Possession certificate: Everything home buyers need to know about this document

[ecis2016.org] We examine what a possession certificate is, when it is issued and its importance for home buyers

What is a possession certificate?

A possession letter is a document that mentions the date within which the buyer will have the possession of his under-construction home. A possession letter, thus, acts as a proof of promise on the part of the builder that they are liable to provide the possession of the unit to the buyer as per the date mentioned in the possession letter.

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Now, having a possession letter and having the possession of the property are two different things. A letter of possession is merely a promise, as long as you do not have the actual possession of the property.

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The document that a builder issues to the buyer while granting possession of the unit, is also known as the possession letter. In this instance, the term possession would mean that you have the possession of the property at that particular time. In this case, when a builder issues a possession letter to a buyer, the document acts as a testimony of the transfer of the possession of the property. A possession letter by a builder to the buyer signifies that the property title and its physical possession now lies with the buyer.

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Possession letter sample

POSSESSION LETTER

Date: ______________

To,

<Customer Name>

<Customer Address>

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<Contact no>

SUB: Possession for Unit No ________________ situated at Project XYZ, located at <addess>.

Dear Mr/Ms ______________________________,

Greetings from ABC Builders.

It gives us immense pleasure to present this Possession Letter and handover the keys to your Unit No. __________ in ABC Homes purchased through the agreement dated ___________ and registered through Registration no ___________ dated ______.

We are happy to note that you have accepted peaceful and vacant possession of property bearing unit no _______ , in accordance with the provisions of the apartment/villa buyer’s agreement, after undertaking a thorough and complete inspection of the unit and other amenities / facilities provided and after being satisfied that the construction is in accordance with the terms and conditions of the builder-buyer agreement, with respect to the area measurement, workmanship of the construction, standard of the materials used, amenities, fixtures, fittings and finishing thereof and that you have no grievances/complaints of any kind whatsoever and that you waive your rights in this regard.

You hereby commit and confirm that with the acceptance of possession, you have no claims, disputes, differences or demands against the company. You also agree to sign all documents, papers, forms, etc., as may be necessary for your unit and for the purpose of formation of the association of owners.

The charges applicable for common area maintenance for your unit will commence from ________________. Our estate management team shall be available at the site, during the handover period, to assist you throughout the possession of your home. You shall also have the right to use the open car parking space.

Kindly return a duly signed copy of this letter to us, as a token of your confirmation.

We wish you and your family a wonderful new beginning in your new home!

Regards,

Manager

ABC Builders

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I/we have received possession of my/our unit in XYZ Project and irrevocably and unconditionally accept and confirm the contents hereof:

(Mr / Ms  __________________________)

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What is a possession certificate?

A possession certificate is a document that states that someone has the possession of the property in question. While the terms possession letter and possession certificate are interchangeably used, both are sometimes used to mean two different things.

Sometimes, to raise funds against their property, an owner has to provide the lender with a possession certificate, with an authentic statement from the municipality or tehsil concerned. The possession certificate is one of the supporting documents and cannot act as the sole proof of the owner’s ownership over the asset.

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What is an occupancy certificate?

An occupancy certificate is a crucial document that a builder provides to the buyer, only after he has received a go-ahead from all the authorities that deem the property fit for possession. The authorities’ approval would mean that the builder has constructed the project, in line with all the prevalent construction laws and it is safe for the property owners to start living in their respective accommodations. For a builder, the process of obtaining the occupancy certificate is highly complex, because they have to submit a large number of documents to the municipal authority or the development body in the area. The occupancy certificate, mostly referred to as OC, is then provided, after the authorities make ground-level inspections and verify every detail.

To get the occupancy certificate, builder have to mainly submit the following documents to the authority concerned:

• Copy of building sanction plan.
• Building commencement certificate.
• Copy of building completion certificate.
• Copies of no-objection certificates (NOCs) from the pollution board or Airport Authority.

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Note that the actual number of documents that the builder will have to provide, to get an occupancy certificate for their project from a competent authority, may be much larger in number. This is only an indicative and not an exhaustive list.

As far as a buyer is concerned, they must not move into a property without the developer showing the occupancy certificate. Doing so may jeopardise one’s physical wellbeing and the legal status of your property.

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