Key Legal Terms Relating to Real Estate that you Must Know!

Owning a flat involves a lot of legal formalities. In general, every individual is able to buy only one dream home and a major portion of his life savings and earnings goes in that. So it's best that all the legal documents are properly read and understood before entering into any legal formalities. But the legal terms are not very easy to understand by a layman. So in this article, we try to explain certain important legal documents and their importance that needs to be checked so that they don’t land up into any trouble in future.

Land Possession Certificate: The Land Possession Certificate (LPC) is a document that is required before shifting to any flat or building. This land possession certificate cannot be received without having the building completion certificate. So the next question is what is the building completion certificate?

Building Completion Certificate: When a building is completed, the builder can apply for the Building Completion Certificate. If the building is completed as per the approved plan then the authorities will issue the Building Completion Certificate. If the building is not completed as per the approved plan then the authorities will not issue Building Completion Certificate. After receiving the building completion certificate, the builder can issue the possession certificate to the flat owners.

It is not advisable to buy a building without the land possession certificate. Because if the builder has not constructed the building according to the plan then the authorities might declare it as illegal and you might lose your money.

Partial Occupancy Certificate: A builder can issue a partial completion certificate but it has a validity of only 6 months. When a building is constructed in blocks with different completion dates then it might issue a partial completion certificate. And when the whole building is complete the building completion certificate needs to be obtained. As a buyer of a real estate property, it is advisable to always obtain building completion certificate even if the builder is a renowned name.

Importance of Completion Certificate and Possession Certificate: The completion certificate and possession certificate are very important. Here are a few of the importance listed.

•    To get the income tax benefit on the home loan, possession certificate is required to be shown.

•    A property without the possession certificate is considered as illegal and you might be required to vacate the property without any compensation.

•    You might even face issues in getting various connections such as electricity, water, sewage etc.

•    Selling even the best properties in India is impossible without the completion certificate or the possession certificate.

With the real estate business at a boom in India, you might be lured to buy when the property rates in India are at a lower side. But don’t fall a prey for buying without the possession certificate.