The happiest moment during property purchase is when a buyer receives a letter from builder to receive possession of property. A buyer is so enthusiastic that he receives possession of property without going through the basic checklist. These days due to the slowdown in the real estate market, almost all the projects are getting delayed. I highlighted the reasons for delay in my post, Why under construction projects gets delayed?. A buyer is so frustrated over a delay that he accepts possession of property on as is where is basis and what is there is basis. This approach may land a buyer in trouble in future. Whenever you receive communication from builder to receive possession of property, As a buyer you should not act in a haste. It is important to ensure whether the property is ready for possession or not. In many cases, the property is registered before the builder offer possession of property. The registration is based on sale agreement or the UDS in the property. Such a situation is not favorable for buyers. Builders offer possession of the property on take it or leave it basis. Therefore, i always suggest my clients to register property only at the time of possession of property. Let’s check the imp points
Possession of Property – Basic Checklist
(a) Occupancy Certificate or Completion Certificate
As and when you receive communication reg possession of property, the 1st step is to demand occupancy or completion certificate from the builder. The common tactics used by the builders is that they have already applied for completion or occupancy certificate. Please note that application for OC or CC does not ensure that local town planning authority is obliged to issue the same. In case of more than 5% deviation, local town planning authority may deny OC or CC to the project. If the OC or CC is still not issued then a buyer may refuse to receive possession of property. A buyer may send a written communication to the builder that he/she will accept possession of property once the OC or CC is issued. It is very much legal to demand OC or CC before possession. A builder cannot force possession of property if the OC or CC is not issued by the local town planning authority.
(b) Physical Inspection of the property
In many cases, a buyer is NRI or stay in some other city. It is very critical to physically inspect the property before accepting the possession of property. These days the not so good construction quality cause a dispute between buyer and the builder at the time of possession. Water seepage is one of the most common issues. If the buyer cannot physically present for possession then he may send his friend/relative to physically inspect. Don’t accept the possession till all the issues/repair is completed. Normally builder insists on taking possession of property and promises to address the concerns afterward. A buyer should not budge.
(c) Project is Complete
This is another major problem and common tactics by builders to get 100% payment. The amenities and other common facilities are incomplete at the time of possession. The builder hand over the possession to all the owners and association has to run after him to complete the project. In many cases, i observed that project remains incomplete. The association completes the project. Therefore, a buyer should not accept the possession of property till the project is complete. The excuse from builder’s side is that flat is ready and buyer should not bother about common amenities. Always remember that you are also paying for common amenities not only for your flat. If you take the possession then there is no guarantee that project will be completed.
(d) Delivered What is being Promised
At the time of possession, you should ensure that flat is being delivered as promised in written agreement. You may measure the carpet area and also check the tiling / flooring. In some cases, the builder also promises add-on like the chimney, premium fittings etc. It is advisable to pull a copy of an agreement with the builder and check what all was promised. After you receive the possession of property no one will listen to you.
(e) Written Communication
As a thumb rule, all the communication with the builder should be in writing. In one of the case, the builder offered possession of property to one of my client Ms. Sheetal Sharma. He also raised demand note for final disbursement. She orally communicated to the builder to fix certain issues including repairs etc before she accepts possession. To her surprise after 3 months builder imposed a penalty on her for the delay in final disbursement. She didn’t have proof that flat was not ready for possession. The payment was delayed because of this. It is advisable to keep all communication in writing with the builder.
(f) Final Disbursement
Normally 5% to 10% payment is due at the time of possession. You should pay or disburse this amount only at the time of receiving possession of property. Sometimes builders demand to post dated cheques or promise to complete the project by XYZ date. You should not fall in such traps. After you are satisfied with the quality, condition, compliance part and property registration then only final payment should be released. Be assured that you are seeing the builder or his representative last time at the time of making final payment :).
(g) Conditional Possession of Property
Last but not the least. Sometimes the circumstances demand that the buyer has to accept the possession of property though he is not satisfied on any one of the accounts. In such cases, you can clearly mention on the builders copy that you are receiving conditional possession of property or under the protest. You should specify conditions to be fulfilled by the builder like any pending repairs or OC/CC is not handed over. In short, possession is subject to fulfillment of certain conditions from builder’s end. If there is a delay in the project then you can always mention that compensation is due from builder’s end for the delay. By doing this, you can always follow up with the builder in future else as i mentioned that oral commitments have NO VALUE. In an extreme case, if buyer takes the legal route on any such issues then you can prove that it was informed to the builder.
