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You can avail the benefit of HRA as well till the date you have actually occupied the rented house. Hence both the deductions can be claimed in the same financial year. The possession date is an important part of a real estate contract, and defines when you can legally move into your new home. Depending on the terms you negotiate with the seller, you may move in immediately after closing or after a certain period of time. Work with your agent to set a possession date that protects your interests while still meeting the sellers needs.
However, it usually involves many kinds of documents, including a possession certificate. This article will help you learn the meaning of a possession certificate, the types of possession certificates, and how it differs from an "occupancy certificate." If you are planning to get a home loan, you will need a possession certificate. On the other hand, if you don’t have this certificate, your possession of the property will be considered illegal by the local municipal party.
What is a certificate of title?
Closing day (sometimes called the “completion date”) is the date when the buyer pays the seller for the home and the title transfers from the seller to the buyer. It’s a common question for buyers, and one that plays an important role in a real estate transaction. The possession date — or what you might refer to as your move-in date — must be agreed upon by both you and the seller. The last thing you want is to show up with your moving truck only to find the seller still cozying up in your new living room.
Reluctantly, and at an additional expense, the seller changed her moving day to meet the buyers' demands. A homebuyer’s possession date might not come until the deed has been recorded, which could be weeks after closing. The purchaser has the right to obtain details related to the plans approved by the respective authority, the schedule of the same type, the entire structure plans, along with other relevant documents. The buyer can rent out the property and obtain profits from the same. While they’re often used synonymously, possession and ownership are precisely not the same thing. Founded in 1976, Bankrate has a long track record of helping people make smart financial choices.
What is the purpose of possession certificate?
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However, to confirm that you are the legal owner of the property, you must acquire an occupancy certificate. The document that a builder issues to the buyer while granting possession of the unit, is also known as the possession letter. In this instance, the term possession would mean that you have the possession of the property at that particular time. In this case, when a builder issues a possession letter to a buyer, the document acts as a testimony of the transfer of the possession of the property. A possession letter by a builder to the buyer signifies that the property title and its physical possession now lies with the buyer. A possession letter is a document that mentions the date within which the buyer will have the possession of his under-construction home.
Date of Possession definition
If, on the other hand, you’re the lender then maturity dates tend to be a lot more fun. In this case, your loan’s maturity date means that the borrower has to repay you your principal, plus any interest owed. The certificate contains the following things such as the description of the property and the required add-ons like parking space, garage, etc. as agreed upon in the contract of sale.
In a real estate transaction, possession occurs when the buyer or renter takes control of a property after signing closing documents or the lease. After the sale is recorded with the local government and the purchase funds have been received by the seller, ownership of the property is also transferred to the buyer. With later possession dates, or those that are 30 to 90 days after closing, the buyer may offer a lease-back agreement to the seller (also called a post-closing possession agreement). This means the buyer leases the home back to the seller for a certain period of time after closing at an agreed-upon price.
Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. Bankrate follows a strict editorial policy, so you can trust that we’re putting your interests first.
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy. Whatever amount is agreed upon, put it in writing, and execute a rental agreement to protect all parties. The amount is negotiable, and there is no real reason it needs to be based on the buyer's principal, interest, taxes, and insurance .
Jena is passionate about empowering people to find their dream homes and making the home-buying process a delightful one. Possession can be delayed for a number of reasons, such as a buyer financing issue or the property currently housing a tenant. Buyers can work with an agent to reset the possession date where needed. In seller's markets, buyers will often give sellers several days to move. This is to gain an edge in the event the seller receives multiple offers.
It means the new buyer or renter is officially given the right to occupy and use the property. They typically receive the keys to the property when possession is transferred. The possession date is the day a buyer is entitled to move into their new home. Usually, the buyer and seller agree on a possession date when they’re negotiating the real estate contract.
Yes, you need to provide the possession certificate to claim tax benefits. Different states have different procedures for obtaining a land possession certificate. For illustration purpose, let’s see how it works in the state of Bihar.
It’s issued by the Tahsildar in the rural areas and RDO in the urban areas. The certificate also consists of the timeline within which the buyer has to make the final payment. Conversely, when renting property — like a home or an office — you have possession of it for the period of time specified in your lease, but you never take ownership of it.
A possession certificate is a document that states that someone has the possession of the property in question. While the terms possession letter and possession certificate are interchangeably used, both are sometimes used to mean two different things. Though the timeline varies from state to state, once you submit the application form a verification will be conducted under the supervision of the concerned officer. If everything goes right, upon verification you will usually get the possession certificate within 7 days. On the other hand, an occupancy certificate is issued by the local authorities stating the completion of the project and that the building is fit to be occupied. There are a few common reasons a buyer may not be able to move in on closing day.
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