One of my clients recently had a case which I am explaining below and if you are stuck in such similar situation, here is what to do.
Note: Due to attorney-client privilege, I cannot disclose complete case details or identify the actual parties involved. However, I am sharing the essential facts and legal approach so that if you find yourself in a similar situation, you can understand the available solutions and legal remedies.
TL;DR: Buying property with extra unauthorised floors carries serious legal risks — demolition orders, municipal fines, black money payments, and potential criminal liability under building laws. Regularization schemes like akrama-sakrama are not guaranteed and may not cover recent violations. Always verify sanctioned plans before purchase and engage an advocate experienced in real estate litigation.
Ramesh Gupta, a software professional from Pune, had his eyes set on a profitable investment. A PG building in the heart of Nagpur — Koradi Road area — promising 9% rental returns annually. The broker, Anil Kapoor, assured him everything was fine. "These extra two floors? Everyone does it," he said. "The akrama-sakrama scheme will regularize them."
Ramesh nearly signed the deal. But something felt off. He had read about municipal demolition drives in Surat and Indore. So he approached the office of Advocate Sudhir Rao for a due diligence check.
Good thing he did. The sanctioned plan was for ground plus three floors. The building had five. The developer had never applied for regularization. Ramesh's bank, ICICI Bank, had flagged the property title during loan processing — they wouldn't finance such deviation.
Advocate Sudhir Rao's expertise in property and municipal law helped Ramesh see what the broker wasn't telling him. The Chamber advised withdrawing from the deal. Ramesh saved himself from a potential demolition notice, a criminal case under municipal laws, and years of litigation. The seller later tried to push through the sale to another buyer — and that buyer's building was sealed by the Nagpur Municipal Corporation within six months.
Key Facts of the Case
- The property's sanctioned plan allowed only ground plus three floors; the building had been constructed with five floors.
- No application for regularization under the akrama-sakrama scheme had ever been filed by the seller or developer.
- ICICI Bank refused home loan financing after the title audit revealed the unauthorised construction.
- The local Nagpur Municipal Corporation had a history of issuing demolition notices for similar violations in the Koradi Road area.
- Ramesh Gupta paid a consultation fee of approximately Rs. 25,000 for a full legal due diligence report — which uncovered the risks.
- A neighbouring property owner had received a show-cause notice under Section 318 BNS (criminal trespass / mischief relating to unauthorised construction) after a complaint by the corporation.
- The buyer who purchased the property after Ramesh backed out faced a sealing order within six months of purchase.
The Direct Legal Answer
What happens if I buy a building with extra unauthorised floors?
The municipal corporation can issue a demolition notice under the local building by-laws. They don't always act — but when they do, the consequences are severe. You could lose the entire structure above the sanctioned floor, face fines, and even criminal prosecution under BNS provisions relating to mischief and public nuisance.
Will the akrama-sakrama scheme protect me?
Not necessarily. These regularization schemes are periodic and discretionary. They often exclude buildings that violate structural safety norms, fire safety requirements, or setback rules. And they typically impose heavy fines plus a regularization fee. There's no guarantee a scheme will come during your ownership period.
What about rental income and appreciation?
The 8-10% yield you're seeing is based on illegal floors. Remove those floors, and your rental income collapses. Plus, banks won't finance such properties, limiting your buyer pool when you want to sell. The appreciation story works only if you find another buyer willing to take the same risk.
Advice in Such Cases
Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation to come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.
Second, always obtain a certified copy of the sanctioned plan from the municipal corporation — don't rely on what the seller or broker shows you. Third, check if any regularization application has been filed and whether it's been approved or rejected. Fourth, negotiate the price to reflect only the legally permissible built-up area — not the illegal floors. A property lawyer with domain-specific experience in municipal law and land acquisition disputes will spot these issues far faster than a general practitioner. The nuances of local by-laws and regularization schemes vary by city — one-size-fits-all advice won't protect you.
Applicable Sections of Law
- Section 318 BNS — Mischief causing damage to public property or unauthorised construction — applies if the municipal corporation initiates criminal proceedings.
- Section 190 BNSS — Complaints by public servants regarding offences under municipal laws — the path through which corporations file cases.
- Section 126 of the Transfer of Property Act, 1882 — governs the validity of transfers involving properties that may be subject to demolition or forfeiture.
- Section 55 of the Transfer of Property Act, 1882 — buyer's right to disclosure of material defects by the seller — including unauthorised construction.
- Order 39 Rule 1 and 2 CPC — if you need to seek an interim injunction against demolition while challenging a corporation notice.
Note: Local municipal acts (e.g., Maharashtra Regional and Town Planning Act, 1966, or relevant state Act) also apply — their specific sections are state-specific.
Jurisdiction — Where to File the Case
If the municipal corporation issues a demolition notice, the challenge lies before the Civil Court (Senior Division) with territorial jurisdiction over the property's location. For criminal complaints under Section 318 BNS, the jurisdictional police station that covers the area registers the FIR, and the case proceeds in the Magistrate's Court. In Nagpur, for instance, the Koradi Road area falls under the jurisdiction of the Nagpur Municipal Corporation's Building Permission Department and the local police station. Getting the jurisdiction wrong can delay relief by months — another reason to engage counsel who handles these matters regularly.
If You Are the Victim
- Do not transfer any money beyond a small token advance until full due diligence is complete.
- Obtain a certified copy of the sanctioned plan from the municipal corporation before signing any agreement.