Hope you liked the post !!!
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Hi Nitin,
Thanks for the such a nice details.. I have a doubt.. I am going to book a ready to book flat.. Builder is providing the OC and Khata.
As the d designed shared by the builder it has attached bathroom with Bedroom but in reality one bathroom ks outside the bedroom as the owner requested that.. due to some reason owner want to sell that flat which is not yet registed in his name. Will I get the OC with the change in bathroom location??
OC is issued for the complex not for individual flats. You check whether your floor is included in OC is not. It seems deviation is done afterwards or the local town planning authority ignored the same. I fail to understand how Khata A is issued without registration. It seems builder is referring to Khata of land which is of NO Relevance. In case of deviation, you may face problem in obtaining Khata A for your flat.
Hi Nitin
I am planning to sale my Nagpur based property. The purchaser is taking loan from HDFC. According to purchaser, HFFC will require mutation certificate before disbursement of loan money. Can you please suggest if this certificate is required? I don’t have it.
Thanks
It is required
What’s process of getting Mutation Certificate? Beside mutation certificate what else I need to produce to purchaser?
You may check from local municipal corporation. For list of documents, please check my post on same under “Useful Links”. List shared by me is general list and vary from case to case basis.
Hi Nitin. can i buy a general power of attorney property plot in chennai. it seems it is registered as it is showing in E.C. pl guide me
If the GPA was signed before Oct 11, 2011 i.e. before the supreme court order on transfer of property only through registered sale deed then you can buy else you may drop the deal.
Hi Nitin, GPA is signed this year 2015, I see that in EC. Kindly advice . Land promoter says there is way to tansfer thru GPA
As i have not seen the documents therefore cannot comment further but there seems to be contradiction in this case. In EC, only sale deed/conveyance deed entries which are executed in sub-registrar office are captured. I am not sure how a GPA is reflecting in EC.
Hi Sir,
What r the precautions to be taken while buying prelaunch property?
I will not prefer buying Pre-Launch Property until unless it is from very known and reputed builder. As such Pre-Launch properties are sold after JDA is signed between builder and land owners or even before that. Mostly none of the statutory approvals are in place therefore technically nothing is in place to check or take care of.
You may check the exact status from builder and accordingly decide. For more details please check my posts on Real Estate.
Mr.Nitin,
in Greater Noida West project the Builder is offering possession of flat under part completion certificate as said by them that they had applied for completion certificates and there is delay in obtaining the same from concerned Authority .Is this legal to take possession ?what’s the risk in this case ? How much time initially takes for a builder to obtain completion certificate from Authority
You have not mentioned the reason for delay. Legally you cannot take possession till completion/occupancy certificate is issued by the concerned authorities. There are multiple risks but once you take possession, you cannot insist on OC/CC from builder. The completion certificate is normally issued within 6-8 weeks time if there is NO Deviation from approved layout plan. The reason for delay may be deviation from approved layout plan.
Builder are not mentioning the cause of delay. also there is deviation from the layout plans.
It is better to take possession/register the property once the OC/CC is issued.
In this case is builder liable to pay the delay penalty because CC is not obtained and the buyer is offered “Offer of Possession”.
You refuse possession till you receive OC. It is legal and penalty is applicable.
What is the difference between OC and CC. Builder has received the partial CC, but not from my tower. I had a discussion with Builder and he told me that they have applied for CC and the matter rests with Greater Noida Authority, in this case builder denied for penalty. What will be the next step for me to ask for penalty from builder, how can I proceed further for penalty.
CC means building is completed is approved as per approved plan and meet all other standards as laid down by the local development authority but may not be ready for occupancy.
OC means almost same as CC i.e. building standards and local laws are followed and importantly, it is safe to occupy.
For penalty, you need to check your agreement with the builder. Normally builders include a clause in the agreement that they can’t guarantee OC or CC.
