The Possession Letter: What It Is, What It Is Not, and What to Check Before Signing

The possession letter is signed at the most emotional point of a purchase, usually standing up, usually in a corridor, usually after a wait. It is a short document, and almost nobody reads it, because it looks like a formality. It is not a formality. It is the record of the day several liabilities moved from the developer to you.

What a possession letter records, and what it does not certify

What it records is narrow: a named allottee, a specific apartment, and the day physical possession of that apartment was handed over. That single fact is genuinely important, because a great deal of the Act counts from it.

What it does not do is longer, and worth stating flatly.

• It is not an occupancy certificate. That is issued by the competent authority, not by the promoter. Section 11(4)(b) of the Real Estate (Regulation and Development) Act, 2016 makes obtaining it, and making it available to allottees, the promoter's responsibility.
• It is not title. Ownership passes by the registered conveyance deed, which section 17(1) requires the promoter to execute in your favour along with the undivided proportionate title in the common areas to the association of allottees.
• It is not a certificate of completeness. A possession letter says the keys changed hands. It says nothing about whether the work is finished, unless it is drafted to say so — which is exactly the clause to read.
• It is not a waiver, unless you sign one. Some drafts include an acknowledgement that the apartment is accepted in a satisfactory condition and that no claims survive. That sentence is the whole reason to read the letter.

The documents that should accompany it

The letter should not arrive alone. Ask for the set, and ask before the day rather than on it.

Snagging: record defects before you sign, not after

Inspect on a separate, earlier day if the developer permits it, and treat the possession day as a formality rather than as the first look. If that is not possible, inspect before signing on the day itself.

Write the list in a form that can be checked a year later: a serial number, the room as named on the approved plan, the defect in physical terms rather than in adjectives, and photographs with the serial number visible in the frame. Then hand it over in writing, email it as well, and ask for acknowledgement with a rectification date against each item.

The reason to do this before signature is not distrust. It is that a defect recorded on the day is a fact, and a defect raised afterwards is an assertion.

Section 14(3) and the defect period: what it actually covers

Section 14(3) of the Act provides that where any structural defect, or any other defect in workmanship, quality or provision of services, or any other obligation of the promoter as per the agreement for sale, is brought to the promoter's notice within five years from the date of handing over possession, it is the promoter's duty to rectify it without further charge within thirty days — and where the promoter fails to do so, the aggrieved allottee is entitled to receive appropriate compensation in the manner provided under the Act.

Three things in that sentence decide whether it helps you.

• It runs from handing over of possession — the date on the letter you are about to sign.
• It requires the defect to be brought to notice. Notice is a document. Verbal complaints to a site engineer are not notice.
• It is wider than structural defects. Workmanship, quality, provision of services and any other obligation under the agreement for sale are all inside it, which is why the specification schedule annexed to the agreement matters so much at handover.

Section 14(1) sits alongside it: the sanctioned plans, layout plans and specifications approved by the competent authority may not be altered without the previous consent of the allottee in respect of the apartment, and the section sets out the majority consent required for alterations to the project. A handover that departs from the approved specification is not a snag to be tolerated; it is a departure from the document.

Maintenance, deposits and the handover to the association

Maintenance liability ordinarily begins on the day of possession or on the day of the offer of possession, and which of the two your agreement names is worth checking before the day, not after the first invoice. Ask on what basis the charge is computed and what the collected deposit or corpus is for.

Section 11(4)(f) of the Act puts the duty to enable the formation of an association of allottees on the promoter. Section 17(1) requires the common areas to be handed to that association along with the undivided proportionate title. Until that happens the promoter or its appointee manages the community, and the money collected in the interim is money the association will eventually ask about — so the terms should be in writing at handover rather than reconstructed later.

What signing does to your position on delay

Section 18(1) of the Act makes a promoter liable, on demand, to return the amount received with interest where he fails to complete or is unable to give possession in accordance with the terms of the agreement for sale; and where an allottee does not intend to withdraw from the project, the promoter is to pay interest for every month of delay till the handing over of possession.

Taking possession does not by itself extinguish a claim for the delay that preceded it. What can extinguish it is a sentence in the possession letter saying so — a full and final settlement, a waiver of all claims, or an acknowledgement that possession was given in time. If such a sentence is in the draft and the facts do not support it, that is the sentence to have removed or qualified in writing before signing.

Offer of possession versus taking possession

An intimation or offer of possession is the promoter's communication. Taking possession is your act, and it is the one the letter records. Section 19(10) requires an allottee to take physical possession within two months of the occupancy certificate issued for the apartment — note again where that period starts. An offer made before the certificate exists does not start it.

A pre-signature checklist

• Have you seen the occupancy certificate, and does it name your block?
• Does the letter record only the handover, or does it also record acceptance without defects?
• Is your snag list annexed and referred to in the letter?
• Is the final account reconciled, and are any disputed demands recorded as disputed?
• Does the letter contain a waiver, a settlement or an acknowledgement of timely delivery?
• What date does it state, and does that date match the day you actually take the keys?
• Have you photographed every room, and the meters, on the day?
• Is the conveyance deed scheduled, and on what basis?

The handover stage, and the documents on either side of it, are set out in the buyer guide. Who maintains the common areas before the association takes over is answered on the FAQ page, and each registered project's regulator, promoter name and validity is transcribed on the registrations page.