An occupancy certificate is an important document you need to obtain while buying any new property. We explain what it is and why you need it when investing in real estate
An occupancy certificate (OC), issued by the local authorities, certifies that a building is fit for occupation and has been constructed as per the approved plan and in compliance with local laws.
What is the importance of an occupancy certificate?
An occupancy certificate is a document that is issued by a local government agency or planning authority, upon the completion of the construction of a new project. The certificate is proof that the project has been built, by adhering to the applicable building codes, relevant regulations, and laws. It is the responsibility of the developer to obtain an occupancy certificate, once the project has been completed. The certificate is an indication that the building is suitable for occupancy. An OC is required when applying for water, sanitation, and electricity connections.
For homeowners, an OC is necessary to cement the legal status of the property they own. In the absence of a valid OC for a property, the local municipal body has the right to initiate legal action, because, without an OC, a project is deemed an unauthorized structure. You will require an OC, when you apply for a home loan, or if you are purchasing a resale property. You would also need a valid OC when you wish to sell your property.
How can you obtain an occupancy certificate?
Ideally, a developer must apply for an OC, within 30 days of the completion of the project. As a property owner, you can also apply for an OC from the local corporation or municipality. If the project has fulfilled all the criteria necessary for approval, you will usually receive a copy of the OC within 30 days of the application. Here are the documents that you will need to submit, as part of your application:
- Project commencement certificate.
- Project completion certificate.
- NOCs for fire and pollution.
- Latest property tax receipt.
- Copy of the building’s sanctioned plan.
Difference between occupancy, completion, and possession certificate
The authorities issue a completion certificate (CC) to a housing project, after ensuring that it has all requirements in place to be habitable. It is only after a CC is issued to a project that it becomes ready for possession for home buyers. An OC, on the other hand, is a certificate stating that the project has been built in accordance with all construction norms, building bye-laws, etc. It is only after a project receives an OC, can the builder apply for various utilities for the project. A possession certificate is issued to the buyer by the developer, as proof of transfer of ownership. It mentions the date of possession of the property by the new buyer.
|Occupancy certificate||Completion certificate||Possession certificate|
|Issued by the authorities, stating that the project follows all construction norms and building bye-laws.||Issued to a housing project, after ensuring that it has all requirements in place to be habitable.||Issued by the developer indicating the change in ownership.|
|Builder applies for utilities (electricity, power, water supply, etc.) after receiving the OC.||Possession is offered once the CC is issued||A possession certificate is issued within 30 days if the building has been constructed in compliance with accepted plans.|
Your rights as a property owner
If the developer refuses to provide an OC, or he hasn’t acquired one even after the project has been completed, you can take legal action against the developer. Legal notice can be issued, asking him to provide the OC and you can even take the case to a consumer court. Legislation like the Real Estate (Regulation and Development) Act (RERA), is expected to significantly decrease instances of negligence or fraud by developers. However, as property owners, you must be vigilant and ensure that important documents like the OC are in place, to secure your rights over your property.
What is a ‘Temporary Occupancy Certificate’?
A temporary occupation certificate is subject to cancellation. The term ‘temporary occupancy certificate’ does not exist in any rule book of any authority. However, the term ‘partial completion certificate’ exists, which certifies that the builder can facilitate tower-wise completion. Buyers should keep in mind that the lifespan of a sanction plan is five years, which at best can be extended for two years along with a fine. Once a buyer has taken possession of a temporary OC, he must promptly ask the builder for a permanent OC on completion.
How to check the status of the Occupancy Certificate?
The status of a project can be accessed on the web portal of the concerned state’s RERA if the project is registered under the Act. The RERA mandates that all builders update the developments in the project on a regular basis, on the portal. If the same is not updated or available on the web portals, it can be confirmed by the local authorities or civic bodies.