Karnataka's Move to Exempt Small Plots from Occupancy Certificates: What It Means for Bengaluru's Real Estate
Karnataka's Urban Development Department proposes to exempt residential buildings on plots up to 1,200 square feet from obtaining Occupancy Certificates. This move could ease regulatory burdens but raises concerns about unregulated construction and infrastructure strain.
Real EstateOccupancy CertificateBengaluruKarnatakaUrban DevelopmentReal EstateJul 25, 2025
"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 neighborhoods, experts fear it may open the floodgates to unsafe, unregulated construction and further strain the city’s fragile infrastructure.
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.
However, the proposal has also raised concerns. “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.
“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,” added Vittal BR, an advocate at the Karnataka High Court.
The implications of this proposal are significant for Bengaluru’s real estate market and urban planning. While it may provide immediate relief to small property owners, the long-term effects on the city’s infrastructure and safety standards are yet to be fully understood.
Frequently Asked Questions
What is an Occupancy Certificate (OC)?
An Occupancy Certificate (OC) is a document issued by the local municipal authority that certifies a building is fit for occupation and complies with approved plans, municipal by-laws, and safety norms.
Why is the Karnataka government proposing to exempt small plots from obtaining OCs?
The proposal aims to ease regulatory burdens on small property owners, especially in densely populated and unplanned neighborhoods, and reduce red tape for first-time homebuyers or those constructing budget homes.
What are the potential risks of this exemption?
Experts fear that the exemption may lead to unregulated and unsafe construction, as builders may exploit the lack of oversight to deviate from approved plans, potentially straining the city's infrastructure and affecting long-term planning and safety standards.
How will this affect property owners in Bengaluru?
If approved, the exemption will legalize properties on plots under 1,200 sq ft, offering relief to homeowners who struggle with compliance or whose builders failed to secure necessary approvals. However, it may also lead to a rise in illegal constructions.
What is the role of the Urban Development Department (UDD) in this proposal?
The UDD is the state government department responsible for urban planning and development. It has proposed the exemption and recommended amendments to key legislations to implement this change.
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