30 Approvals Required for Construction in Real Estate

In a real estate project, there are more than 30 approvals required for construction. The process of getting these approvals from various government departments can be intimidating. We studied approval processes of various states and came up with this generic list of approvals required for construction of a real estate project.

The list is divided into 3 parts based on project stages. The first stage is feasibility stage – when the developer procures the Change in Land Use (CLU) Approval and ensures clear title of land while none of the drawings and plans are prepared in this stage. The second stage is the sanction stage – when consultants are hired to prepare various plans and assist in the approval process. Once all approvals & NOCs are obtained and the developer complies with all regulations, he is issued Commencement Certificate to start the construction. The third and final stage is post-completion stage which is when the buildings are completed and Completion Certificate and Occupancy Certificate are obtained so that the developer can offer possession to the customers.

Whether you are a home buyer, a real estate investor, developer or a banker, we are sure that you will find this list useful.

approvals-required-for-construction-in-real-estate

List of Approvals Required for Construction

S. No. Approval Concerned Agency Remarks
Feasibility Stage
1 Ownership Certificate/ Extract Revenue Department Required by Development Authority/ Town & Country Planning Department/ Municipal Corporation for other approvals
2 Non-Encumbrance Certificate Revenue Department Required by Development Authority/ Town & Country Planning Department/ Municipal Corporation for other approvals
3 Change in Land Use (CLU) Approval/ Non-Agriculture (NA) Permission Development Authority/ Revenue Department/ Municipal Corporation After approval from local body, to be notified by State Ministry of Urban Development
4 Airport Clearance
(if applicable)
Airport Authority of India Height clearance if the project lies within 20 kms radius of Air Strips, Funnel.
5 CRZ (Coastal Regulatory Zone) Clearance Coastal Zone Management Authority If project lies within 500m of coastline.
Sanction Stage 
6 Layout & Building Plan Approval Development Authority/ Municipal Corporation Including Structural Plan for  buildings & other structures
7 Development/ Construction License Development Authority/ Town & Country Planning Department Site Inspection by the authority is required.
8 Demarcation/ Zoning Plan Approval Town & Country Planning Department Required in some states separately, in addition to layout plan.
9 Environment Clearance Ministry of Environment & Forests/ State Environment Impact Assessment Authority/ State Pollution Control Board Required by projects exceeding land area of 125 acres or built-up area of 20,000 sqmtr.
10 NOC for Tree Cutting Municipal Corporation / Forest Department Proposal of tree felling and replantation to be submitted.
11 NOC for Drainage & Sewerage Municipal Corporation Required before start of construction.
12 Electrical Scheme Approval Development Authority/ Municipal Corporation/ Electricity Distribution Company Electrical Layout and Plan to be submitted.
13 NOC for Traffic & Coordination Municipal Corporation/ Traffic Police Department When the proposal involves disruption of general traffic movement/ circulation pattern temporarily or permanently during and after construction of the project.
14 Fire Fighting Scheme Approval Fire Department Applicable for buildings above minimum height, as specified by Municipal Corporation of the city
15 Ancient Monument Approval (if applicable) Archaelogical Survey of India When project or part of it is within 300 m radius from the declared boundary of any monument protected under Ancient Monument Act
16 Consent to Establish & Operate (DG Sets & STP) Pollution Control Board Required for DG sets installation, Sewage Treatment Plant (STP) etc.
17 Borewell Registration Certificate Central Ground Water Authority Required to extract ground water through any energized means as per Envrionment Protection Act.
18 Excavation/ Mining Approval Development Authority/ Municipal Corporation All drawing plans approved by development authority/ municipal corporation are to be submitted.
19 Internal Infrastructure Layout & Common Facilities Approval Municipal Corporation/ Utility Provider Layout drawings & plans for water, electricity, sewerage etc. to be submitted for approval.
20 Road Access Plan Approval NHAI/ PWD/ State Road Development Agency Required as per PWD Act to gain seamless access to the project site from the adjoining road.
21 Lift Escalator Installation Approval PWD/ CPWD AMC copy and test report to be submitted.
22 Sanction of Electrical Load and Approval for installation of Substation, Transformer & DG Sets Electricity Distribution Company Electrical drawings & plans and test reports of various equipment to be submitted along with application.
23 Registration of Principal Employer Labour Department Required in many states under Contract Labour Act
24 Registration with Building Construction Workers Welfare Board District Labour Officer Required in many states under Contract Labour Act
25 Site Office Approval Development Authority/ Town & Country Planning Department Affidavit required stating that site office will be dismantled after completion of project.
26 Hoarding Approval NHAI/ PWD/ Land Owning Agency Approval required to put up any hoardings about project.
27 Intimation of Disapproval (IoD)/ Commencement Certificate Development Authority/ Municipal Corporation Once developer submits complete application alongwith all plans, NOCs and other approvals, authority may either issue IoD (in case of disapproval) or otherwise handsover Commencement Certificate to start construction.
After Completion
28 Completion Certificate (CC) Development Authority/ Municipal Corporation Authority issues CC upon completion of buildings as per sanctioned plans. Along with CC, a provisional occupancy certificate is also issued by authority.
29 Permanent Power Connection Electricity Distribution Company All service connections should be applied on basis of completion certificate and provisional occupancy certificate.
30 Permanent Water Connection Municipal Corporation/ State Water Board
31 Permanent Sewerage Connection Municipal Corporation/ State Water Board
32 Registration of Residents’ Welfare Association (RWA) Revenue Department Association to be registered before occupancy certificate is given.
33 Occupancy Certificate (OC) Development Authority/ Municipal Corporation Occupancy Certificate is the final certificate to be received for a project. It implies that the property is now fit for occupation.

The above list is an indicative list of approvals required for construction. Some states may have additional requirements to be satisfied.

If you are a home buyer or a real estate investor, we understand that asking the developer about so many approvals may not be practical. So, you should only ask him about 4 major approvals:

  • Ownership Certificate / Extract – This will ensure that the land is owned by the developer. You can also check land records online.
  • Change in Land Use (CLU) Approval – CLU approval is required to convert agricultural land to residential, commercial or industrial.
  • Layout & Building Plan Approval – The complete layout and building plan has to be approved by the development authority or the municipal corporation of the city before construction can commence.
  • Commencement Certificate – This will ensure that the builder has received all other approvals & NOCs and that he can start construction.

You should not invest in a project where any of these approvals are missing. If the builder tries to avoid or divert your question, it’s a sign that the builder has not received approvals and is only trying to push the sale.

Once the project is complete, you should ask the builder whether he has received the completion certificate and occupancy certificate.

References

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3 Comments

  1. Ajay Hooda says

    The quality of articles at AssetYogi.com has only gone up. I believe this is the best real estate info site available in India, and is perhaps one of the best in the world.

    1. Mukul Malik says

      Thanks Ajay for the kind words!

  2. Darrin Gagel says

    Until this time, 30-year fixed loans were rare. Instead, loans requiring large down payments and with risky balloon payments were common. Over the past 80 years, the FHA has created a huge boost both for the housing market and the general economy by allowing home ownership to become more affordable. At the same time, traditional lending has evolved to offer the 15- and 30-year fixed rate mortgages with which most of us are familiar.

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