• Buying a property that does not have OC/CC certificate

Hi All,

I am looking to buy a property in Bangalore. I have converged to buy a flat, which has satisfied me in terms of locality, vaastu and many more. But the builder is refusing to provide OC/CC certificate as the flat has some deviation from approved plan of BBMP. 

My concerns,
1. What all problems will arise if there is no OC/CC cert. ?
2. Approved plan is to have 4 floors and the builder has built an extra 5th floor which deviates from the approved plan, if I buy a flat in 3rd floor, will it be a problem?
3. Most of the PS banks including SBI is issuing Loans on the property, I beileve this rules out the litigations involved in the site, please correct me if I am wrong.
4. Why hasn't govt. made OC/CC cert. mandatory for registration, as its not mandatory for registration why will it be a problem to sell a flat without oc/cc?
5. Flat's which obtain OC/CC cert. are being sold at higher price, close to 20lacs more than the one which doesn't possess Oc/CC, which I am not able to afford. Please advise.
6. Builder has clearly told that if akrama-sakrama law to be enforced, All residents should pay the fines and get it regularised, and he is not responsible for it.
7.How problem is it to sell/mortgage such a flat in future? if banks are giving loans why cant they mortgage the same property?
8. how to calculate the % deviation from the approved plan?

looking forward for your valuable answers.

Thanks and Regards,
Nischay
Asked 1 year ago in Property Law from Bangalore, Karnataka
Religion: Hindu
1) if building has no OC it would imply building had not been constructed as per sanctioned plans 

2) Muncipal corporation can demolish unauthorised construction 

3) don't. Purchase the third floor flat

4) banks are reluctant to give loans to flats in buildings which don't have OC /Cc

5) in some states registration of sake deed cannot be done on absence of OC / CC

6) builder has to regularise unauthorised construction and pay penalty not flat owners 

7) it is difficult to sell such flats in buildings which don't have OC 
Ajay Sethi
Advocate, Mumbai
23316 Answers
1220 Consultations
5.0 on 5.0
My answer to your queries are;
1) Without a OC/CC certificate from builder, the building will not be issued 'A' Katha certificate but will only get a FORM-B Property tax register extract from BBMP.
Nationalized banks will not fund such project without OC/CC certificate.
2) Approved plan for the building is only 4 floor, and if your flat is on the 3rd floor then the 5th floor becomes a deviation and a gross illegal structure, the corporation can demolish this illegal structure anytime. It will not affect your purchase of the flat on the 3rd floor.
3) If Public Sector or Nationalized banks have approved the Project and are funding the purchase it is indeed good to proceed and yes definitely rules out the litigations involved in the said project.
4) The govt makes it mandatory for issuance of the OC/CC for all project through the BBMP, however the builders do not comply with the approved plan 100% as such building with such deviations has become a norm these days. It is not a problem to sell or buy flats without OC/CC for such projects.
5) Purchase of such flats without OC/CC should not be looked at as an obstacle but the problem can be  resolved by getting a Katha certificate from the BBMP.
6) He is correct to that extent.
7) It will not be difficult to sell such properties,
8) From a civil engineer, he can assess the deviation.
Kiran N. Murthy
Advocate, Bangalore
765 Answers
51 Consultations
5.0 on 5.0
A. OC /CC is the mandatory document to occupy the premises once the construction is completed. You will not have marketable right and title over the property unless obtained the same. And OC would be considered as Driving License to run your vechile.

B. BBMP has the power to demolish the unauthorized construction which is not approved the same in the approved plan. Therefore, if you purchased the flat in 3rd floor that will not affect your right. However, it is very complicated and tricky question because it is left to discreationery power of the local authority.

C.Mere the bank loan approved for the project that would not be consider that no litigation over the project.

D. Yes, you are right, the government must pass a law for the purpose of OC AND CC is mandatory at the time of registration. However, sometimes, builder register the flat before the completion of the construction. Hence, OC will be applicable after the completion of the construction.

E. Akrama and Sakrama still pending before the Hon'ble High Court of Karnataka. Hence, dont take any risk based on assurance given by the builder with respect to deviation.

