Completion Date vs Possession Date: What is the Difference?

Suppose in your search for a home, you come across ads for 2 BHK flats in New Panvel ready possession or something similar. For the uninitiated, a term like ‘ready possession’ might be confusing, as many properties for sale also list terms like ‘completion date’. How do these two important dates affect your rights and obligations as a buyer? 

The terms ‘completion date’ and ‘possession date’ are fairly common to those who purchase real estate property in India. Simply put, they pertain to the status of the property that you are considering purchasing. So, what exactly do they mean, and how do they differ?

Here are seven differences between the completion date and possession date as per Indian real estate laws and practices.

1. Definition

The completion date is the date when the construction of the property is completed as per the approved plan and specifications. Hence, by the given completion date, a certain property will be completely constructed. The possession date is the date when the buyer can take physical possession of the property from the seller or developer. This is the official date by which you will be able to move into your new property and do with it as you will. 

2. Legal status

The completion date is determined by the local authority or the competent authority that issues the completion certificate or occupancy certificate for the property. The possession date is determined by the agreement between the buyer and the seller or developer, and may vary depending on the terms and conditions of the contract.

3. Payment

The completion date is usually linked to the final payment of the property price by the buyer to the seller or developer. The possession date is usually linked to the payment of stamp duty, registration charges, maintenance charges, and other dues by the buyer to the seller or developer.

4. Transfer of ownership

The completion date is not necessarily the date when the ownership of the property is transferred from the seller or developer to the buyer. The ownership transfer happens only when the sale deed is executed and registered in favour of the buyer. The possession date is usually the date when the ownership transfer takes place unless there is a delay in registration or any dispute between the parties.

5. Risk and liability

The completion date is the date when the risk and liability of the property shift from the seller or developer to the buyer. This means that after the completion date, any damage or loss to the property due to natural calamities, fire, theft, vandalism, etc., will be borne by the buyer. The possession date is also the date when the risk and liability shift from the seller or developer to the buyer, unless there is a clause in the agreement that states otherwise.

6. Delay and compensation

The completion date is often subject to delay due to various reasons such as shortage of labour, materials, funds, approvals, etc. The buyer can claim compensation from the seller or developer for any delay in completion as per the agreement or as per the Real Estate (Regulation and Development) Act, 2016 (RERA). The possession date can also be delayed due to various reasons, such as non-payment of dues, non-compliance of formalities, litigation, etc. The buyer can claim compensation from the seller or developer for any delay in possession as per the agreement or as per RERA.

7. Remedies

The completion date is a statutory requirement that has to be complied with by the seller or developer. If they fail to do so, they can face legal action from the buyer or RERA. The buyer can also cancel the agreement and seek a refund of their money with interest. The possession date is a contractual obligation that has to be fulfilled by both parties. If either party fails to do so, they can face legal action from each other or RERA. The buyer can also cancel the agreement and seek a refund of their money with interest.

Conclusion

These are some of the major differences between the completion date and possession date in Indian real estate. As a buyer, you should be aware of these dates and their implications before signing any agreement or making any payment. Having adequate knowledge about the completion and possession date of a property under consideration will not only let you make an informed purchase decision but also plan your finances as well as preparation for shifting better. Normally, all properties for sale mention the completion or possession date for the sake of all prospective buyers. 

You should also consult a legal expert if you have any doubts or queries regarding these terms. In many cases, this is often the best resort as it will let you make a purchase decision with the utmost clarity of details.