In other words, a completion certificate is a document that is awarded, after the inspection of a real estate project, stating that it has been constructed according to the approved building plan and that it meets all the necessary standards set by the local development authority or Municipal Corporation. A completion certificate contains all the details about the building, including the location, identification of the land, details about the developer/owner, the height of the building and the quality of materials used. It also states whether the project has been built according to the building plans and in accordance with the rules and regulations set by the local municipal authority, including the distance from the road, distance maintained between neighbouring buildings and so on. In many states, a completion certificate is necessary, for the developer to obtain water and electricity connections to the property.
- Completion Certificate is applied to the local municipal body when the construction of the building is complete.
- The construction must be completed as per the approved plans by the municipal authorities who would include safety standards, other standard regulations like environmental clearances, flight safety clearance (Height of the building, alarmed lighting for aircraft on top of the building etc), rainwater harvesting wherever required, the distance from the road etc.
- A Completion Certificate is not enough to make your property legal for occupation without obtaining an Occupation Certificate and to get Occupancy Certificate, you need Completion Certificate.
The builder has to apply as per RERA to obtain the building completion certificate. The local civil bodies or Municipal authorities grant these certificates to the builder. However, if the builder fails to do the same the final home buyer must apply themselves. Without a valid certificate, a project or a building is deemed to be illegal and can, therefore, invite penalties or even eviction from the property. In cases where the developer has not obtained the completion certificate yet, a buyer can approach the local municipal authorities individually, or form a residents’ welfare association (RWA), to ensure that the process is completed before they take possession of their properties.
Laws related to Completion Certificate are as follows:
Kolkata Municipal Corporation Act, 1980:-
Section 403 deals with Completion Certificates. Section 403 states that(1) Every person giving notice under section 393 or section 394 or every owner of a building or a work to which notice relates shall, within one month after the completion of erection of such building or execution of such work, deliver or send or cause to be delivered or sent to the Municipal Commissioner a notice, in writing, of such completion accompanied by a certificate in the form specified in the rules made in this behalf and shall give to the Municipal Commissioner all necessary facilities for inspection of such building or work.
(2) No person shall occupy or permit to be occupied any such building or use or permit to be used any building or a part thereof affected by any such work until permission has been granted by the Municipal Commissioner in this behalf in accordance with the rules and the regulations made under this Act.
Provided that if the Municipal Commissioner fails, within a period of thirty days of receipt of the notice of completion, to communicate his refusal to grant such permission, such person may make a representation in writing to the Mayor.
The Kolkata Municipal Corporation Building Rules, 2009:-
As per Rule 28 – (1) Within fifteen days of the receipt of notice of completion of building work, the Municipal Commissioner shall inspect the building or work and shall satisfy himself that the erection or the execution of the work has been completed in accordance with completion plan.
(2) Within ten days of inspection, the Municipal Commissioner shall, if he is satisfied that the building or work has been completed in accordance with the completion plan issue a completion certificate in the form as specified in Schedule XIII.
Provided that such certificate shall not be issued in the case of building or any work for which provisional sanction was given unless the applicant produces before the Municipal Commissioner the license or permission in accordance with sub-section (3) of section 396 and documents recording compliance of the terms and conditions of such provisional sanction.
(3) After due verification, one set of the building plan as submitted under rule 27 shall be returned to the applicant with the endorsement “Approved Completion Plan”, under the signature of the Municipal Commissioner.
(4) In case where the Completion Certificate is refused, the Municipal Commissioner shall communicate the reasons thereof in writing to the applicant within a reasonable time of inspection under sub rule (1) above.
(5) In case where in the opinion of the Municipal Commissioner the building or the work has not been completed in accordance with the completion plan he may take necessary action in accordance with the provisions of the Act and rules.
(6) The Municipal Commissioner shall not permit connections to be made to municipal water mains and municipal drains from any new building in respect of which Completion Certificate has not been issued.
Provided that the Municipal Commissioner may permit connections to be made in respect of a building where Partial Completion Certificate or Block wise Completion Certificate has been issued as per provision of rules 29 and 30.
Provided further that the Municipal Commissioner may order disconnection of such connections if he is of the opinion that the conditions of the Partial Completion Certificate or Block wise Completion Certificate are being violated or if further erection of the building or execution of the work is proceeding contrary to the sanctioned plans.