F. Generally, upto 5% deviation would be allowed while issuing of OC. However, morethan deviation would be liable to impose penalty and as such, oc will be issued subject to discreationery power of the local authority. You can contact any civil engineer to calculate % deviation over the project by comparing the approved plan.
B.T. Ravi
Advocate, Bangalore
736 Answers
30 Consultations
5.0 on 5.0
1. Without OC the possession cannot be delivered. A building which does not have OC can be demolished in accordance with the law by the civic authorities. The courts are also loath to issue a stay order in favour of the owners and against the civic authorities in such cases.

2. Buying a flat in 3rd floor should not be a problem if 4 floors are sanctioned.

3. Issuing loans does not rule out action by the civic authorities. It is generally seen that banks issue loans without carrying due diligence. There have been many cases where, in spite of sanction of loans by the banks, the property became the subject matter of litigation.

4. You will not get a good price for the property if it does not have the OC certificate. 

Ashish Davessar
Advocate, Jaipur
18167 Answers
449 Consultations
5.0 on 5.0
1. What all problems will arise if there is no OC/CC cert. ?
The authorities may not sanction OC hence the property is liable to legal action namely demolition etc., 


2. Approved plan is to have 4 floors and the builder has built an extra 5th floor which deviates from the approved plan, if I buy a flat in 3rd floor, will it be a problem?
Once there is a deviation, the authorities will decide to demolish and in that action if your third floor is also damaged what is your claim it against the authorities irresponsible attitude.


3. Most of the PS banks including SBI is issuing Loans on the property, I beileve this rules out the litigations involved in the site, please correct me if I am wrong.
The bankers go by the documents produced before it and not the physical verification to confirm deviation if any (owing to the gratitude received)


4. Why hasn't govt. made OC/CC cert. mandatory for registration, as its not mandatory for registration why will it be a problem to sell a flat without oc/cc?
Registration is different department and granting OC is by some other department which do not have any interconnection.


5. Flat's which obtain OC/CC cert. are being sold at higher price, close to 20lacs more than the one which doesn't possess Oc/CC, which I am not able to afford. Please advise.
If there is a risk involved give a second thought of buying it.


6. Builder has clearly told that if akrama-sakrama law to be enforced, All residents should pay the fines and get it regularised, and he is not responsible for it.
Now itself the builder is washing away his responsibilities then in the event of demolition by the competent authorities in the later stage the builder will not be available to give any answer or compensation to the loss suffered. 


7.How problem is it to sell/mortgage such a flat in future? if banks are giving loans why cant they mortgage the same property?
It is the discretion of bank and it differs from one bank to another. 


8. how to calculate the % deviation from the approved plan
Consult a local architect and get the details. 
T Kalaiselvan
Advocate, Vellore
14105 Answers
127 Consultations
5.0 on 5.0
1. The flat for which OC/CC has not been availed/issued is treated as illegally constructed and is liable to be demolished, You do not what the Govt. will decide in future for the said unauthorised construction,

2.   Find out if there are other deviations also. Normally it is expected that the authority will demolish the deviated part of construction only,

3.No. Since the PSU Banks are providing loans for buying the said flat, it does not confirm that there will be no litigation on the said property for the said reason of not getting OC.CC,

4. Your proposal tat no flat without OC/CC should be allowed to be registered is very good but there us a strong builder's lobby who will not allow it and will influence the govt against such proposal,

5.  The very fact the flats having clear OC/CC is priced much higher than the flats having no OC/CC proves that the legal status of those unauthorised constructions is not strong. It will be your choice whether you will take the said risk or not,

6. If all the residents pay the fine, then the actual cost of the flat will b increased substantially. In that case it will be prudent on your part to buy a flat having clear OC/CC paying the right price for it.  
Krishna Kishore Ganguly
Advocate, Kolkata
12127 Answers
233 Consultations
5.0 on 5.0
In your case the fifth floor is constructed illegally. Now a days the builders used the short cut method for regularising  illegal construction like akrama-sakrama schemes. But in the event of demolition of fifth floor or illegal construction done by the builder by the competent authority the buyer will suffer. So there is a risk factor is emerging in this deal .Banks are sanctions loan only after the scrutiny of mortgaged documents  
Ajay N S
Advocate, Ernakulam
1916 Answers
19 Consultations
5.0 on 5.0

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