“Commencement Certificate” and “Completion Certificate” – Important RERA Judgments

Aditya Pratap is a lawyer practicing in the Bombay High Court. He can be reached at aditya@adityapratap.com

Introduction to The Real Estate (Regulation and Development) Act, 2016

The Real Estate (Regulation and Development) Act, 2016 is an Act of the Parliament of India which seeks to protect home-buyers as well as help boost investments in the real estate industry. The Act came into force from 1 May 2016.

It is therefore a fundamental source of employment and economic growth, and a major contributor in addressing two critical challenges of our time, mainly providing livable and functioning cities for a growing urban population and reducing the environmental footprint of the built environment

The Purpose of RERA, 2016

Following are some motives and resolutions taken by RERA, 2016-

  • To establish the Real Estate Regulatory Authority for regulation and promotion of the Real Estate sector.
  • To ensure transparency in projects.
  • To protect the interest of consumers in the Real Estate Sector and to establish an adjudicating mechanism for speedy dispute redressal.
  • To provide proper information about the Builder.
  • Provide recommendations to appropriate Government on in matters relating to the development & promotion of real estate sector.

Legal overview of Commencement Certificate under RERA, 2016

As per Section 2(m) of the RERA, 2016, commencement certificate means the commencement certificate or the construction permit, issued by the competent authority to allow or permit the promoter to begin the development works on immovable property, as per the sanctioned plan.

As per Section 4(2) (c) of the RERA , 2016, while filing an application for the registration of the project, the promoter shall enclose an authenticated copy of the approvals and commencement certificate from the competent authority obtained in accordance with the laws applicable for the real estate project. A construction without this certificate shall be considered illegal and may attract penal proceedings. Therefore, must be aware of asking for this certificate before investing in any property as it indirectly questions your legal title to that property.

This certificate is basically issued in 2 stages- first up to the plinth area and then finally for the superstructure. After the results of the inspection conducted by the Town Planning and the Engineering departments and finally holding the required licenses and sanctions from the concerned departments, the certificate is issued.

Legal overview of Completion Certificate under RERA, 2016

As per Section 2 (q) of the RERA, 2016, completion certificate means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan, and specifications, as approved by the competent authority under the local laws.This is applied to the local municipal body when the construction of the building is complete.

The construction must be completed as per the approved plans by the municipal authorities which would include safety standards, other standard regulations like environmental clearances, flight safety clearance, rainwater harvesting wherever required, the distance from the road etc.

A Completion Certificate is not enough to make your property legal for occupation without obtaining an Occupation Certificate. The Occupancy certificate is issued by local municipal authorities or the building proposal department once the building has been completed and is ready to be occupied.

Relative Judgements under RERA, 2016

  • Suresh V Swamy v/s Larsen & Turbo Limited

The customer has filed complaint before the authority against the promoter for getting interest on his investment on promoter’s failure to hand over the possession of his booked flat.

It has been held that, the RERA authority is having jurisdiction over the project even though the project has received Occupancy Certificate. Because, the registration granted under Section 5(3) of RERA, 2016 shall be valid for a period declared by the promoter under sub-clause (C) of clause (1) of sub-section (2) of section 4 of RERA, 2016 for completion of the project.

  • Ashok Sheshagiri Purohit Vs. Hubtown Limited

The present complaint was filed alleging the respondent that the date of possession as stipulated by the said agreement was March 2013 and that the Respondent has failed to handover possession of the said apartment till date. Therefore, he prayed the Respondent be directed to pay him interest for the delay as per the provisions of section 18 of the Real Estate (Regulation and Development) Act 2016.

The authority has directed the respondent to handover the possession with Occupancy Certificate to the complainant before July 31, 2019, failing which the Respondent shall be liable to pay interest as per the rule 18 of the Maharashtra Real Estate (Regulation and Development) Rules, 2017 to the Complainant from August 1, 2019 till the actual date of possession, on the entire amount paid by the Complainant to the Respondent.

  • Pankaj Agarwal & Anr. v. DLF Gurgaon Home Developers

In this case, the builder had raised floors without any intimation to the home buyers. On complaint of the alleged act, CCI was of the view that the builder held a position of dominance in the relevant market of services and made a stern advisory remark that it was the duty of DLF Developers to disclose that it proposed to increase the number of floors and apartments, so that the allottees could have taken valid objections to it.

About the Author – Aditya Pratap

Aditya Pratap is a lawyer practising in Mumbai. He argues cases in the Bombay High Court, Sessions and Magistrate Courts, along with appearances before RERA, NCLT and the Family Court. For further information one may visit his website adityapratap.in or view his YouTube Channel to see his interviews. Questions can be emailed to him at aditya@adityapratap.com.

Cases argued by Aditya Pratap can be viewed here.

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