What is an Occupancy Certificate (OC) ?

What is an Occupancy Certificate?

Purchasing a new property or building a home is a considerable investment. Therefore, when you buy a new construction property, make sure it observes safety regulations and receives the necessary approvals. An occupancy certificate, also called a building occupation certificate or OC, will help you confirm that your new home and your investment are safe.

This article explores occupancy certificates' meaning, significance, and the processes for obtaining them.

What is an occupancy certificate?

This is a legal document issued by the local municipal government. It certifies the new constructed building is in compliance with approved plans and construction standards. Simply, occupancy certificate is the formal go-ahead from the government that conveys that the building is fit for habitation and has all the facilities needed for safe living.

When is an Occupancy Certificate OC Issued?

Before granting an occupancy certificate, the relevant authority performs a comprehensive inspection to verify several criteria:

• Conformity with legal and approved construction plans
• Compliance with building codes and regulations
• Availability of essential amenities, such as drainage and electricity
• Acquisition of all necessary clearances, including those from the fire department

After these conditions are met, the OC is typically issued within a month. To check an Occupancy Certificate online in India, follow these general steps:

• Visit the official website of the local municipal authority where the property is located.
• Navigate to the "Building Permission" or "Building Proposals" section.
• Select "Occupancy Certificate" or "OC" from the list of services.
• Enter the required property details, such as address and application number.
• Submit the information to view the results.

If available, download the OC directly from the website. Otherwise, you may need to visit the local municipal corporation office to obtain a copy.

Importance of Occupancy Certificates (OC)

Some key benefits are as follows:

• Legality and Safety
  
  An OC establishes the legal validity of a building, confirming its compliance with the sanctioned plan and local regulations. This protects homebuyers from purchasing properties built without proper authorization, potentially facing legal repercussions.
• Peace of Mind
  
  Having an OC provides property owners immense peace of mind. It signifies a legal and safe dwelling for their families. Additionally, it eliminates the worry of legal disputes or eviction due to non-compliance with building codes.
• Essential Services
  
  An OC is a prerequisite for obtaining essential utilities like water supply and electricity connections. Without this document, securing these basic amenities becomes an uphill battle for residents.
• Property Valuation and Resale
  
  A property with a valid OC has a higher market value than one without. An OC streamlines the resale process and attracts buyers who prioritize legal and secure property.
• Home Loan Approval
  
  An OC is a document required by banks and other financial organizations to approve house loans. It reduces the chance of financing an unlawful building and guarantees the property's legal status.
• Transparent Real Estate Transactions
  
  The mandatory requirement of an OC promotes transparent real estate transactions. Verifying the property’s safety and legality allows purchasers to make educated judgments.
• Accountability for Developers
  
  The developer is responsible for obtaining the OC. This process holds developers accountable for adhering to approved plans and building codes that promote ethical practices in the construction industry.

The building occupation certificate goes a long way to protect the rights of developers as well as property owners. It makes a simple property acquisition possible.

Documents Required to Obtain an Occupancy Certificate

You need to submit documents to obtain an occupancy certificate from the local municipal authority, such as:

• Project Commencement Certificate
  
  This document proves that the construction project received the necessary approvals to commence construction.
• Building’s Sanctioned Plan
  
  A copy of the approved building plan outlining the structure’s layout, specifications, and dimensions is mandatory.
• NOCs from Different Departments
  
  No-objection certificates (NOCs) from the pollution control board and fire department verify conformance with environmental standards and fire safety laws.
• Architect-Approved Area Computation Sheet
  
  This document, prepared by a licensed architect, details the calculated built-up area of the building.
• Photographs of the Building
  
  Clear and recent photographs showcasing the completed building structure are required.
• Photographs of Various System
  
  If the building incorporates eco-friendly features, photographs of solar panels and rainwater harvesting system installations are necessary.
• Project Completion Certificate
  
  This document signifies the formal completion of the construction project as per the approved plans.
• Property Tax Bills
  
  The local authorities require up-to-date property tax receipts.

Different paperwork is required depending on the relevant authorities and local rules. Consult a real estate agent or the local government for accurate information on the necessary paperwork.

Who Should Apply for the Occupancy Certificate?

