BBMP Proposes Changes to Property Leasing Rules for Revenue Growth

BBMP has proposed new rules to lease its properties, including buildings and open spaces, to generate revenue for development projects, aiming to avoid additional taxes on citizens. The proposed changes are expected to generate substantial income for the BBMP by selling or leasing properties through a public auction process. To align with current market trends, the civic body plans to link the rental value of its properties to their government-determined guidance value and implement fixed lease terms.

The BBMP has officially notified its draft rules under the Bruhat Bengaluru Mahanagara Palike (Estate Management) Rules 2024. As part of this process, it has invited public objections within 30 days. These rules include a mandate to maintain a comprehensive inventory of all immovable properties under BBMP's estate wing.

Tushar Giri Nath, Chief Commissioner of BBMP, explained the need for these rules, stating that while regions outside BBMP areas adhered to stringent property management norms, those within the jurisdiction lacked discipline. By integrating these estate rules into the BBMP Act, the civic body aims to strengthen its authority, enhance economic self-reliance, and streamline property management processes.

Addressing Revenue Challenges

BBMP's new strategy focuses on leveraging its immovable properties, including buildings and open spaces, either owned or managed by the civic body. This decision comes as part of a broader effort to secure funds for ongoing and future development projects across Bengaluru. By adopting a structured approach to leasing and selling these properties, BBMP anticipates generating significant revenue without directly imposing additional taxes on residents.

According to the proposed rules, properties' rental values will now be tied to their guidance values as determined by government assessments. This ensures that rental income reflects the true market potential of BBMP's assets. Moreover, lessees will be required to pay a deposit amounting to 10 times the annual rental value, a provision designed to safeguard BBMP’s interests and ensure financial accountability.

Streamlined Leasing Process

Currently, property leases under BBMP are governed by approvals from the BBMP council and its standing committee. The draft rules introduce clear guidelines for lease durations and approvals, empowering the Chief Commissioner to lease properties for 5–15 years with council consent. For leases extending beyond 15 years but under 30 years, prior government approval will be mandatory. Notably, the new rules prohibit leasing BBMP properties for more than 30 years, ensuring that properties revert to BBMP control at the end of the lease period, free of encumbrances.

This shift addresses longstanding inefficiencies in property management within BBMP's jurisdiction. As Tushar Giri Nath, Chief Commissioner of BBMP, explained, "While areas outside BBMP adhered to these practices, property management within BBMP limits lacked discipline. The new estate rules aim to formalize these practices and empower BBMP economically, fostering self-reliance in revenue generation."

Inclusivity and Fairness in Leasing

The draft rules also emphasize inclusivity by reserving specific quotas for marginalized groups. These include a 7% reservation for Scheduled Tribes (STs), 17% for Scheduled Castes (SCs), and 2% for individuals with over 40% disability. This provision underscores BBMP's commitment to ensuring equitable access to its resources. Additionally, the rules limit lease extensions to a single instance, after which properties must be re-auctioned to maintain transparency.

The draft also introduces provisions for addressing non-compliance. Lessees failing to pay rent on time may face contract termination or forfeiture of deposits, reinforcing BBMP's stance on accountability and financial discipline.

Public Consultation and Feedback

As part of the regulatory process, BBMP has sought public objections to the draft rules within a 30-day window. This step ensures that stakeholders, including residents and civic organizations, have an opportunity to voice their opinions and provide feedback before the rules are finalized.

The draft rules further empower BBMP to sell immovable properties to state or central government departments, as well as public sector undertakings, subject to state government approval. This flexibility expands revenue generation avenues while retaining oversight and accountability.

BBMP's proposal reflects a pragmatic approach to address its revenue shortfalls while minimizing reliance on direct taxation. The focus on leasing through public auctions, transparent rent evaluations, and clear rules for lease durations positions BBMP to maximize the potential of its vast property portfolio.