The encumbrance certificate is a mandatory document used in property transactions as an evidence of free title/ownership. When buying a house, flat or plot, it is important to verify that the property does not have any monetary or legal dues. And encumbrance certificate (EC) ensures that there is a complete ownership of the property without any monetary or legal liability. The EC for property can be obtained from the sub-registrar’s office where the particular property has been registered.
An encumbrance certificate is evidence that the property in question is free from any monetary and legal liabilities. It is evidence that the property can be sold as a free title and the ownership will come to you without any associated baggage. This is a document that you will be able to procure from the registration authority’s office. It is your assurance that the property you are about to invest in is clear of any legal dues and has a marketable title.
Importance of an EC
The encumbrance certificate is important for those applying for a home loan or obtaining a loan against property or when one wants to sell or buy a property. “Encumbrance” means that the liabilities created on a particular property, whereby it is held as a security for any debt of its owner, which has not been discharged as on date. An encumbrance certificate contains all the transactions registered relating to a particular property for a certain period (as required). These details also consist any claims or encumbrance on the property
Government authorities and financial institutions like banks usually demand 10-15 years of encumbrance. However, you can also ask for up to 30 years encumbrance certificate to be checked. If you still have doubts, you can take a Possession Certificate of the ownership of the particular land, which is available from the village office.
Types of EC;
- Form No. 15 - Encumbrance Certificate on Form No. 15 will contain a record of sale, lease, mortgage, gift, partition, release etc. All of this will have to be registered with the competent authorities and placed on record in Book I that is maintained by the registering authorities for the specific period that the certificate is being asked for..
- Form No. 16 - You will get your encumbrance certificate in a Form No. 16 only when there is nothing by way of transactions for the time frame that the certificate is being sought for.
