What is an Occupancy Certificate (OC) in Real Estate?

When investing in real estate, many aspects come into play, and there are many things that you can do to help in your real estate investment. In our last blog, we discussed one such feature called Power of Attorney, and in this blog, we are going to delve deeper into the world of Occupancy Certificate, or OC. What is OC, and why is it a necessary part of Real estate? Let’s dive into it.

Occupancy Certificate (OC)

An occupancy certificate is a legal document issued by a local municipal authority or development authority. It certifies that the construction of a building complies with the approved plans, building codes, and local laws, and that the building is safe for people to live in. Without the Occupancy Certificate, one can not move into the apartment, and the property is considered illegal without the Occupancy Certificate.

Importance of Occupancy Certificate

The OC is very important in your Real Estate investment, and here is why:

Legal Validity of Property: An OC confirms that the builder has followed all legal norms and that the property is authorized for occupation.

Essential for Utility Connections: Many authorities require an OC before granting permanent water, electricity, or sewage connections.

Smooth Property Resale: If you plan to sell your property in the future, an OC adds to its credibility and ensures hassle-free resale. Loan Approval and Insurance: Banks and financial institutions often demand an OC before approving a home loan or property insurance.

Protection Against Penalties: Living in a building without an OC can lead to fines, eviction notices, or even demolition in extreme cases.

No GST: When a project has received its occupancy Certificate and you invest in it afterwards, then there is no GST applicable in the investment.

Who Issues the Occupancy Certificate?

The local municipal corporation or development authority is responsible for issuing an OC once the builder applies for it after completing construction. The authority will inspect the building to check whether:

• It adheres to the sanctioned building plan.

• It follows fire safety and environmental norms.

• It is structurally safe for residents.

Conclusion

An Occupancy Certificate is a very important aspect of real estate investment as it literally determines whether your project is legal or not. Having OC also allows you to lay a drainage system, water supply, electricity supply, and much more. So, be a smart investor, when looking for a ready-to-move-in project or a project which is nearing completion, make sure to check whether it has the Occupancy Certification or not.