After years of searching, you finally have bought that home. You are excited. You are thrilled. You can’t wait to start thinking about decorating the interiors and throwing a party! But wait. The excitement of living in your new home can be marred in and turn into a nightmarish experience if you don’t pay attention to the documents you absolutely must acquire before moving into your property.
The most critical among these is the possession letter and occupancy certificate. While first-time homebuyers often tend to use the terms interchangeably, a detailed look at these will certainly help you understand the importance of both.
Possession letter
Issued by the developer in the buyer’s name, a possession letter explicitly mentions the date of possession of the property. While this letter is a mandatory requirement when one applies for a home loan, one cannot claim ownership or legal possession of a property without another significant document. This is where the occupancy certificate comes in.
Occupancy certificate
The certificate of occupancy or the completion certificate is one of the most crucial documents a homeowner must possess. Once a builder completes a project, she/he is issued an occupancy certificate by the local town planning authority. The certificate is not only a proof of the project’s completion but, it also implies that the development respects the construction guidelines of the area and meets the safety standards that make it habitable for human beings. Akin to the Matriculation pass certificate a student receives on completing school, a project is said to have been ‘passed’ by the local authorities once a builder receives the certificate. A builder needs to submit the following documents to avail a Certificate of Occupancy:
- Copy of building sanction plan
- Building commencement certificate
- Copy of building completion certificate
- Latest property tax receipt
- Copies of No Objection Certificates (NOCs) from the Pollution Board or Airport Authority
This document is paramount when applying for water, sanitation, electricity connection or a bank loan for your new home. The certificate also comes into play when you ask for Khata (a revenue document for the payment of property tax). It also has the power to affect your future dealings. If you ever plan to sell your house and the occupancy certificate is missing, then the resale value will be far below the market rate!
Moving into a house without the occupancy certificate is illegal, and your builder insists upon providing you with this critical legal document later, then it could very well be a red flag. If the building hasn’t been constructed according to local standards, then the builder might not have any intention of issuing the certificate. Once you move in, municipal authorities can discontinue their services at any time, if any fault in the construction comes to their notice, leaving you hapless in the absence of the occupancy certificate.
As a vigilant buyer, it’s better to know your rights in advance than be sorry later. Be prepared to refuse ownership or file a case if your builder fails to give you a valid occupancy certificate.
