The Occupancy Certificate (OC) is one of the documents that you definitely should be aware of when buying a home or a commercial property. This certificate is vital because it prepares your dream community or business place to be accepted as legal to reside there or conduct business. In its absence, you may be forced to endure legal setbacks that can ruin your investment. In this blog, we are going to get deep into the meaning of OC, why it matters the most and how to check it before we close the deal.
What is OC in Real Estate?
The full name of the OC is Occupancy Certificate. It is a legal document issued by the local municipal or planning authority following the completion of a real estate project. The certificate also ensures the building was built according to approved plans and in accordance with all the necessary standards and requirements of the whole building, such as safety standards, safety in electricity, water, fire, and stability.
In simple terms, an OC declares that the building is habitable and buyers are legally allowed to occupy it.
What is the purpose of an Occupancy Certificate?
Occupancy Certificate is not only a formality, but it has various legal and financial consequences. These are the more notable reasons why OC is relevant in real estate
Legal Compliance - It becomes illegal to stay in a property without an OC. Under the law, builders must acquire this certificate prior to the delivery of possession.
Safety Assurance - OC provides safety assurance that the property has been checked on safety equipment issues like fire exit, strength, and emergency facilities, and the basic services.
Home Loan Eligibility - Before issuing or even releasing a home loan, most banks and other financial institutions require OC.
Better Resale Value - A legally constituted property has better market reputation and resales, as potential buyers favour projects that are lawful.
Security Against Frauds committed by Builders - A project without OC can be a sign of deviations of approved projects or incomplete clearances.
Who Issues an OC?
The Occupancy Certificate is issued by the local municipal corporation, the municipal council and the development authority of the city or the state in which the property is located. For example –
- In Uttar Pradesh Noida Authority, Greater Noida Industrial Development Authority (GNIDA).
- Municipality Corporation of Delhi (MCD) in Delhi.
- Brihanmumbai Municipal Corporation (BMC) in Mumbai
Process of Obtaining an OC
In this way a builder normally acquires Occupancy Certificate
Construction Completions- Construction shall be finished as required according to the approved layout and approved building plans.
The builder applies to Local Authority - The application should be accompanied by the following documents –
- Approved building plans
- Completion Certificate (CC)
- Fire, Water, and Electricity departments NOCs.
- Structural safety certificate
- Site Inspection - Authorities will pay visits to the site and ascertain that the site is well kept in safety and planning requirements.
- Correction of Problems - In the event of any disparities discovered the builder has to rectify them prior to permission.
- OC issuance - When all the requirements are satisfied the Occupancy Certificate is issued and the property is legally inhabitable.
How to Verify an OC as a Buyer
You must always ensure that the property you are buying has a valid OC. Here's how you can verify it- Go to the concerned municipal authority or demand a copy to the builder.
- Check the information on the RERA portal of the state.
- Look at the official stamps and signatures of the document.
- Compare dots such as project name, location, and builder.
- Otherwise, seek the services of a real estate attorney to make sure.
Distinguishing OC, CC, and Possession Certificate.
Home buyers tend to be confused when these three terms are used. Here's the distinction –
1. Completion Certificate (CC) - The certificate confirms that the construction of the project is completed according to the approved plans.
2. Occupancy Certificate (OC) - Certifies that the building is safe, compliant and fit and prepared to be occupied.
3. Possession Certificate - The builder issues the buyer with a certificate that conveys receipt of a given unit of the property. Under a registered sale deed only, is the property legally owned.
Key Takeaways
1. OC - Occupancy Certificate.
2. Authority - Local municipal authority or development authority.
3. Purpose - Certifies that a building is lawful to be occupied.
4. Significance - Critical in-house financing, resale and law enforcement.
5. Buyer Checklist - Do not buy without checking OC.
Final Words
Buying a house is a huge step to make, and it is an Occupancy Certificate that will protect against legal costs, financial losses, and hazardous conditions. It is always important to check OC whether you are purchasing the house to settle or are buying a commercial location as an investment, since without this you may end up buying an expensive misfortune.
Frequently Asked Questions (FAQs)
Q1 What is OC in real estate?
Ans- Occupancy Certificate (OC) refers to a written document that is issued by the local municipal or development authority that verifies that a building is safe, has been completed in accordance with authorized plans and fit to be occupied by people.
Q2 What is the full form of OC?
Ans- OC is the short-term name of an Occupancy Certificate.
Q3 Who issues an Occupancy Certificate?
Ans- The OC is granted by local municipal corporation, municipal council, or development authority on the premises where there is a property. e.g.
- Noida Authority (UP)
- MCD (Delhi)
- BMC (Mumbai)
Q4 What is the significance of the Occupancy Certificate?
Ans- OC is essential because –
1. It renders the property legally habitable
2. It is required in home loan approvals
3. It guarantees safety to buyers
4. It increases the resale value of the property.
Q5 Is it possible to stay in a house without OC?
Ans- Legally, you should not. Being in a property without OC could be unlawful and could lead to fines or even eviction by the municipal authority.
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