Dear Nitin Sir , My wife & me bought an under-construction flat in 2008 in our joint name (Primary my wife and secondary me) from a Builder located in New Delhi and the under-construction flat is located in Gurgaon . Now , the builder is giving possession and we are in USA . My wife can not go India and therefore I am alone planning to go Delhi carrying a SPA (Special Power of Attorney) in my favour from my wife after stamp from Indian Embassy or US Notary Public and to get it registered in Delhi to use for taking possession from Builder . Can you please let me know the below :
(1) How and where (in Delhi or in Gurgaon) this SPA will get registered ?
(2) Do I need to personally present in some Sub-registrar office or some lawyer can get it done ?
(3) I heard Stamping by Collector of Stamps on SPA means the Registered SPA , is it true or registration of SPA is different ?
(4) Do you have any contact in Delhi to get the Registration of SPA done so that I can use your services ?
1. It will be registered in SDM office. Please check my following post
https://www.nitinbhatia.in/real-estate/power-of-attorney-by-nri/
2. Physical presence is required but agents can get it done without physical presence
3. No. It is not same.
4. We only provide consultancy service
5. Witnesses will be from USA. Ideally they should accompany you to embassy.
Thanks sir , now me and my wife are planning to go Delhi to take possession and thus carrying SPA with me is not required , but my wife will be back to USA after a week and I will stay there , so is it better that when my wife is also in Delhi before returning back to USA , then should i also get a SPA registered from her in my favour so that if her signature or presence is needed later , then I can represent her ? At the time of buying this Flat with applying NRI Home Loan in 2008 , I was only physically present in Delhi and my wife was in USA and she sent me SPA on plain paper from USA attested & stamped by US Notary Public and the Agent got it stamped at Delhi from Govt. Collector of Stamps Office and I represented myself and my wife on the basis of this SPA (as home loan & flat in joint name of my wife & me) on home loan and property documents with bank & builder . But I don’t have the original copy of that SPA because Original is with Bank now , so is it better to get a fresh SPA registered at Delhi now when my wife is there before she goes back to USA ? ?
I will take your consultancy service before going for registration of this flat .
If your wife is traveling to India then to avoid hassle she can execute fresh SPA in India in your favor. If the SPA signed in 2008 is legally valid then you need not sign fresh SPA even if the original is with bank. Based on the same you can sign on behalf of your wife provided there is no change in the content or material facts of SPA executed in 2008. In my opinion, to be on safer side execute fresh SPA as its been 7 years now.
Thanks , Sir ! Should i write our New Delhi address in making fresh SPA in Delhi or USA address because we are Indian Citizen & have permanent home at Delhi but mostly reside in USA as NRI for job . I will stay at delhi and only my wife will go back to USA within a week ?
You can mention both i.e. permanent address in Delhi and currently residing at USA address.
Sir , in June of 2015 when my wife was in Delhi , i got a GPA registered in my favour from her in Gurgaon so that i can sign on her behalf for anything where she needs to sign either bank or rent agreement or anything else . Can i use that registered GPA now to take possession from Builder in Delhi ? In possession offer letter , builder has mentioned to bring SPA if one of the joint owners can not come , but i am confused because i have GPA and not SPA ?
It depends on the content of the GPA. Normally for such cases, SPA is executed. SPA is executed only for the purpose of completion of property transaction.
Fhh
Dear Nitin ji, I have recently booked an apartment in Goa (Builder-TATA). The construction is in progress. However, builder has approached us to make payment towards-Stamp duty/ Registration charges now itself. On enquiry, we are informed that as per MOFA maharashtra law, buyer can register his property when 20% Payement has been paid to builder. Also, we were that we do have an option Not to pay this now but at time of possession. Please advise. How does this model work- registration before possession by Buyer? What are the pros and cons.
As i have not seen the documents but there can be multiple permutations and combinations. In Maharashtra there is a concept of dual registration i.e. if you are signing a sale agreement and sale deed separately then both should be registered. Another possibility is that builder is registering the property on UDS and will sign separate construction agreement. I suggest you to go through the agreement clauses for finer details.
