Commencement Certificate

A commencement certificate is a RERA-approved document issued to developers by local municipal authorities. This mandatory document certifies that the builder has fulfilled all the legal requirements. It is proof that the construction has the required clearances from the government.

The commencement certificate validates that there are no pending dues against the property. It also contains a list of all the floors/units in the building. If a floor/unit is not mentioned in the certificate, then it might be illegal or under dispute. While it is a mandatory requirement for the builder, how does it affect you?

Here are some reasons why a commencement certificate is essential:

• Serves as a proof that the project can begin only after the developer receives the certificate

• Helps avoid potential pitfalls like delays in construction and so on

• Deems the construction as legal, preventing you from facing any potential lawsuits

• Speeds up your home loan approval and disbursement processes

Also, check if the certificate consists of the required floor-level permissions. If not, then the status of the floor may be disputed.

For instance, the authorities may approve the construction of a set number of floors. However, the builder constructs additional floors without the permit. If the floor is constructed without the required approval, it would be illegal. By checking the certificate, you ensure that the property you buy is legal. This eliminates the risk of legal issues in the future.

Before you initiate the application process, check whether your project meets the norms set by the local authorities. Consider gathering proofs for the same. To apply for a commencement certificate, developers can follow these simple steps:

• Fill out and submit the online application form to the local authorities

• Provide the project schedule, relevant NOCs, and other essential documents as requested

• Schedule a date for site inspection. The local authorities will assess whether the project complies with the regulatory requirements

• Pay the fee as requested

If all the prerequisites are met, a commencement certificate is issued in 2 phases. The first is for construction up to the plinth area and the second is for the superstructure. The developers must maintain compliance even after getting the certificate. These are valid only for a limited period of time. Thus, it is essential to renew them from time to time.

Before the property’s inspection, builders must submit some documents. Once all the paperwork is submitted, the relevant departments will begin their inspection. Here is the required list of documents.

• Latest tax receipt

• Approved building plan

• Property ownership documents 

• NOC from the local fire, water, sanitation, and power department

• Photographs of the construction area

• Fee payment receipt 

• Pictures of the structures

• An expert engineer’s certificate that affirms the structure’s stability

The local authorities can ask for extra documents as per the area's laws and regulations.

The validity of the commencement certificate can vary depending on the state. However, generally, a certificate is valid for about 2-3 years. To ensure compliance with the laws and regulations, the builder must renew the certificate regularly. 

Continuing construction with a certificate past its validity can put the builder in legal jeopardy. The authorities can claim the construction after the validity expiration as illegal. This may cost the developer their reputation, as well as affect the sales of the building. For buyers, this can make getting home loan approval challenging. 

Lenders are less likely to approve the application if the certificate is invalid. Moreover, they may put the whole process on hold until the builder renews the certificate. This would delay the disbursement and the buyer’s access to funds. Subsequently, the construction of property is affected.

A commencement certificate is not an optional procedure. Every owner should check for this and other documents before buying the property. It is an assurance to the buyer that the property they are investing in is safe from any legal or economic dispute.