You are not alone in this plight. Thousands of homeowners are facing a similar quandary. Statistics say that nearly 10,000 buildings in Bengaluru, including 50% of apartments built after the Karnataka government introduced transfer of development rights (TDR) in the city in 2005, do not have OCs.
In many cases, though the building plans are approved, OCs are denied due to other violations. Obtaining an OC is a requirement under the Karnataka Apartment Ownership Act, 1972. The law says one cannot legally move into a building unless the developer gets an occupancy certificate from the BBMP or BDA. The corporation can ask apartment owners to leave such illegally occupied flats or impose heavy penalties.
But it's not as easy as it seems, considering the quantum of violations, nexus between civic officials and builders and a lack of stringent laws. Many errant builders and developers have, over the years, gone scot-free, say those familiar with the working of the sector.
There are several examples of builders disappearing without giving OCs and legal water connections to housing complexes. Apprehensive of losing their homes, buyers who've invested hard-earned money move into their flats and make do with water from pumps and water tankers.Following a real estate boom, unscrupulous builders began construction without approved plans, in an effort to increase profits. This not only broke down the system, but also fuelled corruption."
A buyer can move into his/her new apartment only once the occupancy certificate (OC) has been received. It is illegal to move into a flat or house without receiving the occupancy certificate.
The builder might not have sold all the flats in the complex. In such a situation, the builder is often reluctant to obtain occupancy certificate. If the builder has not constructed the complex based on the approved plan, then there is a chance that the builder might not be able to obtain occupancy certificate.
The owner of the flat can be forced to evict the flat in case he/she does not have occupancy certificate.
Occupancy certificate is also required when the buyer applies for Khata. However, note that the occupancy certificate is not needed for registration of the property during purchase. This often leads buyers to believe that the occupancy certificate is not important. However, when such a buyer tries to apply for Khata, he/she will face problems obtaining it. Note that this Khata will definitely be requires in case the owner plans to sell the flat sometime in future. There is also a chance that the electricity and the water connection could be cut to the flat if the owner does not have the occupancy certificate.
Once the house is purchased, used and then resold at some later date, the new buyer shall demand OC. The new buyer might also intend to buy the flat on loan. In such circumstances, unless you have an OC for your flat, there is a high chance that the new prospective buyer might not be able to get a loan and consequently, be unable to buy the property.
Hope all your questions have been properly answered with the information provided above.