Buying B-Khata Property in Bangalore: A Comprehensive Guide
Introduction
When considering real estate investment in Bangalore, one common question arises: Should we buy B-Khata property? B-Khata properties are often sought after due to their lower price tags compared to A-Khata properties. This guide aims to provide a detailed analysis of B-Khata properties in Bangalore, including the risks and benefits, based on an in-depth case study of a 2BHK flat purchased over a decade ago.
Case Study: A 2BHK Flat in Bangalore
Initial Purchase
My client booked a 2BHK under-construction flat in 2012 for Rs. 26.51 Lakhs. The approved plan for the apartment consisted of four floors, and it was built on land classified as A-Khata.
Construction and Finalization
By 2014, the builder had almost completed the construction. My client paid the final consideration of Rs. 26.51 Lakhs and registered the property successfully. The registered sale deed is available for reference, highlighting the sale consideration.
Deviation in Construction
Post-construction, the builder constructed two additional flats on the terrace, deviating from the approved plan. This deviation led to an inability to obtain the Occupancy Certificate (OC) from the local body.
Without the necessary OC, my client could not get an A-Khata for the flat. Instead, they received a B-Khata. A B-Khata is a document of title that is issued in cases of the construction of buildings on land without a correct or completed transfer deed, or if the construction has been undertaken without proper authorization.
The B-Khata for this property:
Sale of the Flat
After 10 years in 2024, when the area had developed significantly and become part of the Varthur locality, my client decided to sell the 2BHK flat for Rs. 49.50 Lakhs. While the market value in this area with an A-Khata is approximately 1 crore, the B-Khata naturally limited the property's valuation.
Despite the lower valuation, the offer was still considered a good deal for a buyer, especially with an additional benefit of a 70% loan from SBI.
Sale deed reference:
Conclusion
The purchase of B-Khata property constructed on A-Khata land with minor deviations from the approved plan can be considered, though with caution. However, buying B-Khata property constructed on B-Khata land is generally riskier and not recommended due to potential lack of approvals for basic amenities like water, electricity, and sewage.
While B-Khata properties can be bought and sold without major issues, the undervaluation and lower return on investment (ROI) make them less attractive as an investment option.
Final Thoughts
Understanding the nuances between A-Khata and B-Khata is crucial for any real estate investment in Bangalore. If you are considering purchasing B-Khata property, ensure thorough due diligence and consider the long-term implications on your investment.