The terms’ possession and ownership may sound alike. However, they are distinguished according to the law as their definitions contain distinguishing factors in them. Salmon, one of the eminent jurists, defines ownership as the relationship between a person and the property that forms the subject-matter of the aforesaid ownership. Ownership is also a right that is enforceable at rem and not merely against a person.

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A person should satisfy six conditions to claim the ownership of the property and this includes:

  • He should have the absolute right of possession irrespective of the fact whether he has the property at present or not.
  • He should possess the undisputed right to enjoy and use the benefits of the property.
  • He may also possess the right to exhaust them while he uses them.
  • He shall have the right to destroy or alienate the property he owns during his lifetime. However, this right has been restricted by the law.
  • The duration of ownership of a property is not limited and is un-determined unlike the possession of the property.
  • Ownership is residuary. For example, when A lends out his house to B, he will remain the owner despite the change in possession.

On the other hand, Salmon defines possession as the claim that the person has in putting the property to exclusive use is called possession. This also means that the person has the right to use the property according to their choice and also has the right to decide the extent of others’ use in the property as well. Not all those who possess the property need to be owners of the property. The table below lists certain differentiation between the two.

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What are the rights that are obliged with the possession certificate?

The various rights that are associated with obtaining a possession certificate include the following:

  • The buyer of the property has complete possession of the property and he is entitled to use the property in the way he wishes to use them.
  • The buyer is also benefited if he obtains a possession certificate as it eases the process of transfer of the property’s possession and even the title of the person in possession of the property is the owner of the property.
  • The possession certificate possessed by the owner of the property also enables him to defend his property from any form of unlawful actions, fraud, or misappropriations.
  • The possession certificate also has the power to shield the owner of the property during any form of litigation that might arise.
  • The possession certificate grants the buyer the absolute right over the property as he will be able to carry out any activities according to his choice.

What is a Conditional Possession Letter?

The buyers may in some cases take over the possession of the property without being satisfied. The dissatisfaction can be due to various factors such as poor construction quality, faulty construction, usage of a different material than promised, pending repair work, delay in offering completion certificate, etc. In such circumstances, the buyer of the property may take up the possession of the property based on a conditional possession letter. He may then give the feedback and the changes required in the property by the prior agreement.

The conditional possession letter puts the buyer in a position wherein he can compel the owner to make the required changes. The buyers may also mention in this document the compensation that would be due from the builder’s end in cases of delay in completion of the condition and delivery of the property as promised. They can also file a legal suit in extreme cases of non-performance of the contract.

What is the importance of a possession letter?

  • The possession certificate is also required at the time of sale of the property.
  • It is a very important requisite while applying for a home loan.
  • The possession certificate is an important document that is required to avail of the various tax benefits.
  • The possession of the property without the possession certificate is illegal and the local government has the authority to take action in cases of the absence of the certificate.
  • You may be required to produce the possession certificate for obtaining the Khata certificate.

Occupancy Certificate vs possession certificate

A possession certificate or letter is an important document that the seller has to present before the buyer regarding the date of possession. This is been issued by the Tahsildar in the rural areas and RDO in the urban areas. A possession letter won’t affirm one as the rightful owner of the property. You will have to provide an occupancy certificate stating the above requirements. In fact, the possession certificate states the property completion date whereas the occupancy certificate that is been issued by the local authorities stating that the completed project is fit for occupancy.

Conclusion

Summing up, it is to be stated that ownership and possession are two different concepts under its legal definitions. The owner of the property may or may not have the property. Despite the possession of the property, the owner is entitled to use the property or even dispose of the property according to his choice. The person with possession can only claim the physical control of the property and also use the property according to his discretion.

The possession certificate is an important document as it confers the holders with various rights and also entitles them to other benefits such as home loans, tax benefits, etc. there are certain circumstances in which the buyer is not satisfied with the construction works so provided and obtains conditional possession certificate.