Encumbrance Certificate: What It Is And Why You Need It

An encumbrance certificate (EC) is an essential document that verifies that a property is free from any monetary or legal liabilities. It is a legal document that provides the buyer with all the necessary information about the property they intend to purchase. In this article, we will explain what an EC is and why it is necessary.

What is an Encumbrance Certificate?

An Encumbrance Certificate is a document issued by the Registrar’s office that shows all the registered transactions related to a particular property for a specific period. It is issued for a period of up to 30 years, and it contains details of all the transactions, such as mortgages, sale deeds, leases, and any other type of transaction that may have taken place.

Why is an Encumbrance Certificate Important?

An EC is a crucial document that helps the buyer to verify that the property they intend to purchase is free from any legal or monetary liabilities. It provides the buyer with all the necessary information about the property, such as whether the property has any pending loans, litigation, or any other legal dispute. An EC is also essential for banks or financial institutions to verify that the property they are providing a loan against is free from any encumbrances.

How to Obtain an Encumbrance Certificate

To obtain an EC, the applicant needs to submit an application form, along with the prescribed fee, to the local Sub-Registrar’s office. The application form should contain the details of the property, such as the property’s address, the owner’s name, and the period for which the EC is required. Once the application is submitted, the Sub-Registrar’s office will verify the details and issue the EC.

Validity of an Encumbrance Certificate

An Encumbrance Certificate is issued for a particular period, and its validity depends on the duration for which it is issued. Usually, an EC is issued for up to 30 years, and it is advisable to obtain an EC for the entire period for which the property has been in existence. However, in some cases, an EC may be required for a shorter period, such as when the property is being sold or mortgaged.

Benefits of Obtaining an Encumbrance Certificate

There are several benefits of obtaining an Encumbrance Certificate, some of which are:

Helps to verify the ownership of the property: An EC contains details of all the transactions related to a particular property, which helps to verify the ownership of the property.

Ensures that the property is free from any legal liabilities: An EC provides the buyer with all the necessary information about the property, such as whether the property has any pending loans, litigation, or any other legal dispute. This helps to ensure that the property is free from any legal liabilities.

Helps to obtain a loan against the property: An EC is essential for banks or financial institutions to verify that the property they are providing a loan against is free from any encumbrances.

Helps in the registration of the property: An EC is required for the registration of the property, and without it, the registration process cannot be completed.

Conclusion

In conclusion, an Encumbrance Certificate is an essential document that helps the buyer to verify that the property they intend to purchase is free from any legal or monetary liabilities. It is also necessary for banks or financial institutions to verify that the property they are providing a loan against is free from any encumbrances. Therefore, it is advisable to obtain an EC for the entire period for which the property has been in existence to ensure that the property is free from any legal liabilities.

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