Commencement Certificate – Meaning, Importance

Buying a home is exciting, but navigating financial and real estate terms can be challenging. It also requires an in-depth understanding of prevailing laws, dealing with countless documents, and more to ensure you follow the necessary procedures. A crucial document in this process is the commencement certificate. 

A commencement certificate is a central document in real estate. It signifies the official start of any construction project and is generally issued by a local municipal authority. It confirms that the builder has obtained all the required permissions and is following regulations. In this article, we look at what a commencement certificate means, its importance, how to apply, and the documents required to obtain one. 

What is a commencement certificate?

A commencement certificate is a vital legal document typically issued by government bodies to real estate developers before they can start construction on properties. It indicates that the upcoming project complies with the necessary laws and safety regulations. Buyers must receive this document from the developer before buying their new home, which can help them avoid legal or compliance-related issues later. 

Most certificates have indefinite validity if the builder adheres to the necessary regulations. However, depending on the locality and authority, they may have certain specified time limits. In some jurisdictions, individuals may also be able to apply for extensions or renewals in case of construction delays. 

What are the functions of a Commencement Certificate?

A commencement certificate for building is essential for any project, including housing, since developers cannot proceed with their construction in each phase unless this document has been obtained. Some other functions of commencement certificates include: 

1. Legal safeguard

The Commencement Certificate is a legal safeguard for buyers, protecting them against legal action if the construction project violates any regulations. 

2. Approval for loans

Most financial institutions require this certificate before approving documents necessary for home loans. It assures the lender that the project meets legal requirements and lowers the risk involved in lending. 

3. Ensures safety and legal requirements 

The Commencement Certificate indicates that the upcoming construction project meets all legal prerequisites, including land use, construction norms, structural integrity standards, fire safety regulations, and earthquake resistance requirements. 

4. Marketability

Building projects that have valid commencement certificates are more marketable since buyers prefer properties that have legal clearances. This helps mitigate potential legal risks and ensures that the transfer of ownership is seamless.

Who can apply for a commencement certificate? 

A commencement certificate is usually issued to real estate developers working on construction projects. Developers or builders with sanctioned plans for their properties are eligible to apply for commencement certificates. 

What documents are required to apply for a commencement certificate?

Before applying, developers must get their building plans approved and obtain the necessary licenses. The documents required to obtain a commencement certificate include:

• Application form: This form must be submitted to the relevant local authority. 
• Building plan approval: After completing an application form, developers must submit architectural plans, layout plans, and elevation drawings that adhere to the required regulations and building codes. 
• Land ownership documents: Legal proof of land ownership is necessary for construction. This includes ownership affidavits like title deeds.
• No Objection Certificates (NOCs): Builders must provide NOC documents from health, water, fire, and sanitation departments. 
• Other documents: Some other documents include the latest tax-paid receipts and photographs. 

Why should a buyer know about the commencement certificate? 

New homeowners must check with their developers and ensure they have this document before purchasing a property. Through the commencement certificate, RERA protects the buyer from unsafe and illegal constructions. No purchase should be finalised without the commencement certificate. 

The commencement certificate is also crucial to the complete set of property papers. It is especially important when financing your purchase, as lending institutions thoroughly verify this document when calculating home loan interest rates.

How do you check a Commencement Certificate online?

Homeowners or potential buyers can find and verify commencement certificates online using the following steps:

• Visit the local authority’s website, which issued your commencement certificate. Look for the section titled “Certificates,” “Services,” or “Building Permits.” Commencement certificates are typically located here. 
• Select the option for commencement certificates and click on the option to check its status. This may be labelled “Verify Certificate” or “Check Status.”
• Enter the necessary details, including the project name, certificate number, and applicant details, and click submit. 
• This will display the status of your certificate. If there are discrepancies, it is essential to contact the necessary authorities for clarification. 

Wrapping up

Before purchasing a new property or home, buyers must be well-informed and equipped with the necessary information and documents. This can help to streamline the purchasing process. If you want to purchase a new home, using a home loan can help you finance it easily. 

Tata Capital offers home loans with long loan tenures, attractive interest rates, an easy application process, and flexible financing. For expert guidance and information regarding home loans, visit the Tata Capital website, or download the app today!