Encumbrance Certificate: Meaning, types, details, process to apply

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A buyer needs to verify the encumbrance certificate (EC) to ensure they are purchasing a property free of any debt or legal issues. Now that several Indian states have launched online virtual facilities for checking EC, it's very simple to obtain this document. This blog will cover every facet of this legal document, giving investors and buyers a clear understanding of the property title and related legal and financial issues. Will also go over how to get an online EC certificate.

An encumbrance certificate: what is it?

A legal document known as an encumbrance certificate certifies whether or not a piece of property is free from debt or other obligations. One example of a financial encumbrance is a property on which the owner is currently making home loan payments. The specifics of this financial encumbrance are available to you if you request for an encumbrance certificate for this property. Similarly to this, the municipal authority will issue an encumbrance certificate outlining the responsibilities for a property that is involved in a legal dispute.

Why is a certificate of encumbrance significant?

The absence of any financial or legal obligations on a specific piece of property is made clear by an encumbrance certificate. For example, an encumbrance certificate might indicate whether the owner has committed it to a bank. You may also determine whether you are working with a legitimate seller and that the property is not in any financial or legal bind by looking at an encumbrance certificate.

Through a precise statement of the property's legal and financial status, an encumbrance certificate responds to the following questions:

Is the owner pledging the property you are purchasing to a bank?

Is the individual selling the property the true owner?

How many people have owned the property since it was built?

Is there no debt on the property?

Has the prior owner used the property as collateral for a debt?

Has this property been purchased by someone else without the owner's knowledge?

What information does an encumbrance certificate contain?

The sub-registrar's office issues encumbrance certificates that contain all the information on a property, including its owner, ownership transfers, mortgages, and other facts. A certificate of encumbrance is created for a specified period of time. A list of all recorded transactions pertaining to the property during the specified time frame is provided by the EC. The following information may be included in these transactions:

How many times throughout this time the property was sold or purchased?

if, during this time, any loans were obtained secured by the property.

Whether the property's debts were settled during this time.

A record of all potential legal claims made during this time about the property.

Encumbrance certificate types and how to utilize them for apartments

An encumbrance certificate is a necessary document when purchasing a property to make sure you are dealing with a legitimate owner and that there are no outstanding loans against the asset.

EC for mortgages

Before accepting your house loan application, banks usually need the encumbrance certificate when you are taking out a loan to purchase a property.

EC for the removal of PF

The EC is what your employer would request if you took money out of your provident fund to purchase a home.

EC in case of mutation

After purchasing a property, the owner must use property mutation to have the ownership transfer officially documented in the government record.

EC for flat purchase

In order to show a document to a buyer while selling a property, the seller must apply for and obtain it from the government record.

An encumbrance certificate is issued by whom?

The encumbrance certificate is issued by the sub-registrar whose jurisdiction includes the property. This is the office where both the present and prior owners registered the property at the time of purchase.

Documents required for the encumbrance certificate application

To apply for an EC, a candidate must submit the following paperwork:

Proof of address: ration card, voter ID, Aadhaar, driver's license, etc.

Identity cards include voter ID, Aadhaar, PAN, ration cards, and driver's license.

Details about the property

4. The sale deed copy

5. The application's goal

6. The EC mandate timeframe

7. If necessary, a copy of the power of attorney

Forms for encumbrance certificates

Two types of encumbrance certificates exist:

Certificates of Encumbrance Form 15

The sub-registrar's office issues an encumbrance certificate on Form 15 if a property has any encumbrances during the time for which the applicant has requested a certificate. All information on the inheritance, sale, purchase, lease, mortgage, gifting, relinquishment, and partition of the subject property is usually included in Form 15.

Form 16 encumbrance certificates

The sub-registrar's office issues a nil-encumbrance certificate on Form 16 if a property has not recorded any encumbrances during the time for which the applicant has requested a certificate.

Applications of EC in different modes

You may apply online or offline for an encumbrance certificate, depending on the state in which you reside.

How can I apply online for EC?

To obtain online encumbrance certifications, the candidate must adhere to this detailed instruction. Please take note that this service is only offered in a few states. Here, you will learn how to apply online for EC in Telangana for a better understanding.

Step 1: Visit the Meeseva portal webpage.

Step 2: Select the Government Forms tab, which is the third one to show up at the top of the page.

Step 3: Navigate through the page that opens. The Encumbrance Certificate Application form is located under the Stamps and Registration heading. Fill out the essential information by downloading the form. Enclose the required paperwork with the form.

Step 4: Locate the Meeseva center that is closest to you, and apply there, along with the necessary payment.https://apdept.meeseva.gov.in/Imeeseva2/IMeesevaHome.aspx

Step 5: An acknowledgment slip will be sent to you following the submission.

Step 6: The sub-registrar's office will receive your application after it has been verified and is in charge of physically inspecting the property before issuing an encumbrance certificate.

Step 7: You can monitor the status of your application on this portal in addition to receiving information by SMS from the Meeseva portal.

Step 8: The sub-registrar's office issues the EC within six business days.

How can I apply offline for an encumbrance certificate?

The applicant must go to the sub-registrar's office where the property in question is registered if an EC is not given electronically in the state in question.

On a sheet of plain paper, draft an application that makes explicit the details you are looking for.

Send in the application and a completed Form 22.

To obtain the EC, you must submit your application and pay a small fee. The cost would change based on how long the EC is requested.

Encumbrance certificate fee

An applicant need simply pay a small fee (which varies by state and might be anywhere from Rs 200 to Rs 500) in order to receive an EC. Nevertheless, fees may change based on the time frame you are looking for.

Encumbrance certificate fees in some states

Payment methods for encumbrance certificates

You have a few options for paying when you apply online for an encumbrance certificate. These consist of using e-wallets, internet banking, debit or credit cards, NEFT, and RGTS, among other methods.

What is the duration required to obtain an encumbrance certificate?

An EC can be obtained offline in 15 to 30 days, however in areas where the certificate is granted online, the document is issued in about 6 to 7 days. For example, getting an EC offline in Delhi takes 21 days.

How long is it possible to obtain an encumbrance certificate?

A certificate of encumbrance may be obtained for a duration ranging from 12 to 30 years.

Why is it crucial to obtain an encumbrance certificate?

One of the many documents that prove a property is or is not free from financial or legal problems is the encumbrance certificate. Before deciding to buy a home, buyers must require the sellers to produce this paperwork.