Encumbrance Certificate – 6 Unknown Facts to know

What is Encumbrance Certificate? How to get Encumbrance Certificate online?

Encumbrance refers to any liability or charge existing on a property. A property may be mortgaged or in the lien if any loan was taken against this and it was kept as security or collateral. So, encumbrance means having a charge, lien, mortgage or debts on a property resulted on account of collateral security. Thus, in simple terms Encumbrance means a mortgage or outstanding liabilities in relation to a property.

So, the question is while you are buying any real estate properties such as house, flats, building, land, etc, would you go for a property which has encumbrance on it? Most obviously, the answer would be a No. As no one wants to buy any property which already has any disputes over its title or ownership. Everyone wants to deal with a property which is free from any disputes, hazards, and complications.

⇒ 1. What is Encumbrance Certificate?

Encumbrance Certificate refers to a document that reveals all the registered transactions pertaining to the property that took place during the specific period as asked for. Encumbrance Certificate also states if the property is exposed to any monetary or legal dues. Encumbrance Certificate states whether a property is free from any title or ownership. This means if the property in question has any outstanding loan dues or the property has any mortgage or lien created on it.

Thus I can say that Encumbrance Certificate acts as evidence to identify the monetary and legal liabilities for the property in question. So, EC clearly tells us whether the property in question is free from any litigation and the property can be transferred(Title or Ownership) without any legal hazards.

So, you can see how important an Encumbrance Certificate is. It has got immense significance as far as real estate transactions are concerned. Therefore, Encumbrance Certificate or EC is required to be used as a mandatory document for any property transactions.

Once you are buying a property, you must check its EC for a reasonably specific period of 15-20 years. This will ensure that the property is free from any legal or monetary dues and is free from any title or ownership.

One can collect this certificate from the local Sub-Registrar’s office where the property is actually registered.

⇒ 2. Why do you need the Encumbrance Certificate(EC)?

In order to verify the legal veracity of a property, the EC is a must document that everyone needs to check. In India, buying a property comes with a lot of emotions along with the financial burden. Therefore, you have every reason to use the EC as a tool to check and identify if the property is free from any previous outstanding claims, charge or even legal disputes. For the following reasons, you need an EC.

Encumbrance Certificate Requirements
  • Encumbrance Certificate ensures if the property is free from any Title or Ownership;
  • EC helps in identifying whether any previous mortgage or lien exists on the property;
  • This certificate helps in transferring the ownership or title of the property in your name with ease;
  • EC can tell you if there is any previous tax is due if you submit this copy in the local tax office;
  • To avail a bank loan or mortgage your property, you need to submit EC copy to the banks;
  • Most importantly if you are a salaried person and wish to withdraw your PF money for buying or construction of a house, you have to produce Encumbrance Certificate without fail. Or else, your application may get rejected.

⇒ 3. What information does an Encumbrance Certificate contain?

An Encumbrance Certificate contains the following relevant information:

  • Name of the property owner;
  • Relevant details regarding the property such as a detailed description of the property as mentioned in the Sale Deeds;
  • All the registered transactions pertaining to the property that took place during the specific period as asked for in chronological order;
  • Details regarding the mortgage or loans if any exists on the property;
  • It may contain details of Gift Deeds if any previously executed on the property.
  • COntains details regarding free title or ownership;

⇒ 4. Is there a NIL Encumbrance Certificate?

Yes, there is a NIL Encumbrance Certificate. If there is no encumbrance on the property you are interested to buy, you will be issued a NIL EC by the jurisdictional Sub Registrar’s Office.

⇒ 5. How to get an Encumbrance Certificate online?

You can get an EC by filing a handwritten application in Form 22 along with a nominal fee to the Sub-registrar’s office where the property is actually registered. Generally, it takes usually 15 to 30 days to issue the EC, from the date of the receipt of the application in the Sub Registrar’s Office.

At present, you can get Encumbrance Certificate online that are computerized and being issued by the following states namely – Karnataka, Kerala, Tamil Nadu, Andhra Pradesh, Telangana, Gujarat, Odisha, and Puducherry.

How to apply and get Encumbrance Certificate online

  • You need to submit an application to the registrar’s office for obtaining the certificate in Form 22. This form is available both online and offline on the official registered site of the respective states.
  • Your application must be submitted along with s stamp paper of Rs 2, attested copy of your address proof, the purpose of obtaining the EC and details of the property and its title or ownership.
  • Thereafter you need to pay prescribed fees along with the application.
  • This fee generally starts from Rs. 100 and gradually increases, the longer the period you ask for.
  • Also, the prescribed fees may vary from state to state as per their own rules and regulations.
  • On receiving your application an inspector will inspect all the transactions that took place against the property for a specified period.
  • After the scrutiny, the Sub-Registrar will issue an encumbrance certificate in Form 15 with all the transactions in a specified period.
  • If there are no previous transactions on the property, you will be issued a NIL encumbrance certificate in Form 16  as I mentioned earlier.
  • The certificate is primarily issued in the regional language you belong to but also it may be obtained in the English language by paying an additional fee.
GST on Real Estate Transaction
⇒ 6. What are the relevant forms to get the Encumbrance Certificate online?

The Sub-Registrar’s office will issue your encumbrance certificates either in Form 15 or Form 16.

  • Form No. 15 for Encumbrance

If there is any encumbrance on the property, the Sub-Registrar’s office will issue Encumbrance Certificate on Form 15  mentioning all the records such as a record of sale, lease, mortgage, gift, partition, release, etc in chronological order.

These transactions are required to be registered with the competent authorities and must be recorded in a register for the specific period for which the certificate is being sought for.

  • Form No. 16 for Non-Encumbrance

If there are no transactions for the specific period for which the certificate is being sought for, you will be issued your encumbrance certificate in Form 16 mentioning Non-Encumbrance.

If you want to have Encumbrance Certificate application form download, you can click on the below Download link.

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