- Check the property's title deed for any prior regularization approvals or pending notices from the corporation.
- Get a professional structural engineer to inspect the building and certify that the additional floors are structurally safe.
- Insist on a clause in the sale deed that the seller indemnifies you against any future demolition or penalties arising from pre-existing unauthorised construction.
Documents You Must Keep Ready
- Certified copy of the sanctioned building plan from the municipal corporation.
- Title deed and chain of ownership documents (last 30 years ideally).
- All correspondence with the seller and broker (emails, WhatsApp messages, agreements).
- Receipts of any payments made (including token advances).
- Tax receipts and property tax payment records.
- Photographs and videos of the property showing the number of floors and construction details.
- Any regularization application or order, if one exists.
- Encumbrance certificate from the sub-registrar's office (to verify loans or liens).
What Evidence Is Required?
- Primary evidence: The sanctioned plan, the title deed, and the sale agreement — all original documents.
- Secondary evidence: Photographs showing the unauthorised floors, GPS-tagged videos, and independent structural engineer's report.
- Documentary evidence: Broker's representations in writing or recording (if permissible under law).
- Expert testimony: An architect or engineer can certify the deviation between the plan and actual construction.
- Municipal records: A certificate from the corporation confirming the sanctioned plan and the absence of regularization.
- Witness accounts: Neighbours or previous tenants who can testify about the building's history.
- Bank records: Refusal letters from banks declining loans due to unauthorised construction strengthen your case of being misled.
How Courts Typically Approach Such Cases
Civil courts are generally protective of bona fide purchasers but strict on property law compliance. If you bought without due diligence, courts may hold you partly responsible and deny discretionary relief like an injunction against demolition. However, if the seller actively concealed the unauthorized construction and you can prove it, courts may order the seller to compensate you or reverse the sale. The trend in municipal law litigation is towards strict enforcement — courts rarely grant blanket stays on demolition if the violation is clear and substantial. This makes getting your legal strategy right at the start critical.
Timeline of Legal Process
- Due diligence (before purchase): 2-4 weeks — plan verification, title search, structural inspection.
- If demolition notice is issued: You have 30 days to file an appeal before the appellate authority under the municipal act.
- Civil suit for injunction: Filing to first hearing — 2-4 months. Interim orders may take 2-3 hearings (30-60 days).
- Full trial: 12-24 months depending on court backlog and complexity.
- Appeal to District Court or High Court: 6-12 months if challenged.
- Criminal proceedings (if initiated): Trial may take 2-5 years — bail is typically available since the offence is bailable.
Understanding the Costs
The total cost of a matter like this varies significantly from one case to the next — it depends on the complexity of the dispute, the forum involved, the number of hearings, and the specific facts of your situation. There is no single fixed figure that applies to everyone.
A professional advocate can give you an accurate estimate only after reviewing all your facts and documents in a consultation.
Can the Matter Be Settled Out of Court?
Yes, in many cases. If you discover the unauthorised construction before completing the purchase, you can renegotiate with the seller or walk away. If a demolition notice has been issued, you can approach the municipal corporation's regularization cell and apply under the applicable scheme if one is open. Mediation through Lok Adalat is also an option for civil disputes between buyer and seller. For criminal proceedings under Section 318 BNS, the matter is compoundable — meaning the parties can settle, and the court may drop the case. But remember: the corporation may not withdraw its notice just because you and the seller reach an agreement.
Common Mistakes People Make
- Trusting the broker or seller without independent verification. Brokers earn commission — their interest is closing the deal, not protecting you legally.
- Relying on regularization schemes that may never come. Akrama-sakrama is not guaranteed and may exclude recent violations.
- Paying black money for the unauthorised portion. This means you lose all legal protection — you can't sue for a refund from someone you paid illegally.
- Signing the agreement without a clause protecting against demolition risk. A good sale deed should include indemnity from the seller for any pre-existing violations.
- Engaging a lawyer who does not handle property and municipal law regularly. This type of matter involves nuanced procedural strategies — from challenging demolition notices to negotiating regularization — that a general practitioner may miss. Domain-specific experience directly affects how quickly and effectively your case proceeds.
- Ignoring fire safety and structural stability. An extra floor without proper load-bearing design can collapse — and if it does, criminal liability for death or injury under BNS will follow.
FAQs People Normally Have
Can the municipal corporation really demolish only the extra floors?
Yes. Typically, the corporation demolishes only the unauthorised portion above the sanctioned floor. But if the extra floors affect the structural integrity of the entire building, they may order complete demolition. This is rare but possible.
Will a bank give me a home loan for this property?
Rarely. Banks perform title audits and valuation checks. Unauthorised construction will likely lead to loan rejection — or a reduced loan amount based only on the sanctioned area. ICICI Bank, HDFC Bank, and SBI all follow strict norms here.
Is there any way to legalize the extra floors after purchase?
Only through a regularization scheme if one is open. Some states allow regularization upon payment of fines and development charges. But the scheme must cover the type of violation and the year of construction — and it's never guaranteed.
What if I already bought such a property? Am I stuck?
Not necessarily. You can sue the seller for misrepresentation and seek rescission of the sale deed or compensation. The limitation period for such a suit is three years from the date you discovered the defect. Move fast — consult a property lawyer immediately.
This article is general legal information, not legal advice. Consult a qualified advocate about your specific situation.
Advocate Sudhir Rao, Supreme Court of India