A possession certificate is a document that facilitates the transfer of the ownership of a home or property from the seller to the buyer. Apart from the date of possession, it also serves as proof stating that all the terms related to the property sale agreement have been fulfilled. A tehsildar, also known as the executive magistrate of the concerned tehsil, issues the possession certificate in rural areas while the Revenue Divisional Officer (RDO) does it in urban areas. The certificate includes the buyer's name, the date of possession, and the time frame within which the buyer must complete the final payment.

What is a Conditional Possession Letter?

A conditional possession letter can be used when a buyer is not entirely satisfied with the property. The buyer can submit their complaints and grievances to the builder/seller with the possession letter. The developer has to make the necessary changes as per the agreement. It can be on account of aspects like improper construction, usage of poor-quality material for construction, etc. If the builder or seller fails to meet the stated requirement, then the buyer has the authority to take the matter to court.

What is an Occupancy Certificate?

To affirm yourself as the rightful owner of a property, you will need to get an occupancy certificate (OC). The certificate states that the property has been constructed in accordance with the local laws. It also regulates that the construction of the property is completed and is fit to be occupied. Without the occupancy certificate, the local authorities can deem the property illegal.

Difference Between Possession Certificate and Occupancy Certificate

The possession certificate contains the date of completion of a property and cannot be used as proof of ownership of a property. The possession letter states the period before which the owner has to make the final payment to take possession of the property. Absence of this certificate will make your possession illegal.

On the other hand, local authorities issue an occupancy certificate (OC) to state the completion of the project. The certificate also indicates that the property is ready for occupation. It provides the buyer with all the rights to the property with complete access to civic amenities such as parking, running water, electricity, etc.

Documents Required for a Land Possession Certificate

Given below are the list of documents required to acquire a possession certificate:

  • A copy of Encumbrance Certificate (EC).

  • Identity proof of the buyer.

  • Copy of the registered lease and/or sale agreement of the property.

How to Acquire a Land Possession Certificate?

The procedure to avail a land possession certificate is different for every state. Given below are the steps to obtain a possession certificate online.

Step 1: Visit the nearest Right to Public Service office or Revenue Divisional Officer or Anchaladhikari and get the application form.

Step 2: You can also download the application form online from the Revenue and Land Reforms website.

Step 3: Fill in the online form with the required details in the respective fields.

Step 4: Now, attach all the required documents and submit the application form.

Step 5: You’ll receive an acknowledgement receipt along with a number to track the status of your application.

Banks and financial institutions insist on possession certificates to sanction home loans. The OC is also an essential document to undertake the possession of a property. The buyer must provide an original copy of both the documents to secure a home loan. Having all the documents in place will ensure faster approval of your home loan application. Before you apply for a loan, you need to compare the processing fee, prepayment charges, repayment options, etc.

At Finserv MARKETS, you can apply for a home loan amount of up to 5 Crores with no hidden charges. Moreover, you can customize your home loan as per your financial requirements. The home loan repayment tenure is quite flexible and ranges up to 30 years. Also, make sure that you do not forget to go through the terms and conditions mentioned in the loan agreement carefully to avoid any inconvenience while availing a home loan.

FAQs on Possession Certificate

  • ✔️What does a possession certificate mean?

    This certificate is an important legal document issued by the developer stating the date of possession of a property. For the transfer of possession, the buyer must pay a fee with interest on the property and take physical ownership.

  • ✔️What is a possession certificate from a builder?

    A possession certificate assures that the possession of a property has been successfully transferred from one owner to another. A buyer must ensure that all certification and registration documents are in place to gain authority on the property. Until then, the ownership will lawfully remain in possession of the builder. The builder must obtain an occupancy certificate (OC) before he grants the ownership of a property.

  • ✔️Can the builder give possession without a completion certificate?

    According to Section 3(2)(i) of Maharashtra Ownership of Flats Act, 1963, a builder is not allowed to provide possession to any individual without a completion certificate. Also, a buyer is prohibited from entering into possession of such flat without obtaining an occupancy certificate or the completion certificate.

  • ✔️Do you require a possession certificate to file for income tax?

    A possession certificate of the residential property is required to claim a tax deduction. You can claim the interest paid on home loan after possession in five equal instalments.

  • ✔️Is it possible to claim tax exemption for an under-construction property?

    Yes, you can claim tax exemption on the interest paid on home loan for a property that is still under construction.

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