Terms of legal occupation

Amarpal Jakhar

Rahul Sharma was happy when he got the possession letter from his builder after a painful delay of eight years. He was prompt in paying the outstanding amount. The builder gave him possession and keys and he immediately shifted into the house because paying the EMIs as well as rent was a huge burden for him.

His happiness, however, was short-lived as just a few months later he got to know from one of his acquaintances that possession without Occupancy Certificate (OC) taken by the builder is illegal. When he enquired about his building, he was shocked to know, that the OC had not been taken by his builder. To make matters worse the builder had violated some other construction norms too, and because of all this the residents may have to vacate the building.

The above stated instance brings a grave issue to light. Many buyers continue to occupy apartments without an OC, which can jeopardize the legal status of their property and an eviction notice may be served to them. The Real Estate (Regulation and Development) Act, 2016 (RERA) has prescribed various conditions and requirements that need to be taken into consideration while buying/selling property. An OC is one such requirement, which is a pre-requisite for occupying any property. As a buyer, do not ignore the importance of an OC, as it secures the legal status of your property. Here's why occupancy certificate is important for you.

Occupancy Certificate decoded

Occupancy Certificate is a legal document that certifies that the construction is in compliance with the approved building plans and that the building is fit to be occupied. It is issued by the local planning authority or prescribed State Development authority. The OC is issued only after verification of adherence to Building Regulations, Safety Regulations, provision for utilities etc.

Without this document, your building has no legal sanction for occupancy. An OC is required, when applying for water, sanitation and electricity connections.

Occupancy Certificate gains significance because it is a document which evidences the completeness of all installations and approvals required for a building to be habitable.

For buying a property, an OC is necessary to cement the legal status of the property that buyers are going to own. In the absence of a valid OC for a property, the local municipal body has the right to initiate legal action against them, because without an OC, a project is deemed an unauthorised structure.

An OC is also required when you apply for a home loan, or if you are purchasing or selling a property.

Risks of not having an OC

n Without a valid OC your building can be demolished as it can be classified as an unauthorised structure by the authorities.

n OC is crucial while applying for a home loan or loan to purchase a resale flat. You cannot even sell your property without a valid OC in hand.

n The registry of flat may be denied due to the non-availability of OC.

n Key amenities like water, sewage connection, electric supply, etc., can be disconnected in case you do not have an OC.

n Thus, without occupancy certificate the possession of a flat is not a lawful possession, and it is equivalent to a rented home from where one can be evacuated anytime by the State Authority.

How to obtain the certificate?

To obtain the certificate, a builder needs to fill an occupancy certificate application form along with a few other documents like project commencement certificate, project completion certificate, NOCs for fire & pollution, latest property tax receipt, a copy of the building’s sanctioned plan.

After submission of this form, the municipal authorities inspect the building and confirm if it has conformed to the approved plan before issuing an OC.

Legally, a builder or owner should apply with the commissioner for the OC within the prescribed time of completion of the building/property. The commissioner also replies to the applicant within a prescribed time whether the application has been accepted or rejected.

The regulations related to issuance of OC differ from state to state. It is wise to get the OC before moving into a flat or signing the agreement.

Risks of not having an OC

• Without a valid OC your building can be demolished as it can be classified as an unauthorised structure by the authorities. 
• OC is crucial while applying for a home loan or loan to purchase a resale flat. You cannot even sell your property without a valid OC in hand. 
• The registry of flat may be denied due to the non-availability of OC.
• Key amenities like water, sewage connection, electric supply, etc., can be disconnected in case you do not have an OC. 
• Thus, without occupancy certificate the possession of a flat is not a lawful possession, and it is equivalent to a rented home from where one can be evacuated anytime by the State Authority. 

— The writer is founder & director Centrik Business Solutions