Commencement Certificates Unveiled: The Lesser-Known Essentials of Starting Your Construction Project Right

With the introduction of India's revolutionary online real estate platform, Blox, buying a residential property is no longer a stressful process. It is time for the average home buyer in Mumbai to sit back, relax, and use advanced technology to locate and buy real estate from some of the city's best, most reputed developers. However, it is essential to undertake due diligence and verify the land titles, permits, and certificates necessary to make a wise investment. One of these documents is the commencement Certificate. Let us delve deeper into the subject and see why this certificate is important for both the developer and the home buyer.

What is a Commencement Certificate?

One of the first tasks the builder undertakes is acquiring the land or the plot in a neighbourhood or a suburb with good infrastructure and growing housing demand. When this is done, the project is planned by drawing up plans and getting them approved. There are a number of clearances to be obtained by the developer before construction work is undertaken. This includes NOC (no objection certificates) from the PWD, fire, and sanitation departments.

The most important among the clearance documents to be applied for before construction is the Building Commencement Certificate or the Construction Commencement Certificate. It is a document issued by the local civic body or the municipal corporation. The certificate proves that the building plans have been approved and the appropriate clearances received. It details the location and the scope of the project and authorises the builder to undertake work for a specified period.

Why is a Commencement Certificate important?

If you are a builder/developer –

• As a developer, you must obtain all the necessary permits and clearances before you embark on construction work. The Commencement Certificate authorises you to begin work. Without this, your work may be halted, and you may also attract a fine.
• The commencement certificate is one of the important documents that must be submitted while applying for completion and occupancy certificates. These are important documents that are required for the sale of your property to the homebuyer to be legally valid.
• The commencement certificate has a validity period and gives you a deadline for completing the building process.

If you are a homebuyer –

• When you set out to buy a property, the project must have all the clearances and permits. The plans must be authorised, and the construction must be undertaken with the authorisation of the local municipal corporation. The commencement certificate verifies these.
• The commencement certificate is a mandatory document required to obtain the completion certificate and utility connections such as water, drainage, and electricity.
• This certificate verifies that the developer's plans are in compliance with the National Building Code of India, which is designed by the Bureau of Indian Standards (BIS). This is essential for the safety and well-being of the residents.
• When you approach a bank or an NBFC for a home loan, the application must be accompanied by property documents, including the construction commencement certificate. Without this and valid construction permits, your home loan application for this project may be turned down.

Fast-track system for obtaining Commencement Certificate 

Historically, the process of constructing a building or residential project has always taken a lot of time. If you invest in a property during the pre-launch phase, you may have to wait for 3 to 5 years until you finally get possession of your new home. Several municipal corporations across the country have introduced a fast-track system for issuing commencement certificates to help real estate developers speed up their construction process and simplify the paperwork involved. This system reduces the time to obtain a Commencement Certificate from 60 days to just 24 hours. The Pune Municipal Corporation introduced the one-day certificate issuance system in Maharashtra in 2014. The Municipal Corporation of Greater Mumbai (MCGM) has an online system for application and downloading the certificate.  

Things to keep in mind – 

• If you are a builder or developer, you must learn more about the eligibility for the fast-track application process for the commencement certificate.
• It is important to embark on construction work only if you have the commencement certificate.
• As a homebuyer, you will require the commencement certificate to apply for utility connections for your home. You must obtain a copy from the developer and verify the certificate from the website of the local municipal corporation.