Occupancy Certificate conundrum: Paper problem for highrises in Bengaluru

Occupancy Certificate continues to be crucial for a completed building, while most builders do not get it for their projects due to violations

The Bruhat Bengaluru Mahanagara Palike (BBMP) cancelled the Occupancy Certificate (OC) of a 2,000-flat apartment complex in north Bengaluru, saying that the No-objection Certificate (NOC) of the fire department was fake. Later the BBMP clarified that the documents were incorrect and the OC will be re-issued if the correct documents are submitted.

Amid this cat-and-mouse game between the project promoter and the BBMP, the buyers suffer, with no guarantee that the building is habitable and their investment is safe.

An Occupancy Certificate is a document that certifies that a building is completed according to the approved plans and meets all the safety and quality standards, and is a proof of the building being habitable.

Some common factors for a project not getting the OC are lack of proper documentation, non-compliance with building regulations and sanctioned plans, and not getting the required NOCs from the agencies.

In Bengaluru, the OC is issued for a completed project by the local municipal corporation (BBMP) or the Bangalore Development Authority (BDA).

An OC is also proof for the buyer that the property is free of structural defects. A property not having an OC is an indication of noncompliance with building codes, bylaws, and other violations. A fake OC also means the same thing, with an added burden of corruption.

In case of problems related to structural problems or noncompliance with safety norms, the buyers have no recourse if they start living in the building before getting the OC. The resale of the property can also be a problem.

The BBMP claims to have introduced stricter measures for the issuance of OCs including more inspections and checks. However, it is anybody’s guess how the perennially short-staffed civic authorities can implement their own checks and balances. Today there are too many properties that have no OC, but no one has definitive data on this.

BBMP, BDA issue ‘Partial OC’

Courts have held time and again, the most recent being a Supreme Court judgment in January, that builders are should pay the maintenance charges (which run into thousands of rupees per flat every month) until the project receives OC. However, gullible homebuyers are in a hurry to occupy or use the homes bought by availing of home loans.

This results in other problems. Dhanajaya Padmanabhachar, the coordinator of Karnataka Home Buyers Forum, says, “Today BDA and BBMP are issuing Partial Occupancy Certificates (POC) and builders ask the homeowners to pay the maintenance fee for projects with POC. This kind of certificate is given as an exception, but the exception is becoming a norm these days.”

One such POC says that the builder has to get clearance from the Bangalore Electricity Supply Company (Bescom), the fire department, BWSSB and airport authorities. “The builder has to follow the plan and the municipality has to certify that the building has followed all the norms and is ready for occupation. What is the use of POC when none of this exists? Who are they favouring?” he asks.

The central Real Estate Regulatory Act (RERA), introduced to protect home buyers, does not recognise POCs. But the Karnataka RERA rules have introduced the concept of POC for building under construction, thereby diluting the Act, says Padmanabhachar.

No clarity in BMRDA limits

Residents of a 23-storey residential project in Mandur Grama Panchayat limits falling under Hoskote Planning Authority, which houses 2,400 families, came to know about many violations in the project when they tried to get OC. Apart from many environmental violations, the builder was unable to get the NOC from the fire department. The project does not even have a permanent electricity connection.

However, the project got a Completion Certificate (CC) in 2012 from the panchayat, which says that the project has been built as per the plan. The panchayat modified the certificate to read Occupancy Certificate, in 2017, after the residents started demanding OC. Thus, the building now has the OC even though the fire safety of the building is not proven.

This is just an example of what is happening in the areas outside BBMP and BDA limits, covered by various planning authorities under the Bangalore Metropolitan Region Development Authority (BMRDA). Areas surrounding Bengaluru are covered by many such planning authorities under BMRDA, which are fast-expanding to cater to the housing and commercial needs of the population exploding in the city.

Who has to issue the OC to a building of three or more floors in BMRDA jurisdiction is a riddle. A BMRDA official said the planning authority sanctions plans, but the BMRDA act does not mandate the planning authorities under it to provide OCs, and it is the Panchayat that has to issue the OC.

An official from a panchayat falling under the Hoskote Planning Area said they do not provide the OC to highrise buildings anymore. However, an official from Nelamangala Planning Authority said the OC is the responsibility of the local body — either the municipality or the village panchayat.

Anil Kalgi, founder president of Bangalore City Flat Owners' Welfare Association and an RTI activist, says who has to issue the OC for projects in BMRDA limits is not defined clearly. He points to an old circular which empowers Public Work Department (PWD) engineers to issue OCs for all projects falling under the BMRDA region. “Planning authorities cannot issue OC. The village panchayats or municipalities can issue OC only for buildings that have a maximum of two floors. The chief engineer of the concerned PWD sub-division must give OC,” he adds.

Still, since there is a lack of clarity, the problem continues. “I have seen “OCs” given by panchayats, but the content states that this is not a formal OC, but assumes all other applicable laws have been complied with, and for any violations builders are responsible,” says Raghunathan K C, a member of Justice for Home Buyers in Karnataka.

Losing relevance?

Having an Occupancy Certificate (OC) is a requirement inside BBMP limits to get A Khata, which is one of the proofs of the ownership of a property. Thousands of buildings have no OC and no A Khata inside BBMP limits.

“All buildings where there is no Khata, they can get B Khata and continue to sell the property, continue to pay taxes to the government, but the building could be illegal, have deviations, and may not possess OC,” says Padmanabhachar.

An OC was considered crucial for many other purposes, as it was mandatory to obtain essential services like water, electricity, and sanitation connections. However, various provisions have diluted these rules today.

Without Occupancy Certificate, a permanent water and sewage connection cannot be given by Bangalore Water Supply and Sewerage Board (BWSSB). However, in the interest of residents’ welfare, BWSSB issues water and sewage connections to such buildings. Until they provide OC, residents have to pay a 50% penalty along with the BWSSB bill. An official said there were too many buildings that pay this penalty to BWSSB, but refused to provide the data.

The OC was compulsory for electricity connections according to the rules so far. However, three months ago, Bescom did away with this requirement as per the Energy Department’s directions, said an official. Now a highrise can get a permanent electricity connection without OC.

‘Not a proof of complete safety’

Nagesh Aras, a civic activist from Bellandur, avers that despite having an OC, a building typically can have several deficiencies with respect to fire and life safety rules as defined in the National Building Code.

“For example, all shafts need to be sealed on every floor to prevent vertical spread of fire, and the basement must be designed to deal with fire hazards and to prevent the fire from spreading to the staircase. In addition, strict design rules apply to STPs to prevent the accumulation of dangerous gases, he says. Such life-threatening situations are never checked by municipal authorities before issuing OC as they are not on the checklist.

He says that the OC is issued on the basis of NOCs from various agencies such as fire services, BWSSB, etc. None of those NOCs have acceptance and rejection criteria. As a result, if a highrise has an OC, it does not automatically guarantee that the building is safe to occupy.

‘Bylaws outdated’

Rahul Pai, joint managing director of an asset management firm based in Bengaluru, says that the problem starts in many cases due to “outdated bylaws” and the refusal of the administrations to let the city grow vertically. “FSI as per BBMP rules is very less. The lack of land availability and strict rules force most small and medium builders to cut corners, as they want to make the project profitable,” he adds.

“One would expect big builders to follow all the norms, but they have their own targets to meet and temptation to deviate. However, the impact is on buyers. Violations may make the resale of the properties a problem. Hopefully, the current problems are an eye-opener for builders to be careful in the future. It’s a question of their brand integrity, as many of the big builders are listed companies,” he says.