A document provided by the seller to the buyer at the time of sale of a property mentioning that the property has been transferred on a certain date is called a possession certificate. The possession certificate is issued by Tahsildar in rural areas and by RDO (Revenue Divisional Officer) in the urban areas. Before issuing the possession certificate, the property is inspected by the local authorities and supervisors.

Obtaining a possession certificate may take up 7 days from the date on which the inspection is carried out. The possession certificate has several uses and it is an important document that is required for including the property in the revenue records. It is also an important document that is required to acquire a home loan and for obtaining subsidies by the government.

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Documents for possession certificate

The various documents that need to be submitted to obtain a possession certificate include:

  • Proof of ownership of property such as the registered sales deed or title deed of the property.
  • You may also be required to submit a copy of the registered sales agreement.
  • Encumbrance certificate, showing that the property is free from any encumbrances or financial liabilities. The encumbrance certificate is also an important document that is required to prove that the property is free from any form of legal liabilities as well.
  • Identity proof such as AadharCard, Passport, Voters ID, Ration Card, etc. you may also be required to submit the proof of your signature. A Ration Card is required to act as proof to identify the category that the individual belongs to as the fee for obtaining a possession certificate is fixed based on the category such as Schedule Caste, Schedule Tribe, below the poverty line, etc.
  • The land tax records. The latest tax receipts may also be provided to prove that no tax liabilities are pending on the property.
  • In states like Telangana includes Passport-size photograph (scanned), Ration card, Income details, Building completion notice as issued by the architect or engineer, and Photographs of the property.

It is to be noted that different states have certain different policies about the documents and the fees that need to be paid for obtaining a possession certificate, thus it is recommended that you visit the official portal of the government concerned to crosscheck the same.

Is property registration mandatory for obtaining a possession certificate?

As already mentioned above, the possession certificate is an important document that is required to avail the various benefits such as tax deduction and also the government subsidies. It is also a requisite for adding your property to the land revenue records and also for availing bank loans. To avail of various benefits, it is important that the buyer obtains and produces the possession certificate as proof that the right of possession lays in him.

As already stated, the possession certificate is obtained from the authorities by the buyer himself by making an application to the authorized state government body. The application can also be made through the state governments’ online portals. The possession certificate is issued to the buyer within a period of a maximum of 30 days in case of newly constructed buildings. The certificate is issued after ensuring that the construction works carried out on the property is by the approved building plan.

The registration of the property is an important factor to obtain a possession certificate. The authorities for registering a property according to the law conduct various searches and ensure that the various documents are in place. One such document is the sanctioned building plan and in the absence of the same, the possession and the construction work on the property cannot be regularized.

For obtaining a possession certificate some state requires you to provide proof of ownership such as the registered copy of the sales deed or sales agreement. Legally the registration of the property, as well as the project, is important as the occupancy certificate should also be acquired to prove the possession of the property as the possession certificate alone does not hold much legal value.

How the possession certificate affects the home loan?

As already stated above, one of the most important requisites for acquiring a bank loan is the possession certificate. The possession certificate required by most of the financial institutions is to ensure that the borrower is in complete possession of the property and that he has the right to keep the property as the security.

Thus it is to be stated that, the borrower that wishes to keep the property as a security for his loan should ensure that he produced the original copy of the possession certificate along with the occupancy certificate which is also an important document which shows that the possession of the property has been transferred. Without both these certificates, the buyer is less likely to get a loan despite the submission of all other required documents.

The possession letter is also an important document to be submitted for availing a home loan if you are a first-time purchaser of the property. This letter needs to be acquired from the builder and it is proof that the right of possession, vested in the developer has ceased and that the property has been transferred to the buyer on a certain date.

Conclusion

Thus concluding, it is to be stated that possession certificate is an important document that is required by the buyer. It is a proof of ownership along with the possession certificate and also the proof of possession of the property. The possession certificate is a requisite for obtaining a bank loan and including the property in the revenue records of the property. The process for obtaining the possession certificate varies from state to state and so does the fee and the documents that are required for obtaining the certificate. You may also get the property registered to obtain the possession certificate.