The property developer bears the primary obligation to secure the occupancy certificate. The developer ensures that all relevant rules are followed and the project’s development follows approved blueprints. Once the building is finished and satisfies the necessary requirements, the developer applies to the local body for a building OC certificate.

Nonetheless, there may be circumstances in which the burden of duty slightly changes. When building a huge project in stages, the developer may decide to get a certificate of partial occupancy for each finished stage. The completed parts permit people to move into their apartments and get basic utilities like power and water connections. In such scenarios, while the overall project falls under the developer's responsibility, partial occupancy certificates would be issued for the specific phases ready for occupation.

Property owners do not directly apply for the occupancy certificate. They inquire about its status from the developer and obtain it before taking possession of the property.

What Can Be Done if the Developer Does Not Give an OC?

In the unfortunate event that a developer fails to obtain or provide the building OC certificate, homeowners have recourse to several options:

• Verify Through the RERA Portal
  
  If the new construction is registered under the Real Estate (Regulation and Development) Act (RERA), the details on the certificate of occupancy can be found on the official website. Use the portal to verify its authenticity.
• Contact Municipal Body
  
  In the event that homeowners are unable to obtain information from the RERA site, they may speak with the local municipal body in charge of providing the certificate of occupancy directly. They can get an update on the procedure and find out why there has been a delay.
• Lodge a Complaint with the Consumer Forum
  
  If the certificate of occupancy is not available due to the carelessness or inaction of the developers, homeowners can complain to the consumer forum. The respective authority will step in and direct the developer to get the required certifications.
• Register a Complaint with RERA
  
  For projects registered under RERA, homeowners can file a formal complaint with the state's RERA authority. If the developer violates any rules about the certificate of occupancy, RERA has the authority to investigate and fine them.

Consult with a legal professional when facing such situations. A lawyer can guide the most appropriate course of action based on the specific circumstances and local legal framework.

What is a Partial Occupancy Certificate?

Construction of large-scale projects (those with several towers or phases) occurs in stages. Developers may decide to file for certifications of partial occupancy in such circumstances. A partial occupancy certificate certifies only a particular portion or stage of the project is finished and satisfies the necessary requirements. It enables people living in the completed area to move in and make use of necessities like power and water connections.

The following is a summary of the important considerations for partial occupancy certificates:

• Eligibility
  
  Partial OCs are issued for large-scale projects with distinct phases of construction. For smaller, single-phase projects, a single OC is issued upon completion of the entire structure.
• Benefits
  
  Partial OC has several advantages. It allows residents in completed sections to move in and begin utilizing their units sooner, which can be particularly helpful when there might be delays in completing the entire project. It also enables developers to receive payments and generate revenue from the completed sections.
• Limitations
  
  A partial OC doesn’t signify the completion of the entire project. It is possible that residents will not have easy access to amenities or facilities that are part of the overall plan but have not yet been built in the specific phase with the partial certificate.

Can a Homebuyer Occupy a Property Without an Occupancy Certificate?

Staying on a property without a valid occupancy certificate is not only against the law but also has several risks, such as:

• Legal Concerns
  
  Residing in a building without an occupancy permit is considered illegal. If the local authorities discover such a situation, they can take legal action, including eviction.
• Lack of Essential Services
  
  OCs are a prerequisite for obtaining essential water and electricity connections. Without the certificate, securing these amenities becomes challenging, creating significant inconvenience for residents.
• Difficulties in Resale
  
  Properties without OC are significantly less marketable. Buyers are unlikely to invest in a property with legal uncertainties and the possibility of service disruptions.
• Safety Concerns
  
  When there is no OC, the building hasn’t undergone the necessary building inspections for safety compliance. It poses risks to the residents' well-being in several ways.
• Structural Problems
  
  Without appropriate building inspections and certifications, structural problems can occur. This may cause roof leaks, wall fissures, or, in the worst situations, building collapses.
• Fire Safety Hazards
  
  It's possible that buildings lacking OCs haven't had comprehensive fire safety assessments. This raises the possibility of fires starting because of bad wiring, insufficient fire escapes, or inappropriate fire safety gear.
• Health Risks
  
  Significant health concerns can be posed to inhabitants by improper building techniques or the lack of basic facilities like waste disposal systems and sufficient cleanliness. This may result in the polluting of water supplies, the spread of illnesses, or other health issues.
• Environmental Issues
  
  The environment and the health of the occupants of buildings built without following environmental rules may suffer from problems with waste management, pollution control, or sustainable practices.

