Occupancy Certificate, Possession Certificate & Completion Certificate – Meaning & Importance

Do you own a Flat in an Apartment / high rise building? (Or) Have you booked a Flat which is under Construction? Then you need to know the importance of documents like Completion Certificate (CC) and Occupancy Certificate (OC). Occupancy Certificate is also known as Possession Certificate (PC).

As these certificates are not required while registering a property, most of the home buyers tend to overlook or ignore collecting these documents from their previous owners or builders of the apartment.

I can confidently say that there are thousands of apartments in cities like Bengaluru, Mumbai or Delhi which have been occupied without any Occupancy Certificates. In many of the cases, the building plans of these apartments are approved but they do not get OCs due to not sticking to the approved building plan or due to other violations.

Obtaining Occupancy Certificate and Completion certificate can be mandatory under respective State laws.  As per these state laws, one cannot legally move into a building unless the developer 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 the name of ‘regularization’.

In this post let us understand – What is Building Completion Certificate? What is Occupancy Certificate or Possession certificate? What is the difference between Occupancy Certificate & Completion Certificate? What is the importance of these documents? How to get Occupancy Certificate?

What is Building Completion Certificate (BCC)?

Upon the completion of the building construction, the builder or the developer of the apartment has to apply for the ‘building completion certificate’ with the local authorities (like BDA or BBMP in Bangalore or PMC in Pune).

If the building construction is completed as per the building approval plan and if it also meets other building standards like distance from road, height of the building, if rain water harvesting system is in place etc., the civic authorities will issue CC.

BCC looks like as the one in the below image; (Pic courtesy : apartmentadda.com)

What is Occupancy Certificate or Possession Certificate?

Once the builder receives the Completion Certificate, they have to obtain Occupation Certificate from the civic bodies.

OC certifies that the building has complied with all the required building standards, local laws and it is safe to occupy. Occupancy certificate is issued by local municipal authorities or building proposal department that provides no objection to occupy the building under reference for its specified use. The OC is issued only once the building has been completed in all respects and can be occupied.

The legal possession of the Flat by the Owner is valid only with the Occupancy Certificate.

So, the main difference between Completion certificate & Occupancy Certificate is that CC shows that the building construction is done as per the plan which was approved by the concerned authorities. And after getting this, occupancy certificate will be given to all buyers so that they can take possession of their Flats / properties.

Important points on Completion Certificate & Occupancy Certificate

• Who can apply for BCC or CC ? – Builder has to apply for CC.
• Who will issue BCC? – Local civic bodies will issue BCC.
• Who can apply for OC? – The builder has to obtain OC. However, the Flat owner can also apply for OC. If you have already occupied your FLAT without OC, you can approach the Local Corporation or municipality and apply for OC. If the building has been constructed as per the approved plans, building standards, fire safety standards and if it also has BCC then you can get OC in 30 days (legally). However, the law says that if the building has been constructed without any plans it cannot be regularized (if there are structural deviations) and OC may not be issued in such cases.
• How to get Occupancy Certificate or Possession Certificate? – You may have to submit below documents along with the application form;
  • Copy of building sanction plan (building plan approval copy).
  • Building Commencement Certificate.
  • Copy of Building Completion Certificate.
  • Latest Property Tax receipt
  • Copies of No Objection Certificates (NOCs) of pollution board or Airport authority etc.,
• Who will issue OC? – Local civic bodies will issue OC.
• Kindly note that buildings which have deviations beyond legally allowed limits can be treated as illegal constructions. The local civic bodies may not issue Occupation Certificate in these cases.
• Why CC or OC are important? Is it safe to buy a flat without OC/CC?
  • To claim Income Tax benefits on your home loan, your employer may ask you to submit Occupancy Certificate along with the home loan statement.
  • Occupying a property without an OC is considered as illegal and local civic bodies can ask you to vacate the property.
  • You may have to face trouble in getting water connection or sanitary connection or electricity supply connection.
  • Most of the financial institutions may insist on Possession Certificate to sanction home loans.
  • You may find it very difficult to find a buyer in case if you wish to sell your Flat in the future.
  • Without an OC, it may be very difficult to obtain Khata Certificate.
• Can Builders issue Partial Occupancy Certificate? – When there are blocks or phases of large projects to be developed with varying completion dates, the concerned authority can grant a partial occupancy certificate for the completed phases/blocks. After the completion of entire project, Partial OCs are replaced by final OC (Consolidated document). Do note that it can be a tough task to get a home loan with a Partial OC.
• If your builder is not obtaining OC, you can issue a notice to him to apply and handover the required documents. Failing which, you can also approach a consumer forum or can file a writ petition.
• Do note that obtaining Occupancy certificate for an independent house (row house) is not mandatory.
• A builder can get a provisional building completion certificate from local authorities. But do note that this is valid for six months only. He has to obtain final building completion certificate.

Most of the errant builders may have good connections and they may easily escape through various loop holes in the law. So, end of the day it’s the home buyers who end up suffering for no fault of theirs.

Be extra cautious when you are buying Flats (even if the builders are reputed ones). Check out the Building Commencement Certificate. Also, do insist on obtaining Completion Certificate and Occupancy Certificate (Possession Certificate) from your builder or owner. If these documents are not available with the seller or builder then there is every possibility that the building may not be constructed as per the approved plan or local building standards.

If you are a new flat owner, insist on an Occupancy Certificate from your builder before you occupy the property. If you have already occupied the property, get your OC at the earliest. You may check with other Flat owners and can apply for OC as a group or through your Residents’ Welfare Association.

I believe that Occupancy Certificate should be made mandatory for the registration of Flats. It can also be made mandatory for getting water, sanitary and electrical connections. This can make a huge difference to buyers of Flats. All that is needed is Political Will.

I hope you find this post informative. Kindly share your views on this topic.

(Image courtesy of stockimages at FreeDigitalPhotos.net)