Dear Nitin ji,
How can we find out from HUDA that the OC for the specific apartment built by a builder (Vatika) has been issued or not. Are such details available on any web site/ portal.
Thanks and regards
Atul Dewan 9810005100
atul.dewan@gmail.com
The online info is not available. You may visit local HUDA office to check. Alternatively you may check with the builder.
Hi Nitin,
Please let me know What is the process of taking the possession under protest? and can builder deny the possession in that case?
On the signed acknowledgement submitted to the builder, you can mention that you are receiving the possession under protest. A builder can deny the possession in this case.
Hi Nitin,
I have some concerns about CC and OC.
1.In my CC,builder have not mentioned about the area of flat.
2.Do we get CC for a particular property as and when the construction progresses.
I received a CC till 11th Floor from puranik builders in Thane,Mumbai and when the construction progressed i received CC till 14th floor.Is it so,we receive CC from builders?
3.About the OC,if the builder delays for the possession,where can i mention a clause for penalty to be paid by builder to me.
Can i have your email-id,to get confirmed about the documents that i received from the builder?
You have not mentioned CC is issued by whom i.e. any govt authority or by the builder’s architect. Reg delay in OC, you cannot force penalty clause. You may include penalty clause only for delay in possession.
Hi Nitin,
I have booked apartment in Gurgaon in July 2009. Now builder is offering possession but builder doesn’t have PC yet for my tower. Builder has OC for other towers and mentioned OC will be available in next 2-3 months. Should I take possession and register my apartment or i should wait for OC.
Thanks
Kamlesh
In my opinion you should wait for OC.
Hello Sir,
Our builder is forcing us to sign the position letter even though there are many unsolved problems associated with the flat. When we are asking us to solve the problems, they are asking us to sign the position letter in order start solving the problems. They are assuring and pressuring a lot to sign the position letter.
We bought the flat in 2014 and they have promised to deliver the flat in June 2015.
The problems are – Poor door polish, problematic tiles, bad putty work and so on…
Please help me to take the decision.
Thanks,
Krishna from Andhra Pradesh
You should not sign possession letter till the builder fix the issues highlighted by you.
Thank you so much for the quick and prompt response sir.
I booked s flat & the deed has been registered. Now he’s forcing me to take posession of the flat as he has received the OC. However the amenities offered such as swimming pool, gym, garden, club house etc have not been put in place. Even water connection is not received. Can I refuse to take posession? I’ve held back 5% payment. He says he’ll charge interest. Kindly advise
Sir, where are you from?
If there is deviation from terms and conditions of the agreement then you can send a written communication to builder to complete all the amenities. On payment front, normally 5% payment is released at the time of possession. As the OC is issued and you can deny possession only on the basis of incomplete amenities as per agreement. Therefore before holding back the payment, you can go through the agreement to check whether you can hold back payment legally or not.
Hi Nitin,
I am not present in India and need to take the possession of a new apartment. I guess I can ask my friend to do the initial inspection and ask for any required repairs.
I am confused on the required GPA. Can a GPA be given to a friend / relative or it has to be a blood relation?
Also, is there a way to do all of this without a GPA.
Any of your friend/relative can receive possession on your behalf. You may issue authorization letter. You don’t need GPA.
Dear sir,
I have purchased a flat in gurgaon under subvention scheme(No EMI till Possession). I have given the builder 10%, 80% would be loan and last 10% will be given by me at the time of offer of possession. Can builder offer offer of possession without getting OC or CC????
Yes it is possible.
Sir,
Ireo builder in sector 60 Gurgaon is pressurising buyers to take possession of the flats without allowing to see the flats before possession. The project is also incomplete as park, approach road, club house and other ammenities are still being constructed. It does not have even power and water connection so far. It is asking the buyers to make final payment by specific date failing which holding charges would be demanded at Rs 7.50 per sft. It gives evasive replies to our queries sent to it
by email. What is the best course to follow in this regard.
I already answered this query.
Hi Sir
I am going to buy one new commercial shop in a commercial complex. Before giving token what things should be taken care of ? also I heard about we can check if it is free from any disputes – how to check this ?
You can get title certificate from a local property lawyer. Also go through my posts in Real Estate section.