The absence of an occupancy certificate is a red flag to be addressed by homebuyers. To prioritize safety and legal compliance, make sure the developer obtains the necessary certificate before moving into the property.

What is the Difference Between CC, OC, and Possession Certificate?

Property buyers may find it difficult to understand the differences between a possession certificate, an occupancy certificate, and a completion certificate. This table summarizes the main distinctions between these three important documents:

Additional Points to Consider:

• A completion certificate signifies the physical completion of the construction project as per the approved plans. It’s a milestone achieved by the developer and doesn't directly grant permission for residents to occupy the building.
• The occupation certificate is a crucial bridge between the completion and possession certificates. It confirms that the completed structure adheres to safety regulations and is suitable for habitation. Once the certificate of occupancy is obtained, residents can legally occupy the building and begin receiving essential services.
• The developer issues the Possession Certificate and grants legal possession of the specific unit purchased by the homeowner. It allows them to move in and begin utilizing their space. However, receiving a possession certificate hinges on a valid certificate of occupancy.

These three residential certificates work in a sequence. The completion certificate signifies the physical construction is finished, the certificate of occupancy confirms its compliance with regulations, and the possession certificate grants the homeowner legal access to the specific unit.

Conclusion

An occupancy certificate confirms a smooth and secure property purchase. It guarantees the building’s legality, safety, and eligibility for essential utilities. Understanding its significance empowers homebuyers to make decisions and safeguard their interests throughout the property transaction process. By demanding an OC before possession, homebuyers can invest in a legal and secure dwelling for themselves and their families.

FAQs

1. What is meant by a completion certificate & occupancy certificate in real estate?

A Certificate of Completion certifies that a building's construction has been finished according to approved plans and complies with all building regulations. Issued by local municipal authorities, it confirms that the building is structurally sound and adheres to safety standards, and is required to obtain an Occupancy Certificate (OC).

An OC is a legal document from local authorities indicating that the building is safe and suitable for habitation. It is mandatory for legal occupancy, increases the property's resale value, and is essential for availing home loans and utilities.

2. Is it okay to purchase a house without an occupancy certificate?

You should not buy a home without an occupancy certificate because:

• Occupying a property without an OC is illegal and can lead to eviction or demolition
• The absence of an OC may be due to the building not complying with safety regulations, which poses risks to the safety of the occupants
• Selling a property without an OC is difficult and may impact its resale value
• Essential electricity and water connections might be denied without an OC

3. What is the difference between a completion certificate and an occupancy certificate?

While both Completion Certificates (CC) and Occupancy Certificates (OC) are crucial documents in real estate, they serve distinct purposes. The scope of a CC covers the entire project, ensuring construction completion and adherence to approved plans, whereas an OC focuses on the building's suitability for habitation and compliance with safety standards. Issued by the local municipal authority, a CC is obtained first, signifying project completion. Following this, the OC is issued, indicating the building's readiness for safe occupancy.

4. Can I sell my property, which does not have an Occupation Certificate?

Selling a property without an OC is difficult and discouraged due to the legal and safety concerns involved. Buyers may hesitate to purchase such a property, and resale value might be significantly impacted.

5. Who will issue the Occupation Certificate?

The local municipal authority responsible for building approvals and inspections issues the Occupation Certificate.

6. Can a developer/builder issue a partial Occupation Certificate?

Yes, for large projects constructed in phases, developers can obtain partial Occupation Certificates for completed buildings. This allows residents to move into their units while other phases are still under construction.

7. What are the steps to get an occupancy certificate?

The developer is responsible for obtaining the Occupation Certificate. The process involves:

• Completing the construction project
• Applying for the OC with the local municipal authority
• Submitting required documents, like CCs, NOCs for fire and pollution, and property tax receipts
• Inspection to verify compliance with safety regulations and building codes
• Receiving the Occupation Certificate within 30 days upon satisfactory inspection