Real Estate Term: Significance of Occupancy Certificate

An Occupancy Certificate is a mandatory document issued by the local authority on the completion of a project. This certificate is legal proof that the building has been constructed as per the building rules. 

Let us delve deep into why this certificate is an essential document required during the home buying process:

Why the Occupancy Certificate is mandatory? 

It is legal proof of the completion of a project as per the approved plans, without which the builder cannot hand over the possession of the project. This certificate implies that the building has appropriate infrastructure like water, electricity, etc. If the building does not have an Occupancy Certificate it can be demolished at any time considering it to be an unauthorized structure.

Occupancy Certificate is an essential document when applying for a home loan as banks ask for this document before sanctioning the loan.

How to obtain an OC?

To obtain the Occupancy Certificate the builder is required to apply for the certificate within 30 days of the project completion. Once the project has fulfilled all the criteria as per the laws, it will become liable to receive the copy of the certificate within 30 days from the submission of application. Buildings without the Occupancy Certificate will have to bear the burden of the property tax. Moreover, this document is also crucial when buying a resale property.

Here are some of the essential documents that must be submitted to acquire the Occupancy Certificate:

• Commencement Certificate
• Completion Certificate
• The latest property tax receipt
• Copy of the building sanctioned plan

What if the developer refuses to provide the Occupancy Certificate? 

The buyer can take legal action if the developer refuses to provide the Occupancy Certificate. As per the RERA rules, it is mandatory for the developer to offer the possession of the project once it has acquired the Occupancy Certificate.

Make sure you receive the original copy of the Occupancy Certificate and not the fake copy of the certificate as it is needed at the time of applying for a home loan or when reselling your property. 

What is Partial Occupancy Certificate?

Partial Occupancy Certificate is issued to projects that are developed in different phases. To obtain this certificate the builder has to apply within 30 days from the completion of the project. On the completion of a particular project, the concerned authority after inspection and scrutinizing the documents grants the Partial Occupancy Certificate. After the completion of all the phases, the Partial Occupancy Certificate is replaced with the Occupancy Certificate.  

What happens if you buy a flat without an Occupancy Certificate?

• If you buy a flat without the OC then the local authority can initiate serious action against you.
• Water and electricity connection can be disconnected in the absence of Occupancy Certificate
• Your building can be demolished anytime by the concerned authority in the absence of an Occupancy Certificate.

With the implementation of RERA rules, the real estate sector has become more structured that has brought greater transparency. However, as a buyer one must be aware of the essential documents required during the time of property registration for a hassle-free home buying process.