainly lead to a rise in illegal constructions,” said Vittal BR, an advocate at the Karnataka High Court. “People will get one sanctioned plan on paper and construct something entirely different in reality, knowing that no occupancy certificate will be required to validate it later.”

He said that the exemption could trigger a rush of new construction in smaller plots across the city. “More and more people will start building on small sites because there’s no OC needed. It becomes extremely difficult for authorities to monitor or control these developments, especially when deviations from the approved plan go unchecked. In the long run, it might impact the city's planning and safety standards.”