Since the establishment of RERA (Real Estate Regulation and Development Act) and Goods and Service Tax (GST) there has been a major change in the real estate industry, as buyers are becoming more conscious before investing on the project. Under RERA, builders are restricted from advertising their under-construction projects and need to get registered with all the information about the project. Moreover, it has attracted buyers to get an Occupancy Certificate (OC) before moving in. Buyers are also ready to invest on ready projects rather than waiting for under construction projects to get complete.
Occupancy Certificate is the part of the property buying process and buyer need to understand its importance.
What is OC and why it is needed? These are the two major questions that are still unanswered for many home buyers.
What is OC?
Occupancy Certificate is completion evidence as per the approved plan and compliance with local laws. Local bodies issue OC which is handed over to the home buyer. Without having an OC, the buyer won't be facilitated with water, electricity and other essential connections. Moreover, banks and other financial institutes do not sanction loan unless provided with OC as a part of the documentation process.
There are cases where home buyers even after investing a huge amount over the property are refrained from holding the property just because of no occupancy certificate. Keeping this as the major concern, RERA has made it compulsory for real estate developers to get the OC issued within the stipulated time.
There are cases where OC gets rejected on account of building laws and violation of property. So as a buyer, you need to be vigilant before investing on any project.
Let us now check reasons to invest on property having OC ready:
Real estate developer offer varied deals to attract home buyers. This includes low interest loan, freebies, additional features in the apartment, etc. This is majorly witnessed in ready-possession projects and investing on such projects does make sense. Also the cost of the ready property compared to under-construction highly differs. The biggest benefit is the OC ready project, which is usually delayed in under-construction projects.
As mentioned above, the civic authority may deny the issue of Occupancy Certificate due to deviation in the approved plans of under construction projects, investing on ready-to-move projects is the best idea. These projects are being already awarded with OC, so you don't need to be desperate for moving in.
In India, real estate projects are plagued by delay in delivery of ownership and project completion. This certainly leads to the escalated cost of EMI and higher rental which can be a huge loss. So investing on OC-ready projects does make a good sense because there is no need to wait for the project completion.
Many home buyers invest in properties with a purpose of renting it and earning rents that can be used for pay off the EMIs. This is actually not possible if invested in the under-construction project, but is highly possible with OC-ready projects. With having no issues in building laws or property violation, home buyers can earn from rental income.
Many new projects in metro cities are supported with modern amenities and infrastructure like roads, water connection, electricity, etc. In under-construction projects, this infrastructure gets delayed, which makes the home buyer wait and if there is any issues with the property then the OC gets rejected. So investing in OC-ready projects having supporting infrastructure is important.
After the implementation of GST, Buyer does not need to pay GST if the project is ready to move and OC is received.
Conclusion: In all sense, OC is important to make the ready-project liable for home buyers to gain confidence in investing. Home buyers are investing huge amount that needs to be valued and this only happens when real estate developers avoid any kind of fraudulent activities.