• A possession certificate verifies the transfer of the legal possession of a property.

• The types of possession certificates include conditional possession certificate, occupancy certificate, land possession certificate, house possession certificate, and builder-issued possession certificate

Are you planning to buy a new home and apply for a Home Loan? Prima facie, the process may seem straightforward. However, it involves several legal procedures and documentation. As a first-time homebuyer, you must be aware of all the documents required during the process of buying and selling a property.

One such document is the property possession certificate (also known as the possession letter). While often overlooked, this document plays a crucial role in the Home Loan approval process. This blog will help you understand the possession certificate's meaning, its types, significance, and the documents needed to get it. Keep reading.

What is a possession certificate?

A possession certificate is a legal document that verifies the transfer of the legal possession of a property by the seller or builder to the buyer.

A property possession certificate generally contains the following information:

• - Detailed description of the property, including size, location, etc.

• - The date of transfer of possession

• - The names of the seller and the buyer

• - Mutually agreed payment terms

Types of possession certificate

Possession certificates in India can be categorized into the following types based on their purpose and the issuing authority:

1. Conditional possession certificate

A conditional possession certificate is issued to the buyer when they have concerns regarding the property’s condition or construction. It could be due to poor construction quality, unfinished work, and so on. In such a situation, the builder or developer must make the necessary rectifications, or you can take legal action against it.

2. Occupancy certificate

An occupancy certificate signifies that the construction of a building or property is complete as per the approved plan and is ready for occupancy. This document confirms the buyer’s rightful ownership of a property.

3. Land possession certificate

The local revenue department issues a possession certificate for land to verify the legal possession of a land or plot. This document is necessary for mutation, tax assessment, apartment construction, and plot resale.

4. House possession certificate

A possession certificate for a house substantiates that a homebuyer has taken possession of a housing unit or an apartment. This document is essential for property registration and securing Home Loans.

5. Builder-issued possession certificate

A builder may also issue a possession certificate to validate property handover upon full payment. This document is necessary to obtain an occupancy certificate from a government body.

How to obtain a possession certificate?

The general steps for applying are the same across various states in India, the exact procedure, specific requirements, and the authorities involved may vary. The general process requires you to fill out a house possession certificate application form, submit the required documents, and pay the requisite fee.

A possession certificate is a vital document for homebuyers. It establishes their rights and ownership over property and plays a crucial role in the Home Loan approval process.

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