Possession Certificate and Its Importance

A possession certificate, also known as a land possession certificate, is used to confirm and legalise your ownership of real estate. It formally acknowledges the transfer of property from one person to another and grants the buyer complete ownership rights. This official document attests to the efficient handover of ownership of a piece of property from a seller to a buyer. It is likewise a prerequisite for a home loan. The buyer has no power or rights over the property without this certificate.

Let's understand in depth the meaning of possession certificate, who issues it, the documents required to acquire it, as well as the steps to obtain a possession certificate.

What Is A Possession Certificate?

The possession letter, also called the land possession certificate, is one of the most important documents that a seller of real estate hands over to a buyer of real estate. A possession certificate serves as evidence that the ownership interest in the property has been transferred legally. However, you need to obtain an occupancy certificate to prove that you are the property's legitimate owner.

Who Issues The Possession Certificate?

A Tehsildar (in rural areas) or a Revenue Divisional Officer (RDO) (in urban areas) often administers it. This certificate can be used by homebuyers to get a home loan from a financial institution.

After getting the possession certificate, however, the home buyer sometimes issues a conditional possession certificate. It is typically given when the buyer is dissatisfied with the upkeep or condition of the property. This could involve complaints about defaced construction, unfinished work, or revisions that were not included in the original agreement.

Consequently, a certificate of conditional possession enables you to put a condition on the ownership of the property.

Documents Required For Possession Certificate

The records listed below must be provided in order to acquire the certificate. This list could vary depending on the state.

• Copy of a registered lease or selling deed
• Application-related identification and signature proof, such as Ration Cards and Aadhaar Cards
• Income certificate
• Income certificate proof
• Proof of property ownership
• Copy of the certificate of encumbrance
• Photos of a building or property
• Passport-size photographs (two)

Importance Of A Possession Certificate Concerning Home Loans

A possession certificate ensures that ownership of a piece of property is successfully transferred. You might go into legal trouble if you don't. Being a wise buyer, it is essential that you obtain this certificate in your favour while purchasing a home. The buyer has no control over the property without any formal certification or registration documents, and the builder legally retains ownership of the property. The builder also has the legal right to have the occupant removed in this situation with the support of civil authorities.

Without a Possession Certificate, a bank or financial institution may be hesitant to approve a home loan for the property, as it may be considered a higher risk investment. When applying for a home loan, most banks and financial institutions require a copy of the Possession Certificate as part of the documentation. This is to ensure that the property is legally constructed and that the borrower will not face any legal issues related to the property in the future.

Additionally, some banks also require that the Possession Certificate be issued before the disbursal of the home loan, as it serves as an assurance that the borrower will be able to occupy the property soon after the loan is disbursed.

Additionally, the certificate entitles you to tax deductions. However, the local municipal party will consider your ownership of the property to be unlawful if you don't have this certificate.

How To Get Ownership Certificate?

Step 1: Pick up an application form at the Right to Public Service (RTPS) or Anchaladhikari office that is most convenient for you.

Step 2: Complete the application form with the necessary information.

Step 3: Deliver the completed form to the appropriate office.

Step 4: Gather the application number and acknowledgement receipt.

A fee must be paid by the buyer in order to receive a land possession certificate. This varies from state to state and fluctuates according to the applicant's income bracket. Normally, the certificate is issued within 7 working days of the application process's beginning and post-verification. The verification process is carried out by the concerned officer within the jurisdiction.

Moreover, you can check the status of your possession certificate for land using these two ways:

1. Visit the state's e-district website, select Transaction History, enter your application number, and the status of your application will be displayed.

2. The official state-wise website itself is the second option to check the status. When you log in to your account, you can check the progress of your applications directly from the homepage. You may check the status there by entering the application number.

However, it's important to note that the process may vary depending on the state and local government authority, so it's always a good idea to check with the local authorities for specific requirements and processes. Checking the status of the application through the state's e-district website or the official state website is a common way to track the progress of the application and to know when the possession certificate will be issued.

Conclusion

A possession certificate formally acknowledges the transfer of property from one person to another and grants the buyer complete ownership rights. The buyer has no power or rights over the property without this certificate.

If you don’t own a possession certificate for land, it may hamper your chances of obtaining a successful home loan sanction. We, at SMFG Grihashakti, provide home loans up to INR 5 crores* at attractive interest rates with flexible repayment terms. You can check your estimated EMI through our online EMI calculator for home loans and read through our interest rates. Apply now!