Why it is necessary to obtain Encumbrance Certificate?

What Is Encumbrance Certificate?The Encumbrance certificate is a certificate which states that the property or land under the transaction does not have any legal issues. The Encumbrance is the charges or obligations associated with specific property. The encumbrance certificate comprises all the transactions associated with a specific property including financial and other, for a specific time period.

Significance of Encumbrance CertificateEncumbrance certificate is the vital part of all the legal property transactions which is produced as a proof of free title/ownership over the property. It is mandatory to ensure that the property does not have any legal dues or fine associated while purchasing a flat, land or house. Home buyers need to ensure that the property which he/she is buying has a clear and viable title. Encumbrance certificate also confirms that the property is not mortgaged or does not have any legal charges. While applying for home loans or any other loans against the property it is necessary that one should submit the encumbrance certificate. Banks and government authorities request you to submit 13 years of encumbrance. Encumbrance certificate is issued by the relevant sub registrar office where the property is situated or the deed of the property has been recorded.

How to apply for Encumbrance Certificate?Encumbrance certificate is issued by the sub registrar office under whose jurisdiction the property is situated. To get encumbrance certificate, one can apply using the Form 22 by pasting an Rs 2 non-judicial stamp which must be submitted to the Tehsildar of the respective area. The following documents are mandatory while applying for the encumbrance certificate.

Address Proof – Attested photocopy of ration card or any residential address proof (attested by the government authority) must be attached with the form as a residential proof of the applicant.

Property title details – It is very important that the applicant must include full details of ownership of the property, along with survey number and address with full description of the property. Property details must include measurements, boundaries and the time period for which certificate should be issued.1

Completely filled along with attached mandatory documents must be submitted to the jurisdictional sub-registrar’s office along with the associated fees for the issuance of the certificate. The charges levied for the encumbrance certificate is paid year-wise, the year usually starts on 1st April and ends on 31st March.

Once the application is submitted, the Tehsildar will ask for a report from the Patwari (Talatti) if he find out any entry associated with property from any person or legal body. And if the property has no such entry then the No Encumbrance Certificate is issued with a detailed enquiry about the property and transactions. The complete process of getting a certificate takes about 10 to 15 working days.                               

What are the limitations of Encumbrance Certificate?There are many transactions and matters which will not be covered by the encumbrance certificate such transactions are listed below

• Equitable mortgage details do not get registered at the registrar’s office. In such mortgages where person deposits original documents with associated financial institutions or banks.
• Testamentary documents are usually not registered with the sub registrar’s office.
• Lease transactions for a period of less than a year are usually not registered with the registrar’s office.
• Family arrangements, prior unregistered agreements, oral tenancy, tax liabilities, unregistered will etc are also not registered with registrar’s office.

No Encumbrance Certificate issued by the sub registrar’s office is the most important document which certifies that the property is not under any legal or other liability.