In the process of purchasing property in India, buyers often hear about “OC”. But what exactly does OC mean in real estate, and why does it matter to everyone involved in the real estate market?
In this guide, we’ll cover everything you need to know about OC in real estate so you are prepared before making your decision.
What Does OC Mean in Real Estate?
In real estate, OC is short for Occupancy Certificate. A development authority or local government department issues this document to home buyers, which ensures that a building is completed and suitable for living in.
Basically, an Occupancy Certificate (OC) shows that a building fits the national building codes and local rules, making it safe for residents to move in.
Why is OC Important in Real Estate?
It is imperative for buyers and developers to know the importance of an OC in real estate. Listed below are the reasons why an OC holds such great significance.
1. Acquiring possession of a property according to law
It is illegal to occupy a building without an OC under municipal law. An occupancy certificate is required even after the building is completed before you can officially begin using the space.
2. Proof of Compliance
OC guarantees that the building conforms fully to all safety rules, building regulations and fire codes.
3. Essential Services
In most cases, connectivity to water, electricity and sewage depends on the OC. If the record is not available, you may not get access to necessary services on time.
4. Reselling Real Estate, Renting It and Loan Services
Applications for loans on land or property may be rejected if they do not have an OC. Buyers can run into trouble when they try to sell or register a house without the original document.
How is an OC in Real Estate Obtained?
Getting an OC in the real estate sector usually requires several actions managed mostly by the builder or developer.
Step 1: Building is completed
It is necessary for the builder to construct the building according to the building plan approved by the authorities and local regulations.
Step 2: Send your application to your local authority
The builder can request an Occupancy Certificate from the local municipal body or development authority after the building work is completed.
Step 3: Inspection of your building
Using regulations, both environmental and structural, authorities ensure the building is up to code.
Step 5: Distribution of the OC
If the building passes inspection, the authority grants the Occupancy Certificate. It is possible that an OC will protect selected parts of a building or provide full protection for the whole structure.
Risks of Buying Property Without an OC
Having no Occupancy Certificate in the property you buy increases your risks:
- Legal Issues: Authorities have the right to evict or penalize those who live in illegally built structures.
- Lack of Services: No OC might result in your electricity or water being cut off.
- Problems with Resale: If your flat lacks an OC, it can be difficult to legally resell it.
- Loan Rejection:If you apply for a home loan, some financial institutions call for an Occupancy Certificate for processing home loans.
Always have the Occupancy Certificate given to you by the seller or developer prior to buying the property.
How to Verify OC in Real Estate?
You can make sure a property has a valid OC by doing the following:
- Request a Copy from the Builder: You may request a copy directly from the builder.
- Check with Municipal Authorities:You can also check with your local municipal body because many urban local bodies now allow online verification through their official websites.
- Ask Your Lawyer: During your transaction with a property lawyer, ask them to confirm the OC as part of their due diligence.
Partial vs Full OC in Real Estate
Let’s look at the difference between Partial and Full OC in real estate.
For big projects developed in phases, several developers may be issued Partial Occupancy Certificates. Doing this means a person can take possession of a part (such as one tower) of the project, while the rest is not completed.
But be sure that the OC certificate you receive includes your particular unit or floor so you have full coverage.
OC and RERA (Real Estate Regulatory Authority)
As per the RERA Act, builders are required to list registered projects and clearly say what approvals are pending such as the OC for the building. As a result, buyers can easily verify the documents they receive, including the OC.
Conclusion
All things considered, OC in the real estate sector is fundamental to owning and safely using your property. Buying any type of property means you should first make sure it has a valid Occupancy Certificate.
Don’t go ahead with the investment until you are sure an OC is valid because it safeguards your funds, protects you in court and helps you gain access to necessary services. As the real estate market continues to evolve, staying informed is your best weapon and knowing the role of OC is a big help in that direction.
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