Importance of Occupancy Certificate while buying property


After the implementation of Real Estate (Regulation and Development) Act, 2016, there are many factors which needs to be taken into consideration while buying the property, but in addition to the factors under RERA, the Occupation Certificate still has very pertinent role when you are going to park your funds in the property purchase.

Let’s take an example, Rahul Sharma was a happy buyer when he got the possession letter from his builder after the inordinate delay of eight years. He was prompt in paying the outstanding amount as he had patiently waited for so many years for his dream home.

The builder gave him the keys and assured him that the Occupancy Certificate (OC) can be obtained in a few months. However, he was not aware of the implications; therefore, he immediately shifted into the house because paying the EMIs as well as rent was a huge burden on his monthly income.

However, his happiness was short-lived. After one year, he got to know from one of his acquaintance that “Possession without OC is illegal.”

In the view of the above, these days 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. As a buyer, do not ignore the importance of an OC, as it secures the legal status of your property. Let us know occupancy certificate and its importance for you.

What is an occupancy certificate?

This legal document certifies that the construction is in compliance with the approved building plans.

It is issued by the local municipal authorities after the construction is complete and the property is ready to be occupied. Without this document, your building has no legal sanction for occupancy.

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

Risk without OC

Without a valid OC, your building can be demolished 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. You cannot even sell your property without a valid OC in hand.

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

Thus, pursuant to the above, it can be inferred that without occupancy certificate possession of flat is not a lawful possession and it is equivalent to a rented home which can be evacuated anytime by the discretion of State Authority. Therefore, the buyer ensures himself by taking the occupancy certificate before occupying the possession.

Disclaimer – Please note that the above articles is based on the interpretation of related laws and judicial pronouncement which may differ from person to person. The reader are expected to take the expert opinion on the matter.

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