Real estate basics: What is a Completion Certificate?


A completion certificate is an important document that states a property has been built, according to standards and proves the legitimacy of a real estate project. We explain its importance, for developers and buyers

A completion certificate is a document that is awarded, after the inspection of a real estate project, stating that it has been constructed according to the approved building plan and that it meets all the necessary standards set by the local development authority or municipal corporation. This certificate needs to be obtained by developers, as well as owners of standalone properties. It is required, to ensure the supply of utilities like water, electricity and drainage system.

 

Importance of a completion certificate for developers

 

 

A completion certificate contains all the details about the building, including the location, identification of the land, details about the developer/owner, the height of the building and the quality of materials used. It also states whether the project has been built according to the building plans and in accordance with the rules and regulations set by the local municipal authority, including the distance from the road, distance maintained between neighbouring buildings and so on. In many states, a completion certificate is necessary, for the developer to obtain water and electricity connections to the property.

On October 22, 2020, the Madras High Court (HC) also ruled that housing projects across Tamil Nadu will not be able to get electricity in the absence of a completion certificate. The HC ruling came on a Tamil Nadu Generation and Distribution Corporation (TANGEDCO) order dated October 6, 2020, through which it has withdrawn the necessity for builders to have a CC to apply for power connections.

 

Details provided in Completion Certificate

Among the many details provided in a completion certificate are:

  • Details of the land.
  • Every detail about the building plan.
  • All details about the builder.
  • Approved height of the building.
  • The location of the project and its distance from other buildings in the nearby area.

See also: Real estate basics: What is an Occupancy Certificate?

In essence, a completion certificate assures the concerned authorities that a property satisfies all the requirements set by them and adheres to the building plan that was authorised, before the construction began. It also assures home buyers that the property is safe to live in and will have a regular supply of water and electricity.

It is also possible for a developer to obtain a provisional completion certificate, if they need to hand over the building/apartment to the home buyer when there is some work yet to be done. However, this certificate is valid only for six months, after which the developer needs to apply for the final certificate, once the construction is complete.

 

Provisional completion certificate

In cases where a majority of the work at the project is done and offering possession to buyers becomes important, a provisional completion certificate is issued to the developer. This document is typically valid only for a limited period, within which the builder must finish the pending work and apply for the completion certificate.

 

Importance of a completion certificate for home buyers

It is not advisable to take possession of a new property that does not have a final completion certificate. Without a valid certificate, a project or a building is deemed to be illegal and can, therefore, invite penalties or even eviction from the property. In cases where the developer has not obtained the completion certificate yet, a buyer can approach the local municipal authorities individually, or form a residents’ welfare association (RWA), to ensure that the process is completed before they take possession of their properties.

In the recent times, the authorities have allowed residents to take possession of partially completed housing projects, especially in projects that have been stuck for a long time and where completion is possible in a phased manner.  This has been commonly seen in housing projects of insolvent builders such as Amrapali and Unitech.  In such a scenario, taking possession of the unit is alright, because it is being done on the order of the authorities concerned.

 

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