All About Commencement Certificate In Real Estate

List of documents required for obtaining a Commencement Certificate

For obtaining a Commencement Certificate, the developer is required to submit the application for Commencement Certificate along with some documents mentioned below:

Make sure to carry all the documents in order to obtain the Certificate of Commencement without any hassle.

Steps to obtain a certificate of commencement

Are you wondering about the process of obtaining the Certificate of Commencement? If yes, then you don’t need to wonder anymore as we are here with a step-by-step guide on how you can obtain a Commencement Certificate without any issue.

Step 1: The builder or developer must submit the plan of the real estate project to the concerned local authority as government officials will conduct multiple preliminary checks and inspect the entire property. All this is done to make sure that the project is completely fit for commencement.

Step 2: In addition, with the project plan, the No Objection Certificate or NOC received from multiple government offices is required to be submitted to the local authority. The developer is also required to show proof of having obtained clearances from all the relevant departments like water, fire, electricity, or sanitation.

Step 3: The Commencement Certificate is issued to the developer in 2 stages- firstly, up to the plinth area and secondly for the superstructure.

The developer receives the Commencement Certificate on the basis of the findings of the inspection done by the engineering and town planning departments. After obtaining all the necessary licenses and sanctions for the real estate project, the developer lays the foundation of the superstructure and starts building the boundaries of the project.

As per the updated RERA guidelines, a valid Commencement Certificate is a mandatory document for a real estate project to be considered as RERA-approved.

Significance of Commencement Certificate for a house buyer

Every document or certificate in the real estate world holds some significance to both the buyer and owner. It is always vital to cross-check all the documents before you finalize the deal of buying a property. A failure to do so may cost you a fortune later.

Although the certificate of Commencement is obtained by the developer it still holds a lot of significance for the house buyers as well. Until a developer obtains the Certificate of Commencement for initiating the real estate project, he is not authorized to begin the construction work. Therefore, a house buyer must not invest in such a project that is not yet legalized by the local authorities.

A home buyer must always examine and confirm whether the Commencement Certificate that the developer has includes the floor on which he/she wishes to purchase a property. If in case, you were ready to buy a property in a real estate project that does not have a valid Commencement Certificate then you come into the risk of being the owner of the illegal property. This thing not only affects your legal title to the real estate property but also demands you to pay the related fines for buying an illegal property.

Just like Occupancy and other related certificates, a Commencement Certificate is crucial as it makes sure that a buyer is purchasing a property that has met all the legal formalities. It secures your title over the property and protects you from all possible legal risks in the upcoming future.  

Apart from this, listed below are some of the other reasons why obtaining the Commencement certificate from the developer is important:

How is a Commencement Certificate different from other related certificates?

Most of the time, it is often seen that the homebuyers, especially the beginners, repeatedly confuse the Commencement Certificate with other related certificates like Encumbrance Certificate, Occupancy Certificate, and much more. However, there is a difference between all of them. So, if you are also new in the journey of buying a home and want to know the difference between all these certificates then this section has got you covered.

Here, we have differentiated the Commencement Certificate with 3 other certificates namely Occupancy Certificate, Encumbrance Certificate, and Completion Certificate.

1. Commencement Certificate Vs Occupancy Certificate

The certificate of Commencement is a document issued to the developers, permitting them to start a construction project. This certificate proves the legality of the project and is essential to begin the construction of a housing project.

Whereas, the Occupancy Certificate is offered by the governing civic body or the local administration for making the owner of the property eligible for obtaining amenities provided by the local municipality. These amenities involve road, water, electricity, sewage, and sanitation.

2.  Commencement Certificate Vs Encumbrance Certificate

A Commencement Certificate is a legal document that is issued by the local Municipal Corporation, under the RERA Act. This certificate provides the permit to a developer who wants to commence a construction project. In other words, we can say that the certificate of Commencement proves the legality of the real estate project.

Conversely, the Encumbrance Certificate reveals any liabilities associated with the real estate project like existing loans. In short, an encumbrance Certificate shows that a particular project is clear of all the liabilities.

3. Commencement Certificate Vs Completion Certificate

Last but not least, the final difference that we are focusing upon is between Commencement Certificate and Completion Certificate. The Commencement Certificate is the certificate from the concerned Municipal authority permitting the builder to initiate or start the construction of the property after making sure that all set criteria have been met.

On the other hand, the Completion Certificate is a legal document that confirms whether a specific real estate property is completed or not. It also indicates that the structure of the specific property is not breaching any local regulations or laws set by the government.

This was just a brief on how a Commencement Certificate is different from other related certificates. Let’s now move ahead and get some knowledge about the updates related to the Commencement Certificate.

New updates related to Commencement Certificate

UPDATE: Redevelopment projects to be finished by MHADA within three years of acquiring Commencement Certificate.

The Maharashtra cabinet in August 2020 cleared the project to speed up the redevelopment of cessed buildings within Mumbai through Maharashtra Housing and Area Development Authority i.e. MHADA. As a consequence, if the MHADA takes up the redevelopment then it must be successfully completed within 3 years of obtaining the Certificate of Commencement. Following this update, at least 14,500 cessed buildings are set to take advantage.

How can you record the Notice of Commencement?

To record the Notice of Commencement, you must keep certain points in mind that are as follows: