Stepping into another echelon of society, your home not only renders you with a sense of gratification but also security. But what if this security is not secure? Read more to find out about the Occupancy Certificate and how it can turn out to be a lifesaver.
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Today, success is measured in many forms. One of the most relevant proofs of your achievement in real life is owning a house. A house is not only a personal safe space, but also a necessity and a crucial form of investment. Primarily for people who shift into their own place after filling someone else’s pockets with rent money each month, this step-in life can mean everything. To protect the existence of your dream home and to ensure that your life savings do not end up as a contribution to an illegal building project, the Occupancy Certificate is an imperative document that cannot be overlooked. The possession certificate itself does not legalize the occupancy of the house.
We often hear about people getting evicted from their newly purchased apartment just because the builder never received the Occupancy Certificate. The matter often ends up as a legal dispute and the loss of hard-earned money and time is a tragic setback. To avoid being stuck in the loopholes of real estate law, make sure that the Occupancy Certificate is in your hands before moving in.
What is an Occupancy Certificate?
According to the Real Estate Regulation and Development Act, 2016, an Occupancy Certificate is defined as “the certificate, or such other certificate by whatever name called, issued by the competent authority permitting occupation of any building, as provided under local laws, which has provision for civic infrastructures such as water, sanitation and electricity.”
An OC is a legal document that authorizes the construction of the building in the eyes of the law. It certifies that the building plan is in accordance with the construction laws approved by the concerned authorities, and the place is fit to be occupied by people. An OC is issued by the local civic bodies of the relevant area. Without an Occupancy Certificate, a builder cannot guarantee basic civil amenities, and there is a high chance that the building is illegally formed, or is qualified under the category of land under construction.
What is the Importance of an Occupancy Certificate?
The Occupancy Certificate is a necessary legal document to authorize the safety of the building. Obtaining an Occupancy Certificate is important before moving into a place to eliminate the risk of lawful eviction and demolition. Without an OC, the municipal corporation does not supply the house with water, electricity, and sanitation connections. The building must also be deemed as ‘not a fire hazard’ to prevent any disasters in the future.
Read: Property Tax Guide: Importance, Calculation, and Online Payment for 2024
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The OC is also required while availing loans from banks or other financial organizations. Most importantly, one cannot resell the property at a good price without having an occupancy certificate first.
Therefore, one must ensure you have an Occupancy Certificate before legally stating the property is your own.
Documents Required to Obtain an OC
To obtain an OC, a builder needs to submit a certain set of documents to the local authorities. Usually, the OC is delivered within 30 days. However, in case the builder does not provide the OC, the homeowner can reach out to the municipality and apply for one.
Documents needed to apply for the Occupation Certificate are:
- Project Commencement Certificate
- Project Completion Certificate
- No Objection Certificates for Fire and Pollution
- Copy of the building’s sanctioned plan
- Area computation sheet of the floor signed by an approved architect
- Photographs of the building
- Photographs of solar panel and rainwater harvesting (If applicable)
After the required documents have been inspected and verified by the local authority, the Occupancy Certificate is granted.
Difference Between Occupancy Certificate and Completion Certificate
A Completion Certificate is issued by the authorities to state that the building is habitable and constructed according to the building plan approved by the municipal corporation. Whereas, the OC ensures that the building is legally constructed, follows the construction laws of the respective area, and is safe for the homeowner to move in. The occupancy certificate allows the builder to apply for various utilities.
Read: What are Society Transfer Charges as per the Housing Act and Rules in 2024?
The Major Difference Between the Occupancy Certificate and the Completion Certificate are
- The OC is issued by authorities to state that construction is in accordance with the building laws. The Completion Certificate is issued by the authorities to state that the place is habitable.
- The builder obtains the OC after getting the Completion Certificate to apply for water, electricity and sanitation connections. The Completion Certificate is needed to offer possession of the building.
However, both the Occupancy Certificate and the Completion Certificate are not required when applying for the registry of the house, but should still be obtained to eliminate the risk of future legal disputes, eviction, and demolition of the building.
