Campa Cola mess: Why occupation certificate is so crucial

Residents of Worli’s Campa Cola Compound may have got a relief from the Supreme Court for the next seven months but if buyers are not careful about legal procedures and approvals, they may suffer the same fate as these residents. So the only way to avoid the horrors of living in an illegal structure is to do a thorough due diligence before finalising your property deal when you buy a ready to move in property or a property through the secondary market.

In the case of Campa Cola, the municipal corporation had not granted an occupation certificate (OC). This means residents did not have a valid certificate from the municipal body.

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The BMC had allowed construction of six stories but the developers - PSB Construction, Yusuf Patel and BK Gupta - built 16 to 20 floors.

The BMC then issued notice to the builders to stop work after it found irregularities in construction. The builders finished their work after paying the fine. The flats were subsequently sold and buyers occupied the flats.Interestingly, the buyers never demanded for an occupancy certificate from the builders, neither did they get one voluntarily from them. It was only after that they became aware of the illegal status of their flats that they became worried.

[caption id=“attachment_1225291” align=“alignleft” width=“380”]  Campa Cola resident[/caption]

The only way to avoid a Campa Cola-likesituation is to be careful while purchasing a flat. Consider this scary data: Almost one out of two buildings cleared to come up in the city does not have an occupation certificate.

According to a recent_ Times of India_report data accessed by activist Anil Galgali using the right to information (RTI) Act shows that in the last nine years 13,313 proposals were cleared but OCs were issued for merely 6,888 buildings in Mumbai.

Scarier still is that the BMC itself does not know how many buildings have OC. “A senior Civic Official confessed that Corporation does not have any up-to-date data. He further added that the civic body does not have a system in place to track the developers who violate rules and hand over possession to buyers without first procuring the mandatory Objection Certificate,” a legal expert told_Firstpost_on condition of anonymity.

What is an occupation certificate and why it is important:

An OC is accorded to the builderby the local civic body once construction of a buildingis completed and the compound is ready for inhabitation. It states that the building is a legal construction and has all the approvals from the various government authorities. It is illegal to occupy a building without this document.

Without an OC, civic amenity will be provided to the building only on humanitarian grounds, which means you will have to double the amount for water. Moreover, if you are owner of an apartment, which does not have an OC, resale will be jeopardy. Therefore, buyers should demand the builder to provide them a copy of the certificate before taking the possession of the apartment.

“Without the occupancy certificate, it is difficult to get the water and sanitary connection. Banks and financial institutions do not sanction loans against the flat unless this is not issued by the concerned authorities. If the flats are occupied by the buyers without it, the Mumbai Municipality can evict them or have heavy penalties levied on them,” said Dilip Shah, who counsels on housing-related issues in Maharashtra.

The OC also specifies the type of building - free-standing, terraced, cluster complex, town house complex, apartment or commercial building.

It is against law to sell a property without a full set of approved plans / planning permission from municipal council and an OC.

Issuance of an OC with a huge delay should also serve as a warning bell, says Shah. This could mean that there are issues with the building.

However, buyers cannot shirk their responsibility to do a proper background check of the developer and his track record before buying a property. They must also check whether the building is according to the sanctioned plan and the amenities provided are according to the sale agreement for as per the law, one cannot enter a flat or building without receiving a no-objection certificate.

“In case of Campa Cola, the conduct of the builder deserves to be noticed. He knew it fully well what was the permissible construction as per the sanctioned building plans and yet he not only constructed additional built-up area on each floor but also added an additional fifth floor on the building which was totally unauthorised. Probably he thought that he would be able to either escape the clutches of the law or twist the arm of the law by some manipulation.The municipal laws permit deviations from sanctioned constructions being regularised by compounding but that is by way of exception. Unfortunately, the exception, with the lapse of time and frequent exercise of the discretionary power conferred by such exception has become the rule,” Shah added.

Only such deviations deserve to be condoned which are bona fide or are attributable to some misunderstanding or are such deviations as where the benefit gained by demolition would be far less than the disadvantage suffered. Other than these, deliberate deviations do not deserve to be condoned and compounded, he told Firstpost.