Hi Nitin
I have the following questions on OC and amenities:
1. Is there any receipt/application number that builder gets from BBMP for applying OC?
2. Builder has mentioned to give OC in sale agreement, so what options residents have legal or otherwise if the builder denies ?
3. What options residents have if builder fails to provide promised amenities or there is a huge delay in doing so?
1. Builder gets the same
2. It depends whether there is any penalty clause is included in the agreement if the builder fail to provide OC
3. You may approach consumer court and claim compensation
Hi,
I want to know that on the posession letter the date must be the current date (keys handed over to us) or the registry date?
For ex.: my registry date is 15 june and possession date 12 october then which date should be there on the posession letter.
Please tell.
Regards
Kashish
Ideally it should be current date i.e. 12th Oct 2016.
Plz guide what to do now mr.nitin as i have already mailed them but they did not responded me till date.
Plz suggest.
Thanks
Your query is not clear to me. Please clarify.
Hi,
My query is i have purchased a flat in gaursons india pvt Ltd. ghaziabad. Now they are ready to serve a posession letter to me but on that letter they have mentioned the date on which i have registered my flat i.e.17.06.2016 now they are saying we cannot give you the letter with current date infact they are not picking up the call nor giving any response on my email. Facing hell of difficulties. I have returned that letter and the keys they have given to me on 12.10.16 and told them to convince me first with the genuine reason why it is of back date?
Hope that now you can understand my concern and guide me .
Regards.
okay..I suggest you to insist on actual/current date.
Sir i purchased an underconstruction flat in 2013, i paid d builder 5lakhs in cheque n have taken an 25lakh loan from d bank out of which i have issiued 15 lakhs to d builder….as per the agrement i was supposed to get possesion in 2015 nov, now its 2016 nov its one year that the project has been on a stand still.
You may check for penalty clause in your agreement for delay in possession and demand compensation from the builder.
If i say i wanna back out the builder, the builder says pay the bank 15lakhs n release the papers, i am in loss from all directions, builder doesnt wanna gi e a proper completion date the bank is least bothered, im staying on rent plus paying loans…im trapped. What can i do pls advise
You may approach consumer court.
Hello Nitin ,
I have some doubts on penalty where builder confuse me intimation of possession and actual possession. Please see the below facts and suggest me before going for registry.
because I want take each & every thing on written so that penalty part would be clear.
Builder – Bharatcity , Ghaziabad.
1. As per agreement possession date would be Mar-2015
2. Offer of Pre-possession (Intimation) sent on Feb -2016
3. Penalty Calculation from April 2015 to Jan 2016 = 10 month. (According to builder)
4. Noc cleared on May 2016
5. After NOC its 6 Months.
6. according to above calculation 940 x 5 x (10+5) = 70500 Rs (WITHOUT ANY INTEREST)
Please suggest .
regards
Sudeep Soni
You have not mentioned the date of Completion or Occupancy Certificate. Also it is not clear which NOC you are referring to.
Nitin ,
I have just received Intimation of possession letter + Demand letter (5 % due payment) on Feb 2016 after that I have cleared all the due and Got NOC on MAY-16.
then after NOC still flat not ready and builder count the penalty from Agreed possession date ( Mar 2015) to May 2016.
So Not clear about actual Possession letter because still physically flat is not handed over to me.
You need not worry…You can reply to builder to provide completion or occupancy certificate. Builder cannot offer possession without either of these certificates and legally cannot charge penalty only based on Pre-Possession letter.
Thanks Nitin, let me discuss same with builder.
Will get back to you if any technical information is require.
Hello, My builder is asking be to pay the final instalment and do the registration even before completing the 100% of the work. Do I have rights to say that I can do the registration only after getting the completion certification ?
You may check your payment schedule and in all probability it should be construction linked only. You should only pay as per payment schedule.
I’ve got the possession letter in June’16 and till now registration is not done yet . Around 4 tower handover done ,but no registration so far .. Kindly advice ..
Sorry i could not understand what is your query.
Hi Sir,
I have registered the and executed the Sale deed on 25th of Jan’17. I haven’t taken the possession yet, Now I’m noticing that all my flat walls are having serious cracks and bad quality of building.
