What are the risks of buying Revenue Sites?
In general, there is a lot of risk associated with buying a Revenue Site. This is because there are significant obstacles to overcome with Revenue Sites such as:
- Going through the DC Conversion or Land Use Conversion process to convert the site from agricultural to non-agricultural use
- “Regularisation” of the site
Regularisation of a site involves paying the Bangalore Bruhat Mahanagara Palike (BBMP) what are known as Betterment Charges.
There has been a lot of forward and backward movement by the Karnataka government on the issue of Regularising Revenue Land. Regularising these sites means more revenues for the government via stamp duty, registration fees, property taxes etc. In spite of that, the path for Regularising land is not a simple and clear matter.
In some cases Regularisation is not possible at all for Revenue Sites. For example, if there are high-tension wires running over the site, or if the land lies in a region where storm water drains into, or if the site is in a river bed etc, regularisation of land is not an option.
In the event that you are not able to go obtain the DC Conversion and regularise the site, you will not have any Khata Documents on the site which will prevent you from applying for a loan from the bank on the property or freely sell the property.
One final concern is that since good Town Planning is usually not done for these lands, the Civic Amenities which will ultimately be provided by the government may not be comparable to other areas of the city which are far better planned. This might directly impact the value of property and how much it will appreciate over the coming years.
What are the potential rewards of buying Revenue Sites?
Having discussed the significant risks, the potential rewards of Revenue Sites can be extremely attractive. The fact that there is so much uncertainty turns away many buyers and makes the current prices of these lands very attractive. Thus, if the conversion and regularisation of the site goes through, you stand to gain in a very significant way.