What is Possession Certificate and How To Get It?

Buying a property in India has certain rules and regulations and along with it it also has the need to acquire some documents. One such important document is the Possession Certificate. It is an important document which acts as a proof that the property has been sold to the seller or bought by the buyer. It is also important paperwork when applying for a Loan Against Property or LAP from a lender. Read this blog below where we will discuss Possession Certificates and how you can apply for it in India.

What is a Possession Certificate?

Let's decode Possession Certificate meaning. It is an official document which ensures the legal transfer of property ownership from a builder or seller to the buyer. This is an important part of the document list when buying property as it serves as a solid proof that the buyer has taken possession of the property after meeting all legal and financial obligations.

You can get the certificate from the Revenue Department for land purchases or by the local municipal authority for residential or commercial properties. Many lenders also ask for the Possession Certificate when you are securing an LAP from them. Without this certificate, property disputes may arise in the later years, and legal ownership may become a troubled situation.

Importance of Possession Certificate

The certificate is essential for many several reasons. These are:-

• Legal Proof of Ownership: To prove that you are the legal owner of a property, you need the certificate with you.
• Essential for Property Loans: When securing an LAP, these documents will play a major role in loan approval. Lenders often ask for this document when approving the loan.
• Prevents Legal Disputes: It can help you stay away from any legal disputes that include ownership rights.
• Required for Resale: In case you want to resale the property, you will need the certificate to prove ownership.
• Mandatory for Occupancy Certificate: A Possession Certificate for house is a prerequisite for obtaining an Occupancy Certificate, which is required to legally reside in the property.
• Helps in Property Tax Assessment: Generally, any local authority can ask you to submit these documents as it helps with property tax assessment.

Also Read: Loan Against Property: All You Need to Know

What are the Types of Possession Certificates?

There are different types of Property Possession Certificates based on the nature of the property. Here are the most common ones:

• Land Possession Certificate: Issued by the Revenue Department, this certificate confirms that the buyer has taken possession of a piece of land.
• Flat Possession Certificate: Given by builders or municipal authorities, it proves that an apartment or flat has been legally handed over to the owner.
• Commercial Property Possession Certificate: This Property Possession Certificate is issued for commercial buildings, offices, and retail spaces, confirming legal possession.
• Government-Allotted Property Possession Certificate: Issued when a property is acquired through a government scheme, ensuring rightful ownership.

Difference Between a Possession Certificate and an Occupancy Certificate

Many people confuse a Possession Certificate with an occupancy certificate. Here's how they differ:

Also Read: 9 Factors Which Impact Your Eligibility For Loan Against Property

Documents Required for a Possession Certificate

To apply for a Possession Certificate, the following documents are commonly required:-

• Sale Agreement between the buyer and seller
• Property Tax Receipts to verify legal compliance
• Identity Proof such as Aadhaar Card or PAN Card
• Address Proof such as utility bills or rental agreement
• Encumbrance Certificate to confirm no legal dues on the property

How to Get a Possession Certificate for a Loan Against Property?

If you are applying for a Loan Against Property or LAP, having a Possession Certificate is essential. Here's how to obtain one:

• Visit the local municipal office or revenue department where the property is registered.
• Submit an application along with necessary documents, including the sale agreement and identity proof.
• Pay the applicable processing fees as per state regulations.
• Wait for verification and approval, which may take a few days to weeks.
• Receive the Possession Certificate, which can be used for legal and financial purposes.

Also Read: Features and Benefits of Loan Against Property

Conclusion

During property buying or selling, you need to have a Possession Certificate. This is an important piece of the document list when getting a property in your name. It identifies that you are the legal owner of the property. Furthermore, you will also need the certificate when applying for a Loan Against Property from Hero FinCorp. When you have it handy, you are sure to experience smooth loan approval, any security against legal hurdles. Ensure you have this certificate and maintain your ownership.

Frequently Asked Questions

1. What is Proof of Possession?

Proof of possession refers to documents that establish ownership of a property, such as a Possession Certificate, Sale Agreement, and Property Tax Receipts.

2. What is the use of a Possession Letter?

The use of a Possession Letter is majorly with the builder and the buyer. It is issued by the builder and given to the buyer that proves that the property has been handed over to the buyer.

3. Who issues the Possession Certificate in India?

The Revenue Department issues it for land purchases and the local municipal authority or builder for residential or commercial properties.

4. Can a Possession Certificate be transferred to a new owner?

Yes, when a property is sold, the new owner can obtain a fresh Possession Certificate by applying to the local authorities with relevant documents.

5. How do I claim possession of a property?

To claim possession, ensure that all legal and financial obligations are met, obtain a possession letter from the builder, and apply for a Possession Certificate through the relevant authority.

Disclaimer: The information provided in this blog post is intended for informational purposes only. The content is based on research and opinions available at the time of writing. While we strive to ensure accuracy, we do not claim to be exhaustive or definitive. Readers are advised to independently verify any details mentioned here, such as specifications, features, and availability, before making any decisions. Hero FinCorp does not take responsibility for any discrepancies, inaccuracies, or changes that may occur after the publication of this blog. The choice to rely on the information presented herein is at the reader's discretion, and we recommend consulting official sources and experts for the most up-to-date and accurate information about the featured products.