What is a Temporary Occupancy Certificate?
A temporary or partial occupancy certificate is issued when the development of the project happens in various stages. After one phase is completely constructed and is safe to be occupied by homeowners, the authorities can issue a partial occupancy certificate. Partial Occupancy Certificates are subject to cancellation and must be replaced by Occupancy Certificates within the active time span of sanctioned plans. The concept of partial occupancy certificate was introduced to tackle the delay in the construction of large projects and to present evidence to buyers not being able to obtain Occupancy Certificate. However, a buyer will not be able to further sell the property just based on a partial occupancy certificate.
Read: Floor Space Index (FSI) in Bangalore: Everything You Need to Know
How to Check the Status of an OC Online
If the building project is registered under the Real Estate Regulation and Development Act (RERA), 2016, the status of the Occupancy Certificate can be monitored on the web portal of the relevant state’s RERA. RERA requires the builders to update the status of development of their building projects regularly. In case such information cannot be found on the web portal, the buyer is free to reach out to the local civic authorities.
What if the Builder Refuses to Provide the OC?
In case the builder has not provided you with an OC even after serving a notice, you are free to exercise your legal rights. The buyer must register a complaint in the consumer forum with the specified amount of the application fee. For projects that fall under the Real Estate Regulation and Development Act, 2016, homeowners can reach out to the authorities and file a complaint with an application fee of Rs.1000. The amount of the application fee may change in different states.
Read: Simple Introduction to Indian Property Tax
Also, note that the possession of the OC for an independent house (Row house) is not compulsory.
In the present era, the biggest sense of achievement in the form of investment lies in the ownership of your place. The sense of pride and security when the keys to your brand-new apartment or flat reach your hands is priceless. All the struggle in the world seems to be worth it and you expect a secure lifestyle moving further in life. But in some unfortunate cases, people have found themselves in legal turmoil after discovering that they were never given necessary legal documents like the Occupancy Certificate and have indirectly contributed all their money to a fraud building project.
To avoid getting caught in the crosshairs of the law, ensure the possession of the Occupancy Certificate before moving into your new home. In case the construction is in accordance with the relevant guidelines and there are no safety hazards, the Occupancy Certificate is granted. However, things might not be this simple always. If the construction of the building project ishappening at a large scale and is divided into different phases, the authorities may issue the Partial Occupancy Certificate to save the homeowner from paying both rent and the EMI and let the builder give possession of the constructed part. In case the builder does not provide the Occupancy Certificate, the homeowner can pursue a legal course of action.
If all the paperwork related to buying a new home gets too confusing for you, just contact NoBroker Legal Services. These experts deal with thousands of home purchases and know just what to look for and what you need. Click the link below to see how NoBroker can help you.
FAQ’s
Q1. Can the homeowner file an FIR if the builder refuses to provide an OC?
Ans. Yes, the homeowner can file an FIR under Section 405 of IPC if the builder does not provide the necessary legal documents or the Occupancy Certificate. In case the Police decline to file an FIR, the homeowner can go to court under Section 156(3) of the Indian Penal Code.
Q2. Can the builder ask for complete payment before providing the Occupancy Certificate?
Ans. According to the Real Estate (Regulation and Development) Act, 2016, the builder can ask for some specified chunk of the payment before giving the Occupancy Certificate. The developer or builder cannot force the homebuyer to make the complete payment.
Q3. Why is the OC required?
Ans. The Occupancy Certificate is required to file for home loans from a bank or any other financial institution. The Occupancy Certificate must also be submitted for water, electricity and sanitary connections from the municipal corporation.
Q4. What are the conditions under which a builder can be denied possession of the Occupancy Certificate?
Ans. a. When the builder has not received NOCs from the fire and pollution authorities.
b. When the builder fails to produce a commencement or completion certificate of the building project.
c. When the builder has not deposited the property tax.
d. The constructed building is not in accordance with the approved plans or layouts.
