Possession Certificate

The possession certificate is also known as a possession letter. It is one of the key documents that a property seller gives to the property buyer. It is usually given by a Tehsildar (in rural areas) and Revenue Divisional Officer (RDO) in urban areas. Homebuyers can use this certificate to secure a home loan from a financial institution.

A possession certificate is proof stating that the interest in the property has been transferred without any illegal activities. However, to confirm that you are the legal owner of the property, you must acquire an occupancy certificate.

It is issued by the local authorities stating that the property has been constructed as per the local laws and the construction is complete as per the approved plan. The certificate establishes that the property is ready for occupation. It is a mandatory document to affirm your ownership of the property. If you fail to get the certificate, it can lead to local authorities deeming the property as illegal.

Contents of the Possession Certificate

The certificate contains the following things such as the description of the property and the required add-ons like parking space, garage, etc. as agreed upon in the contract of sale. The Possession Certificate should be written and be authentic. It should also mention the date of possession of the property. 

Conditional Possession Letter

There may be circumstances in which you have accepted the property's possession, but you are not happy or satisfied with the condition of the property. In such a situation, a buyer can accept a conditional possession letter in which all the conditions that need to be fulfilled by the builder will be mentioned.

You can provide all the details in this letter with which you are not satisfied and ask the builder or seller to make necessary changes as per the agreement. If the builder fails to comply with it, then you have the right to take this matter to court.

Difference between Possession Certificate & Occupancy Certificate

The possession certificate states only the completion date. It does not make you the rightful owner of the property. It is issued by the local authorities, which says that the construction of the property is completed, and it is ready to be occupied. It is the occupancy certificate that gives the right of the property to you.

Rights of a Possession Certificate Holder

  • It gives the complete authority on the property to the buyer.
  • The buyer also holds the full rights to resell the property.
  • The buyer has the advantage of doing any enhancement or raises the property value.
  • The buyer can rent out the property and obtain profits from the same.
  • The seller of the property can claim no benefits on property.
  • Until the seller declines to accept the delivery of the property, the buyer has a charge on it. They can ask the seller for the money paid in anticipation of the delivery of the property.
  • The buyer is also entitled to receive the reimbursement of the money to impose the specific performance of the contract, where the seller has not delivered the property.
  • The purchaser has the right to obtain details related to the plans approved by the respective authority, the schedule of the same type, the entire structure plans, along with other relevant documents.

Documents required

To obtain the Possession Certificate, you need to produce the following documents-

  • Copy of sale deed agreement
  • Identification and signature proof of the applicant
  • Certificate of encumbrance
  • Copy of registered sale agreement