Owning a property is a dream come true moment for most people than not. Steps towards this dream involve way too many legal and formal documents. Should you be planning to purchase a property, make sure that you don’t miss out on any in order to have a clean and transparent transaction. EC, CC, PC are some of the documents to start off with and are easily mixed up with each other. Make sure that you prepare a checklist so you don’t miss out on any of these crucial documents.
Now let us know in detail all that there is to know about an encumbrance certificate.
What is an Encumbrance Certificate?
An encumbrance certificate refers to a legal document of complete ownership of property and financial liabilities associated with the property. This document is issued from the office of the sub-registrar. This document is of utmost importance when you are planning to sell or buy a property as it logs the financial liabilities the property has carried in the past and at present as detailed transactions. This document can hold the details regarding the transactions of up to 30 years. During the sale of a property, the encumbrance certificate is the proof of assurance that the property is free of any financial liability and loans. It also holds the property to be free from any legal disputes.
The encumbrance certificate is not only required during a property sale, it is also a mandate while applying for a housing loan.
How to Acquire an Encumbrance Certificate?
The encumbrance certificate can be acquired from the registrar’s office where the property is registered on submitting an application along with an attested copy of the documents such as address proof and the purpose for which the certificate is required.
- The encumbrance certificate is applied using Form no 22, which is to be submitted along with two non-judicial stamps
- Complete address of the property including the survey number along with the identity proof of the applicant and other documents should be mentioned
- On submitting these documents along with an application fee, the officer will inspect the property and issue the encumbrance certificate within a time span of 15 to 30 days, if all is clear.
How Long Does It Take For An Encumbrance Certificate Release?
An encumbrance certificate is released in two forms depending on the history of the property listed. Form 15 is issued when there is an encumbrance on the enlisted property such as lease, partition, mortgage, or gift. The document will carry the list of encumbrance registered for the given period of time. Whereas Form 16, NIL document is issued when there is no above-mentioned encumbrance registered on the property listed.
An encumbrance period begins from the 1st of April and ends on the 31st of March of the next year. Sales of property involve a number of legal documents which assure the ownership, safety, and fitness of the property with respect to occupancy.
A compilation certificate is a similar certificate granted by the authorities once the construction is complete on the property. In order to acquire the certificate, one must submit the construction plan with other required documents. Once the inspection is done, the local municipality will also grant documents assuring the fitness for occupancy and possession of the property.
Does an Encumbrance Certificate Document Complete the Transaction of a Property?
An encumbrance certificate documents the transaction on a property only within a limited period of time frame. The transactions, pending litigations, and financial liabilities before and after that tie period will not be stated in the document. Hence it is advised not to completely rely on the encumbrance certificate alone for tracking the liabilities on the property.
States like Gujarat, Odisha, Telangana, Andhra Pradesh, Karnataka, Pondicherry, Tamil Nadu, and Kerala are equipped to produce computerized encumbrance certificates. But other states of India still follow the handwritten practice in releasing the certificate.
An encumbrance certificate holds the accounts of past transactions and liabilities of a property within a set time period. It is a prerequisite for both, property sales and the application of home loans. In order to have legal purchase of property, this certificate is a must, but it is advisable that the buyer does not entirely depend on this document to understand the history of transactions and ongoing liabilities of the property as this is accountable only for a time period.
- Is an encumbrance certificate mandatory for property-related transactions?
Yes, an encumbrance certificate is mandatory for property sales and for availing home loans based on the property. The encumbrance certificate is issued on the basis of the status of liabilities currently on the property. If it is devoid of any liability, under Form 16 a Nil Encumbrance certificate is issued, in the other case under Form 15 the certificate is issued with a list of applicable liabilities.
- How do I get my encumbrance certificate?
You can procure your encumbrance certificate by applying at the sub-registrar office with Form 22 and details regarding the property and your ID proof. Online application facility is available only across a few states in India
- How do I track my encumbrance certificate status?
You can track your encumbrance certificate status by heading to the website and check for “EC STATUS” mentioned under the “ENCUMBRANCE CERTIFICATE” option in the menu. On providing you “TRANSACTION ID” you will be able to track/download your EC in PDF format.
- What is the validity period for an encumbrance certificate?
According to the amendment of the Indian Contract Act, the validity of an encumbrance certificate is as mentioned on the certificate. It usually comes up to a time frame of 13 to 30 years.