Buying a Property? Check Authenticity through the Encumbrance Certificate

If you are planning to buy an apartment, house or a piece of land, ensure that is clear of any litigation and that is has a clear and marketable title. How do you do this? All you need to do is check the encumbrance certificate. An encumbrance certificate is a document of evidence for free title and ownership.

Encumbrance is a liability on a particular property where it has been used as a mortgage for debt and has not been released from the liability as on date. An encumbrance certificate contains details of all transactions with regard to a particular Loan against property and certifies that there are no legal dues or discrepancies. It can be obtained from the sub-registrar's office where the deed is registered. It is an extract of the register maintained by the sub-registrar. If the particular property is not registered with the registrar, the details, however, will not be recorded in the encumbrance certificate.

An EC is issued for a particular period of time. Any period prior to or following the period mentioned in the certificate will not be covered. It is an important certificate that is required when buying a property, applying for a home loan or taking a loan against a property. Financial institutions and government authorities would usually ask for an encumbrance certificate that is valid anywhere between 13 and 30 years.

All said and done, there are certain property-related transactions that are outside the scope and do not require to be registered under the Registration Act 1908.The property owner need not get the property registered if he deposits the original document in the bank against a mortgage. Another scenario is when the property is given on lease for a period of less than one year. Also, tax liabilities, prior unregistered agreements, oral tenancy, etc. will not be recorded in an encumbrance certificate.

A 'no encumbrance certificate' is a very important document for transactions related to sales and purchase of property. Loan against property are also given after producing this certificate as it would state that the property has not been mortgaged with another lender at the same time.

To obtain a no encumbrance certificate, you need to apply in Form 22 to the Tahsildar with your residential address and stating the need of the certificate. Provide correct information of title, ownership of the property, survey number, address, description of the Loan against property with measurements and boundaries, and submitted to the jurisdictional sub-registrar with the requisite fee. The no EC will be issued after a detailed enquiry, provided there are no entries in favour of a person or a legal body.

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