Rule 31 talks about Delay in issue of Completion Certificate. Rule 31 says that (1) In case where within a period of thirty days of the receipt of the notice of completion, duly completed in all respects, the Municipal Commissioner fails to issue a Completion Certificate or communicate his refusal, the applicant may in accordance with the provisions of section 403 make a representation in writing to the Mayor.
(2) The Mayor shall, after such enquiry as he may think fit, and after giving the applicant an opportunity of being heard, direct the Municipal Commissioner to issue the certificate or communicate refusal of the same to the applicant within a period of thirty days from the date of receipt of the representation to the Mayor.
Rule 32 talks about Prohibition for use of building without Completion Certificate. Rule 32 says that Subject to other law, rules and regulations for the time being in force, no person shall occupy or be permitted to occupy a building erected or re-erected or altered under the Act in respect of which a Completion Certificate under rule 28 or a Partial Completion Certificate under rule 29 or Block wise Completion Certificate under rule 30 has not been issued by the Municipal Commissioner.
Rule 33 talks about Work subsequent to issue of Completion Certificate. Rule 33 says that if any re-erection or addition or alteration of a building in respect of which an Completion Certificate has been issued is intended, fresh notice under section 393, or section 394 as the case may be, shall be necessary.
Real Estate (Regulation and Development) Act, 2016:-
Occupying a house without a completion certificate or occupation certificate is classified as an illegal activity as that house is considered as unauthorized structure by the authorities. For this reason only, when the RERA Act, 2016 was introduced and was not fully introduced till 1st May, 2017, the builders were in rush to get their Occupancy certificates so that the ongoing real estate projects do not come under the ambit of the RERA Act,2016 provisions.
The whole intent of the RERA Act, 2016 for its applicability is to protect the consumers through the construction period of the project.
As per Section 2 (q) of the RERA Act, 2016, “completion certificate” means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan, and specifications, as approved by the competent authority under the local laws.
As per Section 3 of the Act – “No promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, in any planning area, without registering the real estate project with the Real Estate Regulatory Authority established under this Act.
Provided that projects that are ongoing on the date of commencement of this Act and for which the Completion Certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act.”
As per Section 11 (4) (b) of the Act – “The promoter shall be responsible to obtain the Completion Certificate or the occupancy certificate, or both, as applicable, from the relevant competent authority as per local laws or other laws for the time being in force and to make it available to the allottees individually or to the association of allottees, as the case may be”.
West Bengal Housing Industry Regulation Act, 2017:-
Section 2 (p) of the Act states that“completion certificate” means the completion certificate, or such other certificate, by whatever name called, issued by the competent authority certifying that the real estate project has been developed according to the sanctioned plan, layout plan and specifications, as approved by the competent authority under the local laws.
Section 3 (1) of the Act talks about prior registration of real estate project with real Estate Regulatory Authority. This Section states that no promoter shall advertise, market, book, sell or offer for sale, or invite persons to purchase in any manner any plot, apartment or building, as the case may be, in any real estate project or part of it, without registering the real estate project with the Housing Industry Regulatory Authority established under this Act.
Provided that projects that are ongoing on the date of commencement of this Act and for which the completion certificate has not been issued, the promoter shall make an application to the Authority for registration of the said project within a period of three months from the date of commencement of this Act.
Section 3 (2) (b) provides that notwithstanding anything contained in sub-section (1), no registration of the real estate project shall be required – where the promoter has received completion certificate for a real estate project prior to commencement of this Act.
Section 11(4) (b) provides that the promoter shall – be responsible to obtain the completion certificate or the occupancy certificate, or both, as applicable, from the relevant competent authority as per local laws or other laws for the time being in force and to make it available to the allottees individually or to the association of allottees, as the case may be.
“Faqir Chand Gulati vs Uppal Agencies Pvt. Ltd. & Anr on 10 July, 2008 Supreme Court of India”
The appellant filed a revision petition before the National Commission. The appellant challenged the finding that the complaint was not maintainable. He also contended that as the builder had failed to secure and furnish the completion certificate and C&D forms (that is property tax assessment listing) from MCD, his complaint could not have been dismissed. He also submitted that in view of the violations, the MCD had demolished certain portions of the structure and was insisting upon the other deviations which were beyond compoundable limits to be rectified; and that MCD was refusing to issue the completion certificate and C&D forms without those rectifications; and that the prayer for delivery of completion certificate and C&D forms required the builder to rectify all defects and bring the deviations within permissible limits and secured completion certificate and C&D forms. He pointed out that in the absence of completion certificate and C&D forms, he was facing threats of demolition apart from harassment from MCD. He contended that the non-completion of building as per the sanctioned plan and making deviations on a large scale resulting in non-issue of completion certificate and C&D forms amounted to deficiency in service and therefore, his complaint ought to have been allowed.
