Most real estate buyers often buy real estate property without realizing the necessary documents required. Buyers and owners must be aware of the documents required to complete the transaction.

Documents such as Occupancy Certificate (OC) and Possession Certificate (PC) must be obtained before buying a house. Possession must be taken only after the issuance of the occupation certificate. Occupancy Certificate examines and certifies a property for adherence to bylaws, civic amenities, electricity, sanitation, and other clearances. On the other hand, the Possession Certificate is a document that ensures that the buyer now holds all the rights to the property and a transfer of the title to the property has occurred positively.

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Possession Certificate

A possession certificate is a document which states that the property has been possessed without any illegal means. It transfers the possession of the property’s custody from the first owner/developer to the buyer; signifying that the property and the property’s interest have now been transferred to the buyer on payment. The Possession certificate shall be written and authentic along with explicit mention of the date of transfer of possession.

A possession certificate indicates the change in possession of the property and is issued by the buyer. The certificate should clearly state that the possession of the property is being transferred to the buyer. This ensures the full interest of the buyer over the property. Both the parties must sign up on the same, i.e. the builder must sign overstating that the possession does not lie with him any longer, and the buyer must sign to taking over the possession of the property. The Certificate contains a description of the property with a detailed description of all the accessible amenities that come with the property.

A possession certificate can be obtained online as well as through offline methods. The online process of applying for a possession certificate is simple and easy. The person has to go to the official website and fill in the required details, upload the relevant information, and pay the required fees.

The offline method of obtaining a possession certificate involves the applicant to apply to the designated official in the office of the concerned Deputy Secretary Once the application has been verified, the applicant will get a notification stating the possession certificate collection. After collecting the certificate, the applicant has to sign in a register confirming the certificate’s receipt. The processing of the application takes seven working days from the date of application.

Importance of possession certificate

The possession certificate is necessary as it ensures that the property’s possession has been transferred and that the buyer now holds the property’s rights. However, only a possession certificate will not make the buyer a legal owner of the property. Proper transfer of possession cannot be made without the possession certificate and the buyer has no right to reside or use the property for any purpose. Lack of possession certificate ensures that the property is still in possession of the seller/builder.

The buyer is not residing there legally and can be asked to vacate the property by the local civil authorities’ property. Without the proper certificate, the property’s interests the buyer cannot exercise his rights as a possession has not been transferred in its true sense. The buyer has no right to reside or use the property for any person. The possession certificate should be obtained by the buyer at the time of signing the sale deed.

What if a person does not have a possession certificate?

Without the proper certification, the interests in the property cannot be exercised by the buyer as there has been no proper transfer of possession and the buyer has no right to reside or use the property for any purpose. The absence of the possession certificate indicates that the property is in the legal possession of the builder and that the buyer of the property has not been legally residing in the building. The authorities can also ask the buyer to vacate the house in the absence of a possession certificate.

How to obtain a possession certificate?

The possession certificate is issued by the local civil authorities within a period of 30 days if the construction works of the building have been carried out in accordance with the accepted plans, design norms, and fire safety requirements, as well as the certificate of completion. The laws applicable to the issuance of the possession certificate depends on the local laws and regulation and it is important to ensure that you know and comply to the same.

The law applicable varies largely from one state to another and hence is important to know about the local regulations for possessing a certificate.

To obtain the Possession Certificate, one should produce the following documents.

  • Copy of sale deed agreement
  • Identification and signature proof of the applicant
  • Certificate of encumbrance
  • Copy of registered sale agreement

Occupancy Certificate

An Occupancy Certificate is a document issued by the statutory authority (BBMP and BDA in Bangalore, PMC in Pune) to the builder after the project’s completion. It is required for commercial buildings and residential buildings having more than five units. It is not mandatory to obtain an occupancy certificate for an independent house.

The local municipal authorities or building proposal department issue the occupancy certificate, that provides a no objection to occupy the building under reference for its specific use. The certificate is only issued after the completion of construction. Basic amenities must be readily accessible to the occupants.

Certain State laws make it mandatory to obtain an OC. As per state laws, a person cannot legally move into a building unless the developer/builder gets an occupancy certificate from the respective local administrative or civic bodies. The corporation or municipality can ask the apartment owners to leave such illegally occupied flats or impose heavy penalties in ‘regularization.’

An occupancy certificate is required while buying or selling property. It is necessary to apply for water, sanitation, and electricity connections for the property.

An occupancy certificate can be obtained either through an online application or an offline application. The online process of applying for an occupancy certificate is simple and easy. The user (builder/developer) has to go to the official website and fill in the required details, upload the relevant documents, and pay the necessary fees. The online application for an occupancy certificate takes 15 days from the date of application for the certificate.

The offline method involves the applicant applying a prescribed format and the necessary documents to the municipal commissioner. After submitting the forms, the authorities will inspect the property and confirm if the property has been constructed according to the approved building plan before issuing an occupancy certificate. The offline method takes 30 days from the date of application to obtain an occupancy certificate.

Importance of occupancy certificate

An occupancy certificate certifies that the construction of the building has complied with the approved plans. Without an occupancy certificate, the building is not awarded a ‘pass certificate.’ Without the occupancy certificate, the building is considered to be technically unfit for occupation.

Hence, if any accident occurs, the occupants/users of the building can hold no one liable and would not be eligible for any insurance or compensation claims. Water, sanitary, and electricity connections, if already obtained, are susceptible to get disconnected. The legal possession of the flat by the owner is valid only with the occupancy certificate.

What if a person does not have an occupancy certificate?

The occupancy certificate is issued by the local municipal authorities or building proposal department that provides a no objection to occupy the building under reference for its specific use. The certificate is only issued when the property has been completed in all respects and can be occupied by residents. The property has to be ready to provide basic amenities to the residents.

  • Without a valid OC, the occupancy is illegal as it can be classified as an unauthorized structure by the authorities.
  • OC is crucial while applying for a home loan or loan to purchase a resale flat. Sellers cannot sell their property without a valid OC in hand.
  • Key amenities like water, sewage connection, electric supply, etc, can be disconnected in case the OC is not present.

How to obtain an occupancy certificate?

After the construction of a building is completed, the builder or the buyer has to submit an OC application form to the concerned municipal or local development authority. The application form for obtaining OC should be submitted within 30 days of completing the construction.
Along with the application, the following documents should be submitted for processing the application:

  • Commencement certificate
  • Completion certificate
  • Built plan along with elevation, site, and section plan
  • No objection certificate from fire force
  • Area calculation sheet of floor signed by an architect
  • Tax assessment with tax paid receipt
  • Photographs of completed building
  • Photographs of rainwater harvesting and solar panels
  • Copy of the sanctioned plan

The authorities will then conduct a physical inspection of the building and will evaluate if the building is constructed according to the approved plan and then, issue the certificate. If there are deviations up to 5% from the approved plan, a fine will be levied based on the extent of the deviation. The OC will be issued after the fee is paid.