It is possible to get a bank loan without the CC, if it is a property under construction. If it is a completed building, then the bank uses its discretion before approving the loan. Since there are so many government department and agencies involved in issuing the OC, sometimes there is a delay.
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“Though it is wrong, hundreds of families live in buildings without the CC. The housing society can be formed without OC. The rule by the tribunal is a practical one as it allows a letter by the housing society to show possession of the property, instead of going strictly by the rule book,’’’ Limaye says.
In the absence of a CC/OC, services provided by the local authority, such as water, sewerage, etc are charged higher. So, residents in such buildings end up paying more taxes.
Some reasons for a delay in issuing CC/OC could be a query raised by the local authority and not answered by the developer. Or some violation such as construction of the building not as per the plans submitted for approval. Or incomplete submission of documents by the developer.
In case of old buildings, there was no requirement for CC/OC. And developers of such societies may no longer be active. So, that could be another problem.
“It is the developer’s responsibility to get the CC/OC. And it is interest of the residents and housing society to ensure it is done as it enhances protection for the members. Societies too can file for it in case developer does not do it,’’ Limaye says.
In some cases, a dispute between local authorities (such as the Brihanmumbai Municipal Corporation and Maharashtra Housing and Area Development Authority or MHADA in case of Mumbai) could be one reason why a CC is not issued, says Arvind Rao, a Mumbai-based Chartered Accountant. The building may have received No Objection Certificates from other agencies like fire brigade, and the BMC itself. Since the structure is complete, residents start staying in the building. “This particular case could be more of an exception and cannot be considered as rule. In normal circumstances, CC is a must,’’ he says.