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Encumbrance Certificate: Here is all you need to know

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Encumbrance Certificate: Here is all you need to know

If you’re in the market to buy a house, the term ‘Encumbrance Certificate’ must be familiar to you. When preparing for the big purchase, ensure that you do not miss out on an Encumbrance Certificate for the chosen property.  

Encumbrance certificate meaning

Encumbrance refers to charges levied on assets. An Encumbrance Certificate, better known as the EC, is a certificate of assurance. It confirms that the property being bought is free of monetary or legal liabilities, such as a mortgage or an uncleared loan. An aspiring homebuyer must get an EC as it will not just secure their legal title over the property but will make them eligible to obtain loans from most financial institutions against or even for the property.

How to get anEC?

The EC for any property is typically provided at the sub-registrar’s office with which the property has been duly registered. 

  • The application is to be made to the registration office for an EC with an attested copy of address proof, details about the property, title details, and the fees that are applicable for obtaining the Encumbrance Certificate.
  • An officer is appointed to inspect the indices for crucial details in the specified period.
  • An Encumbrance Certificate with the details of the transactions in the specified period, or if no transactions have taken place, a Nil Encumbrance Certificate or NEC, is issued.
  • The EC comes through in about 15–30 days from when the applicant has applied.
  • The forms of EC applications and certificates are specified in the annexures in the Registrations Acts of respective states. An EC application is usually made by Form No. 22, the EC is issued by Form No. 15, and the NEC by Form No. 16 following respective state rules.

What will you find in the EC?

  • The High Court of Karnataka has observed that an EC issued by the Registration Office and relating to immovable property is not simply of encumbrances but all encumbrances and acts affecting such property.
  • All transactions that are related to the property and have been previously recorded by a Registrar will be supervised, and necessary details will reflect in your EC.  
  • The EC pertains to only a specific period, and any transactions that are relevant to that period will be looked into. Yet another essential consideration is that the EC will also only reflect the documents and transactions that are registered with the office. 
  • Some of the documents like testamentary documents and short-term lease deeds do not need to be registered under the law, and are excluded from the purview of the transactions that are recorded with a sub-registrar’s office.

How to get an encumbrance certificate of a property online?

Aspiring homebuyers can generate their Encumbrance Certificate for a property from the Sub-Registrar’s office where the property was registered. However, in some states such as Tamil Nadu, Andhra Pradesh, Kerala, Gujarat, Karnataka, Odisha, Pondicherry, and Telangana, aspiring homebuyers can generate their Encumbrance Certificate online.

Steps to getting an encumbrance certificate online

  • The applicant has to submit an application to the Registration Office via Form 22, along with an attested copy of his/her address proof, details of the property, and the fees applicable to avail of the certificate
  • The officer is expected to examine the indexes for intricate details in the specified period
  • An EC will be issued for the mentioned period, provided there is transaction history during the specified period. If no transactions had taken place during the specified period, a NEC is going to be generated
  • An EC is issued within 15 to 30 days from when the application has been filed
  • The forms for EC applications and certificates are mentioned in the annexure to the rules of the Registrations Acts of each state. Typically, an application is made via Form No. 22, EC is issued via Form No. 15, and the NEC is issued via Form No. 16.

Documents required to get an encumbrance certificate

Some of the essential encumbrance certificate documents typically asked for when applying for an Encumbrance Certificate are mentioned below:

  • The applicant’s address proof
  • The applicant’s property registration document
  • The applicant’s property details and title deed 
  • The applicant’s property’s gift/sale/partition/release deed if one has been made earlier
  • The deed number upon registration with the book number, the applicant’s signature, and the date

Concluding thoughts
An EC must be distinguished from an Occupancy Certificate (OC) or Completion Certificate (CC).  A CC is issued by the local authority to a builder or developer upon the completion of construction of a building in compliance with the building plan and other regulations. After a CC has been obtained, local municipal authorities then issue an OC/Possession Certificate (PC) as a no-objection declaration to permit the occupancy of the building. Hence, if you are aspiring to purchase a house property, it is recommended to take loan against property from Bajaj Finserv.

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