Occupation Certificate and its Importance

        Co-operative Guru Shri P. Y. Rathod states that Occupancy Certificate is a vital document. He has analyzed and tried to answer most of your queries regarding Occupancy Certificate.

Co-operative Guru Shri P. Y. Rathod reiterate that Occupancy Certificate is a very important document. It evidences the completion of the building as per the approved plan and compliance of local laws.

Local bodies like City Corporations/ City Municipalities issue occupancy certificates, after ensuring that all compliance of local law is done.

Co-operative Guru Shri P. Y. Rathod explains that numerous problems can arise if a building does not have an Occupation Certificate. He has explained some of the problems as under:
1.    Without the Occupancy Certificate, it is difficult to get the water and sanitary connection.
2.      Financial institutions insist on Occupancy Certificate to sanction loans.
3.       Further numerous problems with respect to non-issuance of Occupancy Certificate arise on account of violation of Building Laws which are increasing day by day. Though the people have spent their hard earned money on the project with a dream of owning a house, they could not occupy the house for want of Occupancy Certificate. They have to suffer for none of their faults. Builders having good connections escape through various loop holes in the law.
4.    Buildings not having occupancy certificate or having deviations beyond legally allowed limits are illegal, not marketable, and not free of charge.
5.    People who have invested their precious money in such buildings where Occupancy Certificate is not issued and after waiting for many years to get an Occupancy Certificate. They prefer to occupy the flats without power, water and sewerage connections in fear of loosing the property & their hard earned money.

Regularization & Deviations during Construction
As per Co-operative Guru Shri P. Y. Rathod the laws are different in different states & cities, but in general most of the law specifies that:
i)          Wherever any construction is in violation/deviation of the sanctioned plan, the Commissioner may,  if he considers that the violations/ deviations are within 5% of
1)          the set back to be provided around the building,
2)          plot coverage
3)          floor area ratio and
4)          height of the building and that the demolition is not feasible without affecting structural stability, he may regularise such violations/deviations after recording detailed reasons for the same.

ii)     Violation/ deviation as explained above may be regularised only after sanctioning the modified plan recording thereon the violations/ deviations and after the levy of fee prescribed by the Corporation from time to time.

iii)    Regularisation of violations/ deviations under this provision are not applicable to the buildings which are constructed without obtaining any sanctioned plans whatsoever and also the violations/ deviations which are made in spite of the same being specifically deleted or rejected in the sanctioned plan.

Co-operative Guru Shri P. Y. Rathod states that only after receiving the Occupancy Certificate the Developer can lawfully allow the possession of the flats to be taken over by their owners. In absence thereof a developer is legally refrained to part with possession of the property. The law clearly states that No person shall occupy or allow any other person to occupy any new building or part of a new building for any purpose whatsoever until occupancy certificate to such buildings or part thereof has been granted by an officer authorised to give such certificate if in his opinion in every respect the building is completed according to the sanctioned plans and fit for the use for which it is erected. However in some cases the Authority may in exceptional cases (after recording reasons) allow partial occupancy for different floors of a building.

Co-operative Guru Shri P. Y. Rathod says that the last step before the construction work is termed as complete is obtaining the “Occupation Certificate” enabling the Developer to allot the occupation to the old as well as the new members.

Co-operative Guru Shri P. Y. Rathod further enlightens that in one of the cases the builder was unable to obtain the occupancy certificate after a prolonged wait requested his purchasers and handed over the apartments without power, water and sewerage connections. He put the entire blame on revenue authorities and disappeared. The occupants had to find their own way.

The Co-operative Guru Shri P. Y. Rathod further adds that obtaining the approval of the plans has become just a casual affair and nobody will abide by that. It is just a document to be produced during inspection. During the boom time a builder constructed several houses and flats violating building rules and regulations. They deviated from the approved building plans and went on to construct apartments where they should not have constructed.

The civic authorities refused to give occupancy certificate despite best efforts of the builder. In the mean time, the apartment purchasers on the assumption that things were happening to their satisfaction, performed house-warming ceremonies and took possession of the flats. When they were about to move in, the builder revealed the shocking news that even though he had constructed the apartments and houses to their liking, the authorities were not issuing Occupancy Certificate on one pretext or the other.

In one such another case observes Co-operative Guru Shri P. Y. Rathod that the builder constructed small flats targeting the middle-income group. The authorities, however, refused to issue occupancy certificate because of deviation from the approved plan. In this case, the builder got the plan approved for construction of 4 dwelling units – 2 on the ground floor and 2 on the first floor. However, he did something different in gross violation of the approved plan. Instead of constructing 4 dwelling units, he constructed 6 dwelling units. The persons who have invested in the flats were now desperate, as they would lose their money and the flats, if the authorities decide to demolish the structure.

Co-operative Guru Shri P. Y. Rathod further states that it is not that only the flat owners are suffering. A few builders, who have a heart for the investing public, too face problems. One such builder constructed 8 flats in accordance with the building regulations, bye-laws and approved building plan. He had completed five and 3 remains to be completed. The builder received the full payment from five purchasers & the other three backed out. This put the builder in a difficult situation, so for want of funds, three flats remain incomplete. The authorities insisted that they will issue occupancy certificate only after completion of the entire construction and the financial institutions were refusing to lend in the absence of occupancy certificate or no objection certificate from the authorities. The net result was that, not only the builder was losing money but also the purchasers of the flats, who had to pay interest to the financial institutions. The financiers too face difficulties in getting back loan installments. The authorities in such a scheme of things must be blamed for this state of affairs. The inspecting authorities do not carry out periodic and surprise checks at the construction site. In case of deviation they should take the builder to task in the beginning itself and not at the end of the construction.

RBI – Master Circular on Housing Finance which can be downloaded from RBI directly at:

B. i)   In cases where the applicant approaches the bank/FIs for a credit facility to purchase the built up house/flat, it should be mandatory for him to declare by way of an affidavit cum-undertaking that the built up property has been constructed as per the sanctioned plan and/or building bye-laws and as far as possible has a completion certificate also.

ii)   An Architect appointed by the bank must also certify before disbursement of the loan that the built up property is strictly as per sanctioned plan and/or building bye-laws.

It is pertinent to state that Majority of big builders follows rules and regulations, but a few do not. They dishonor rules and regulations by violating them. This is a vicious circle, which only the government can break. Government must initiate immediate remedial action to stem the rot. The authorities shall not be very rigid in granting completion certificates. If the builder has deviated a little more than the allowed percentage, the authorities may impose the penalty and regularise the building. The investors too must share the blame. They do not check the antecedents of the builder and his track record before taking possession they do not check whether the building is according to the sanctioned plan and the fixtures are according to the agreement. Many do not demand Occupancy Certificate, parent documents, title deeds, deposit receipts, from the builder. The purchaser who has not collected all the required documents, has to face various types of problems at a later period concludes Co-operative Guru Shri P. Y. Rathod

Co-operative Guru
Ex- Co-operative Officer, Grade (I).
Registrar of Co-op Societies,
Administrator & Enquiry Officer,
Election & Authorised Officer
Govt. Certified Auditor & Tax Advisor
 Co-operative Societies, Mumbai & Thane Division.