What is an Occupancy Certificate?

An occupancy certificate is a document issued by the local authority that confirms the building complies with approved plans and regulations. Occupying a building without this certificate is illegal, which could result in eviction, municipal penalties, or even demolition. Additionally, the lack of an occupancy certificate could lead to significant safety risks, such as electrical or structural hazards.

While the municipality may grant temporary permission to occupy the building before issuing the certificate, such permission is typically short-term and subject to strict conditions.

Dispute Over Occupancy Certificate

In one case, buyers purchased a property from a deceased estate. After moving in, they discovered that while the building plans were approved 30 years ago, no occupancy certificate had been issued. The municipality then ordered them to vacate and threatened to demolish the building, citing missing compliance certificates.

The buyers requested that the executor of the estate obtain the occupancy certificate, but she refused. The buyers then sought a court order to compel her to do so, arguing that the sale agreement’s clause requiring “vacant possession” implied that a valid occupancy certificate was necessary.

The High Court ruled in favor of the seller, determining that there was no legal obligation to provide the occupancy certificate. The court found that the buyers had received “vacant possession” as per the agreement and had not inquired about the occupancy certificate during the sale process. The court also noted that the buyers had other legal options to obtain the certificate themselves.

Key Considerations for Buyers

• Insist on the Certificate: Before making an offer, ensure the seller provides an occupancy certificate.
• Include in Sale Agreement: Add a clause requiring the seller to furnish the certificate before transfer.
• Check Compliance: Verify all necessary compliance certificates are in place to avoid legal and safety issues.

Conclusion

This legal case underscores the importance of obtaining an occupancy certificate when purchasing property. Buyers should take proactive steps to ensure they receive this document to avoid potential legal and safety problems.