Builders must get occupancy certificate before giving possession: UP RERA

The Uttar Pradesh Real Estate Regulatory Authority has taken a big step in the interest of homebuyers. Builders can now only issue the possession letter after obtaining the Occupancy Certificate (OC) from the local authority. What is an OC and how important is this certificate for homebuyers? How will homebuyers benefit from it? Let’s understand.

Whenever developers construct a building, they have to comply with many regulations. After the building is constructed and ready, the authority checks whether the construction complies with the building bylaws and layout. If the rules are followed, the authority issues the Occupancy Certificate (OC) to the developer. The OC indicates that there have been no violations of regulations in the construction of the building, necessary approvals have been obtained, the building is ready for occupancy, and you can live in it.

RERA has clearly stated that builders will not impose any demands or conditions on homebuyers in the Offer of Possession Letter. A common format for the possession letter has been issued. RERA has uploaded this format on its website. All builders will issue possession letters to their customers using this format. Builders who obtain the OC must issue the possession letter within two months of the date of obtaining the OC, regardless of any circumstances.

RERA has advised homebuyers to always ask for a copy of the OC from the builder during the possession letter process. However, RERA has entrusted this responsibility to the builders. Upon receiving the OC for the building, the builder will provide its copy to the homebuyers. If any buyer does not receive this certificate, they should demand it along with the possession letter.

But why did UP RERA feel the need to take this step?

In recent days, there have been several cases where builders mentioned various demands in the Offer of Possession Letter, even though their projects were not fully completed. Until now, builders used to apply to the authority for occupancy and completion certificates, and if the authority did not respond within 30 days, the builder could issue the possession letter.

Builders were taking advantage of this rule. Applications for occupancy in the authority remained stuck in files for years, and builders would exit the project by giving possession of flats. Later, homebuyers had to face various problems.

Real estate expert Pradeep Mishra suggests that before taking possession of a flat, buyers should demand a copy of the Occupancy Certificate from the builder. It is also possible that the building may not have complied with the regulations during construction, leading to the local authority not issuing the OC. In such a situation, if any mishap occurs, the responsibility will lie with the homebuyer, not the local authority. If the authority does not issue the OC, it means the building is not fit for occupancy. Only after obtaining the Occupancy Certificate from the authority will you gain ownership rights.

In recent years, it has been observed in many places including Noida, Greater Noida, that developers give possession by doing ‘possession for fit-out’, which is entirely illegal. Possession for fit-out means you have been given possession of the flat to get the interior done. However, due to lack of information, people start living there. As a result, it turned out that the builder took all the money from you, but ownership rights did not come to you. With RERA’s new orders, builders will be restrained from acting arbitrarily.