Buying a property is on the minds of many. However, a buyer should be aware of the various legal documents involved in the overall property ‘buy and sell’ process. A possession certificate or possession letter is one such important document. This legal document confirms the successful transfer of possession of a property from the seller to a buyer. It is also one of the requirements for home loan. Hence, once a buyer decides to buy a property, he/she needs to ask for this certificate. With more to it, this article will help explore all the key details about a possession letter and how to obtain it.
What is a possession certificate?
A possession certificate refers to a legal document that a property seller has to produce in the name of the buyer (new owner). The seller officially transfers all sold property rights to the new owner once the possession certificate is issued.
It is an important document that states key facts like a description of the property, the date of possession, and the name of the new owner. Also, it specifies the final payment timeframe, which the new owner must abide by. It is a mandatory requirement for getting a home loan, implying that the buyer must have the home loan possession certificate while applying for a home loan. Likewise, when claiming income tax deductions on a home loan, this certificate is a requirement.
Without the possession certificate, the new owner’s property is considered illegal, leading to legal repercussions like a penalty.
Who issues a possession certificate?
In the urban areas, Revenue Divisional Officers (RDOs) issue the document. In the rural sector, the certificate is issued by the local tehsildar.
Conditional possession letter
A conditional letter can be issued to the buyer when they are completely satisfied with the property particulars. This could relate to poor construction, unfinished work, and so on. Under such circumstances, the buyer can submit their complaints/grievances to the builder/seller along with thecertificate. The builder/seller would have to make the needed changes. If they fail to do so, the buyer has the right to take a legal course of action in court.
A possession certificate is proof that an interest in the property has been transferred legally. However, a buyer can be termed as the legal owner of the property once he gets an occupancy letter issued by local authorities. They certify the letter stating that the construction on the property is completed as per the approved plan, with adherence to local laws, and is ready to be occupied.
The occupancy letter is thus a mandatory certificate that confirms the ownership and right to the property. Without this letter, the property is deemed illegal by the local municipal body.
A buyer should get both the certificates in order to have possession and ownership of the property, respectively.
Documents required to acquire possession letter
To obtain the certificate, the key documents mentioned below need to be furnished. This list could differ between states.
- Registered lease/sale deed agreement copy
- Identification and signature proofs for applicants, such as Aadhaar Cards and Ration Cards
- Income Certificate
- Property/Land Tax paid till date proof
- Ownership of property proof
- Certificate of encumbrance copy
- Passport-size photographs (2)
- Property/building photographs
How to obtain a possession certificate?
The procedure for obtaining a certificate could differ between states. For example, follow the below procedure to obtain a land possession certificate:
- Visit the nearest Anchaladhikari or Right to Public Service (RTPS) office to get the application form or
- Download the form online from the official website of Revenue and Land Reforms
On downloading the form,
- Fill all the required particulars against the designated fields
- Attach all the necessary documents
- Submit the duly filled application at the designated office
- Post submission, the applicant will receive an acknowledgment receipt and a tracking status number
The buyer must pay a fee when obtaining a land possession certificate. This varies between states and is also proportional to the applicant’s income group. Normally, on initiation of the application process and post-verification, the certificate is issued within 7 working days. The concerned officer within the jurisdiction conducts the verification process.
A possession certificate is a key legal document to be furnished by a property seller to the new owner. If a buyer does not possess this certificate on buying a property, then it is considered illegal. They may even have to pay penal charges. Also, without having a home loan possession certificate, buyers may find it difficult to get their home loan sanctioned. For more detailed information on requirements for a home loan, visit Tata Capital for getting customised home loans at attractive interest rates.