What is OC (Occupancy Certificate) in Real Estate – and Why is it Necessary
OC Full Form is Occupancy Certificate.
Occupancy certificate is considered an important document when it comes to buying a new home as it ensures that the property is constructed as per the prescribed laws. Let’s have a look why it is necessary to obtain the occupancy certificate these days.
A legal document issued by the government agency or the local development authority affirming that a constructed property is in compliance with the national building code and is fit for occupancy is called an Occupancy Certificate (OC). Whether a purchaser plans to use the property for the end or wants to sell the space, OC for a property transaction is required.
The factors verified for providing the Occupancy certificate are:
- If the property is constructed according to law and the approved plan
- Has the building been constructed in compliance with the building code
- If it has all the basic needs required such as drainage, electricity, etc.
- If all the required clearances including the NOC from the fire department is obtained
How to get an Occupancy Certificate?
It is the responsibility of the builder / developer to apply to OC with the local municipal development authority of the property. The certificate will only be awarded after the inspection authority is satisfied that the project is built according to the approved construction plan and mandatory standards. In certain cases, though, the contractor can take partial OC and sell ownership. For instance, in the case of construction projects with mixed uses, a building contractor is allowed to acquire partial OCs of partially completed housing buildings and to pass ownership to the owners of flats. Therefore, it is essential that the buyer receives the document to make the possession of the property legal.
Which documents are required for obtaining an Occupancy Certificate?
Ideally, within thirty days after project completion, a builder should submit an OC application to the Municipal Corporation. However, buildings with some design differences and which have flouted authorized building plans do not qualify for the OC. The list of documents required for obtaining occupancy certificate are:
- Copy of approved plan of building
- NOC document copies obtained from pollution board and airport authority
- Certificate for the commencement of construction
- Updated or recent property tax slips
- What happens if you occupy the building without an Occupancy Certificate?
- The constructed building can be declared as an illegal property
- The legal authorities hold rights to evict the residents
- Due to the illicit status, the property is liable to demolition
- Loan approval and sales of the property will be constrained
- Disconnection of supply of water and electricity without any intimation
- Penalty on the property will be imposed, which will require higher property tax payment
- Receiving Khata certificate is be an issue
What is a Partial Occupancy Certificate?
The partial OC is majorly seen in case of large development plans, where the construction is done in multiple phases. In this case the partial OC is given as the developer for tower wise construction.
The main advantage of partial OC is that it provides all the access to the basic amenities and uphold legal rights of the property by homebuyers. However, the amenities such as swimming pools, fitness center and others are not accessible under the accessed. Also, the approval of home loans and the obtaining of the Katha certificate will be a problem.
Occupancy Certificate vs Completion Certificate vs Possession Certificate
The three terms may seem overlapping and confusing but they are very different from each other. A housing project will get a ‘completion certificate’ from the authorities when it is liveable with all facilities. The project will get its ‘occupancy certificate’ when the authorities are sure that the construction followed all rules, laws and by-laws. A possession certificate, on the other hand, is the confirmation of the transfer of the property from the builder to the buyer. The builder issues a ‘possession certificate’ and it has the date when the buyer officially takes over the property.
States whether the building has all requirements to make it liveable
States whether the construction norms and building by-laws are followed
States the date of transfer of ownership from the developer to the buyer
Issued by authorities to the builder
Issued by authorities to the builder
Issued by the builder to the buyer
Possession of the building is offered after CC issuance
Builder can apply for utilities like electricity, water supply etc. after OC
Issued within 30 days of OC and CC issuance and buyer can move in
Occupancy Certificate: Protection for Property Owners
An occupancy certificate ensures the suitability of a property for possession. It helps you ensure that neither any untoward accident occurs nor are you offered an unsafe building to reside in. As a buyer vigilance is important so that you are not duped and you can secure your rights over your property. If your builder refuses to give you an OC, you can file a complaint in the consumer’s forum. A legal notice, asking him to hand over the OC, should reach him within a month. You can come together with other buyers and report to the RERA if the project is registered under RERA (Real Estate Regulation and development Act).
Summing Up – Occupancy Certificate:
An occupancy certificate is an important document of property rights. It helps secure government/municipal services such as electricity, water supply etc. You must remain very vigilant and ensure to receive OC from the builder. You can complain to the consumer forum or the RERA in case your builder misses/refuses to give you one.
Can I buy the property in case the builder does not have the Occupancy Certificate?
It is always advisable to order both OC and CC before you buy a house. If the builder will not have OC or CC, the buyer-seller arrangement would be the next course of action. In case of delay in providing the OC or CC, the buyer can request the rent for the concerned period.
Can I sell my building without an occupancy certificate?
Selling a property without OC is not possible, as without the document you are not the legal owner of the property.
What is the difference between the Occupancy Certificate and Completion Certificate ?
Occupancy Permit shall inspect and approve a property that complies with national code, municipal utilities, electricity, sanitation and other authorizations. The completion certificate, on the other hand, is a declaration certifying that the property is suitable for buyers to purchase.
Who issues the Occupancy Certificate?
The municipal corporation (local municipal body) issues an occupancy certificate. They will only do so if they are satisfied that all the rules and local regulations have been followed during construction. The builder will receive the certificate which they will pass on to you.
What if the builder does not give the Occupancy Certificate ?
In case your builder misses giving you the occupancy certificate, ask them upfront. If they still refuse, you can complain to the consumer forum or the RERA.