Under the agreement, the builder is required to construct the ground floor in accordance with the sanctioned plan, and specifications and the terms in the agreement and deliver the same to the owner. If the construction is part of a building which in law requires a completion certificate or C&D forms (relating to assessment), the builder is bound to provide the completion certificate or C&D forms. He is also bound to provide amenities and facilities like water, electricity and drainage in terms of the agreement. If the completion certificate and C&D forms are not being issued by the Corporation because the builder has made deviations/violations in construction, it is his duty to rectify those deviations or bring the deviations within permissible limits and secure a completion certificate and C&D forms from MCD.
The surviving prayer is no doubt only for a direction to the builder to furnish the completion certificate and C&D forms. It is not disputed that a building of this nature requires a completion certificate and building assessment (C&D forms). The completion certificate and C&D forms will not be issued if the building constructed is contrary to the bye-laws and sanctioned plan or if the deviations are beyond the permissible compoundable limits. The agreement clearly contemplates the builder completing the construction and securing completion certificate. The agreement, in fact, refers to the possibility of deviations and provides that if there are deviations, the builder will have to pay the penalties, that is do whatever is necessary to get the same regularized. Even if such a provision for providing completion certificate or payment of penalties is not found in the agreement, the builder cannot escape the liability for securing the completion certificate and providing a copy thereof to the owner if the law requires the builder to obtain completion certificate for such a building.
A prayer for completion certificate and C&D Forms cannot be brushed aside by stating that the builder has already applied for the completion certificate or C&D Forms. If it is not issued, the builder owes a duty to make necessary application and obtain it. If it is wrongly withheld, he may have to approach the appropriate court or other forum to secure it. If it is justifiably withheld or refused, necessarily the builder will have to do whatever that is required to be done to bring the building in consonance with the sanctioned plan so that the municipal authorities can inspect and issue the completion certificate and also assess the property to tax. If the builder fails to do so, he will be liable to compensate the complainant for all loss/damage. Therefore, the assumption of the State Commission and National Commission that the obligation of the builder was discharged when he merely applied for a completion certificate is incorrect.
“Sri Mahalakshmi Housing, Chennai vs Assessee on 29 January, 2010 Income Tax Appellate Tribunal – Chennai”
In respect of the issue of the completion certificate it is noticed that the assessee has completed the building and has made the application for the completion certificate on 13-3-2006. Though initially the CMDA had not granted the completion certificate, subsequently after the direction from the Hon’ble Madras High Court, the CMDA has given the completion certificate on 13-6-208 and the compliance certificate has also been issued by the ITA 259 to 263 /10 Corporation of Chennai in December, 2007. Here one should remember that when sanction is given normally the sanction would contain a date. In the present case the certificate issued is a completion certificate that is a certificate accepting the claim of the assessee that the project has been completed, i.e. the certificate is issued on an application given by the assessee. The assessee can give an application for completion certificate only when the completion of the project is done. Thus the grant of a completion certificate after verification by the competent authority even on a subsequent date would revert back to the date on which the application is made. Thus the completion certificate having been issued by the CMDA on 13.6.2008 would in fact be a certificate accepting the claim of the assessee that the project has been completed as made in its application on 13.3.2006. Thus I am of the view that the grant of this completion certificate reverts back to the date of the application for certificate as the completion certificate has been applied for before the due date and the completion certificate having been issued by the competent authority without any qualifications, the project should be deemed to have been completed as mentioned in the application, i.e. before the due date and consequently the assessee should be held to have complied with the provisions of section 80-IB(10)(a)(ii) of the Act. Therefore, in regard to the issue as to whether the completion certificate which has been obtained after the due date but for which the application has been given before the due date should be considered as due compliance, I am in agreement with my learned brother. Accordingly, the issue No. (ii) as to whether the completion certificate which has been obtained after the due date but for which the ITA 259 to 263 /10 application had been given before the due date should be considered as due compliance is held in favour of the assessee.