Is there any possibility to cancel the sale deed or how can I handle the situation. Ultimately after seeing many issues before taking the possession itself, we are thinking to not take the possession.
Please advice us how can we move further on this issue.
Normally there is a clause in agreement that builder will take care of all quality issues as highlighted by you for 12/24 months. If there is no such clause in your agreement then you can complain to builder and request him to take necessary steps before you accept possession.
Hi Sir,
i have done the Registration of Flat, but my Loan is Cancelled from Reliance Home, due to Builder gave Fake Cash Receipt, to Banker, Banker Cancelled my Loan Stating That it is fraud From Builder Side , hence we are cancelling your Loan,
Builder is ready to do loan from other Finance company , also he is ready to bear the Cost .
If my loan Reject from other company , then what shall i do
Please. Advice Sir
waiting for your revert
Regards,
Chandresh Jaiswar
You may ask for refund of money if it is case of fraud or forgery. Also file police FIR against builder.
Hello Nitin,
I booked a flat in Noida and just received an OOP (Offer of Possession) letter from builder, in the offer they charged me final payment which is 5% and lots of other charges like IFMS, Maintenance, EWS, File charges, Advance MMC etc. etc. total is around 5 lacs.
Now, I have to clear all the dues before 10th April,2017 once i cleared all the dues then builder will take 30-45 days to finalize my flats and handed over to me.
My question is that is it the actual process to take possession of flat, if yes, then I afraid if I pay all the amount to builder, then its sure the builder will not take me seriously and not done work properly and timely.
Please suggest what should i do in this condition.
Regards,
Narender
There is no standard rule. You can inform the builder that flat is not ready for possession and you will clear the dues once it is ready for possession.
I have not signed posession letter. Shifted to purchased house. but the quality of work found very poor after started living in it. I am refusing to sign the possetion letter as well as final demand letter for final payment. All basic amenitiesa are pending by the builder. please advise.
It depends on the terms and conditions mentioned in the agreement. Normally, builder agree to bear repair cost in such scenarios for the period of 12-24 months from the date of possession. You may check your agreement for more details.
DEAR NITIN,
i have made completely payment to development authority. when i demand for possession letter, they refused and pressurized for registry 1st. without registry we can not handover flat to you. pls suggest.
Normally possession is given first and then the registration formalities are completed. You may physically inspect the property before registration and go ahead with the registration before possession. I am assuming you are buying from Govt development authority.
Dear Nitin
I have booked a flat in 2010 at Noida. My Builder promised me to offer Possession on Dec 2012, but not yet given. They are planning to hand over by the end of this month. Please let me know, Is that Penalty clause will be applicable from 2012? Builder is giving some excuse that the construction get stacked up due to NGT ban at Noida during 2014-15. Hence he can’t pay for that period. please advise.
Normally, builders safeguard by excluding delays due to govt approvals. You may check your agreement with builder whether any such clause is mentioned or not. If there is no such condition then the penalty is applicable from 2012.
hi Nitin,
within how many months of offer of posession we have to do registry?(he is telling you have to do in 6months else there is penelty)
P.s: builder has not completed the flat yet and asking to do registry 1st before paint,wooden floor etc be done..
Normally possession is handed over at the time of registration. You should not accept the possession of incomplete flat.
I have emailed builder that I won’t take possession of incomplete flat,is that fine or do we need to send any other formal way??
Also he is telling if you don’t do within 6 months we will cancel booking deducting 10% amont….can he do that?
You can submit hard copy also and clearly mention the reason.
Hi Nitin,
I have made the full payment of my flat by April end, now Maintenance Charges is left- They are charging around 50k (Maintenance + Sinking Fund ) and a PDC around 40k for next year.
I haven’t done the registry, which I’m planning to in the next 2 months and the builder is saying once you do registry then only we’ll proceed ahead to get the flat ready for us for possession.
My question is, we have not taken physical possession of the flat, am I still required to pay for the maintenance?
Plus, the offer for possession letter given by the builder states that “Any Delayed payments will attract a penalty of 18%p.a.”
Kindly suggest
You just check maintenance will be effective from which date. You should make it clear that maintenance should start from the date of possession even though payment is made in advance.