An occupancy certificate (OC) is a mandatory document to obtain when purchasing a new house.
Occupancy certificates are obtained from the local government agencies and authorities. It confirms that the building was built according to the specifications authorised by the appropriate agencies, and built-in compliance with local laws.
When a property is ready to be occupied, an occupancy certificate is issued. This certificate certifies that the structure meets basic municipal requirements such as sewage, water, and power.
An Occupancy certificate is an extremely significant document, and a potential apartment buyer should insist on seeing it before taking over the house from the builder.
What is the significance of a certificate of occupancy?
If the builder is unable to get this certificate from the relevant department, it is likely that the building lacks civic amenities and was not erected following the plans approved by the relevant agencies.
An occupancy certificate (OC) is issued by a municipal authority or planning body once a new project is completed. The occupancy certificate validates that the project was constructed following the appropriate building codes, regulations, and laws.
Who is responsible to obtain the occupancy certificate?
Once the project is finished, the developer is responsible for obtaining an occupancy certificate. The certificate certifies that the structure is fit for human habitation. When applying for water, sanitation, or electrical connections, an OC is necessary.
What are the legal implications of possession without an occupancy certificate?
An OC is required for house owners to secure the legal status of their property. The local municipal council has the power to take legal action if a property does not have a valid OC because a project without an OC is considered an unlawful building. If you are applying for a house loan or buying a resale property, you will need an OC. When you want to sell your home, you’ll also need a valid OC.
It is illegal to offer a possession without an OC. You will not be the rightful owner of the property if you take over the house without an OC. An OC is a safety feature that reassures you that the building has been erected as per the authorised designs, fire safety regulations, and construction standards.
Can the authorities refuse to give an OC?
If the structure was built illegally, the Occupancy Certificate may be denied. Poor fire safety, insufficient leisure and open areas, and unfollowed plans are all reasons for the local authorities to reject the OC.
It’s a serious concern if a property does not get the OC after completion. Such structures may be liable to blatant violations, making them unfit for OC. For example, if the contractor does not develop as per the permitted plan, his building may be rejected.
What are the Legal Consequences if a Homebuyer Occupies a Flat Without an Occupancy Certificate?
A homebuyer who proceeds to occupy his unit in a project without an OC violates Section 353A of the MCGM Act, 1888, and faces a punishment of up to Rs. 2,500. While the fee appears to be insignificant, it has a significant influence on the flat’s market value. People are hesitant to invest in such enterprises with an ambiguous future.
The refusal of OC has several consequences on a flat’s market value. Banks decline house loans for resale, ready-to-move-in residences that lack OC. Mortgages would be difficult to get because they are subject to destruction at any time. Furthermore, if a structure is denied OC, it may take years of prolonged litigation until a remedy is found.