Crucial role of occupancy certificates for entire building and not individual flats, in real estate transactions
Crucial role of occupancy certificates for entire building and not individual flats, in real estate transactions (Representational Image )
In the intricate tapestry of real estate, the occupancy certificate (OC) emerges as a critical thread, weaving together legality, safety, and compliance in the realm of property ownership.
Understanding the Occupancy Certificate:
An occupancy certificate is the conclusive approval bestowed by the local municipal authority or relevant governing body upon the completion of construction. This certificate serves as an official declaration that the building aligns with approved plans and complies with local regulations, rendering it suitable for habitation. It acts as a testament to the presence of essential civic facilities within the structure.
Importance of the OC:
1. Legality and Property Ownership:
Developers are required to obtain an OC for the registration of housing units in the names of homeowners. The OC is an indispensable prerequisite for the legal occupation of a property, affirming its adherence to safety and quality standards.
2. Sale and Transfer of Property:
Property transactions are significantly influenced by the presence or absence of an OC.
The absence of an OC can impede or delay property transactions, impacting the resale or transfer of ownership.
3. Compliance and Safety:Â
The OC serves as a guarantee that the building is constructed in compliance with the sanctioned plans and upholds safety standards. Homebuyers find assurance in the OC, signifying that the property is fit for habitation with all necessary civic amenities in place.
Distinction between OC and Completion Certificate (CC):
While the OC and Completion Certificate (CC) are interrelated, they serve distinct purposes:
The CC is issued by licensed professionals, confirming that construction aligns with the sanctioned plan. The OC, on the other hand, certifies the entire building’s compliance with the sanctioned construction plan, declaring it suitable for occupancy.
The Bombay High Court’s Verdict
A recent Bombay High Court order illuminated the consequences of lacking OCs for specific flats within a high-rise development. The court’s ruling emphasized that OCs are applicable to the entire building and not individual tenements. The case underscores the legal ramifications and significance of securing OCs for the entire structure.
Challenges in the Real Estate Sector:
Despite the pivotal role of OCs, a substantial percentage of real estate projects, particularly in regions like the Mumbai Metropolitan Region (MMR) and the National Capital Region (NCR), grapple with the absence of completion certificates. Shockingly, around 80% of buildings in Mumbai and Delhi reportedly lack CCs, and a considerable number are without OCs, creating a complex landscape for both developers and homebuyers.
Occupancy certificates stand as guardians of legality, compliance, and safety in real estate properties. Potential homebuyers are strongly advised to meticulously verify OCs and other pertinent certifications before finalizing a purchase, safeguarding their investment against unforeseen legal and safety issues.
