Occupancy Certificate: It’s Important While Getting A Home Loan

Yash, who works as a marketing manager, is moving to his newly built flat near his office in Gurgaon. When he invited his friend Shlok for the housewarming party, Shlok began asking Yash about how he had managed to purchase a house just 3 years after finishing his Bachelor’s. Yash explained how he would have done it a year earlier, but simply couldn’t because his bank denied him a bank loan – despite having a great CIBIL score. His builder couldn’t provide him with an occupancy certificate, the bank refused the home loan and his plans were delayed by another year.

Is your house-warming party getting delayed just like Yash’s?

What is an Occupancy Certificate?

Occupancy Certificate - Home loans by Finserv MARKETS

Over 52% loan applications are rejected in India. In case of home loans, lack of approval of property for which the loan is being applied is one of the most common reasons for rejection.

Thus, an occupancy certificate, which certifies that a particular property is habitable and complies with existing rules and regulations, can play a significant role in several property related matters, including the granting of a home loan.

Further, an occupancy certificate is a crucial document that makes homeowners eligible for major services like:

  • Water Connection

  • Sanitation Connection

  • Electric Connection:

Moreover, it makes the home loan process seamless and hassle-free for young and ambitious professionals like Yash. An often overlooked piece of documentation, an occupancy certificate essentially declares that the property being applied for is safe and fit for inhabiting. Officially, you cannot move into your home without having an OC.

Benefits of an Occupancy Certificate

Occupancy Certificate protects you, the house owner from a number of risks. These include, but are not limited to:

Legal issues

Illegal construction, which may call for eviction or demolition of the building.

Lack of Basic Services

Buildings that are not compliant might be taken off the grid. Authorities can also stop the water/gas supply. Having an OC can prevent this from happening.

Structural risks

Buildings that are not earthquake compliant, or have a number of floors that are greater than the authorised number, are not issued an OC.

Illegal properties are far more common than you might think: In 2010, Thane district alone is reported to have had 5 lakh illegally constructed properties.

Are there any exceptions

If you want to purchase a property that is still under construction, the builder will not be able to provide you with an occupancy certificate. In such cases, banks may issue a loan if the builder can provide you with an application for one. The application should not be older than 1 year, since OCs get issued within a year from the date of application. If you are purchasing a property that was constructed before 2006, the owner will not be able to produce an occupancy certificate. In such a situation, the loan provider might use alternative means, like an audit report to verify the same.

Conclusion

While you may still get a loan without an occupancy certificate, inability to produce one for your building can potentially invite prosecution. The infamous Campa Cola case in Mumbai is a classic example of why you should never move into a house without getting your occupancy certificate from your builder. Moreover, an occupancy certificate will also ensure that you are eligible for transferring your home loan, since many banks will often require further documentation in case you don’t have one. While people without an OC have been granted new loans and transfers on the basis of audit reports, the process usually becomes tedious and time consuming. With financial services like instant personal loans and home loans being provided online, there has been growing aversion towards tedious procedures, that require the customer to repeatedly visit banks in person.

The traditional home loan process flow - Finserv MARKETS

That being said, home loan providers are also able to fast-track your application on the basis of the documents you provide to them. Thus, having an OC can save you the trouble of paperwork and lengthy application processes for home loans.

While selecting your home loan provider, you must be astute enough to settle on one that doesn’t require heaps of documentation and reams of paperwork. Bajaj Finserv Home Loan, available on Finserv MARKETS offers a comprehensive, one stop solution for millenials like Yash, whose busy lives keep them from crossing the priorities off their checklists. Minimum documentation is needed and instant loan approvals and disbursals of up to Rs. 3.5 crores are granted to those opting for a home loan on Finserv MARKETS.

With 360-degree support for all your financing needs, the Bajaj Finserv Home Loan not only offers interest rates as low as 8.8%, but also future proofs you by providing features like a top-up loan of upto Rs. 50 lacs and easy balance transfer with minimal documentation. What’s more, you can be in total control of your Bajaj Finserv Home Loan with the digital customer portal. Visit your app store and download the Finserv MARKETS app to apply for a home loan today!

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