An Encumbrance Certificate is the most important document for purchasing a property. It confirms that the land or house you are purchasing is free of any legal cases, mortgages, or outstanding dues.
It is required for various purposes, from home loans to property tax updates. It can be obtained from the sub-registrar office or online within 7-15 days.
If you’re considering buying land, a house, or a flat, one of the most important documents is an Encumbrance Certificate (EC). This certificate indicates that the property you’re purchasing is free of any legal encumbrances, debts, or outstanding dues. Simply put, an Encumbrance Certificate proves that the land or house is free of any disputes and that the owner has full authority to sell it. Let’s understand, in simple terms, what an Encumbrance Certificate is, how it’s created, and what it’s used for.
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What is Encumbrance Certificate?
An Encumbrance Certificate (EC) is an official document issued by the sub-registrar office. It clearly states that a property is free of any legal encumbrances, mortgages, outstanding loans, court cases, or other claims. This certificate assures the buyer that the property’s ownership is clear and that no previous debts or cases will arise upon purchase.
Why is Encumbrance Certificate important?
1. Legal safety of the property
The EC indicates whether the property is encumbered by any bank or institution. This provides the buyer with assurance that there will be no legal hassles later.
2. Essential for taking a loan
If you take out a home loan to buy a house, the bank often asks for an Encumbrance Certificate. The bank wants to ensure that the property it’s granting the loan against is not already mortgaged to someone else.
3. Ownership proof
An Encumbrance Certificate is often used to prove ownership. It is also required for name transfer within a municipality or group housing society.
How is an Encumbrance Certificate made?
1. Where to apply
You must apply for an EC at the sub-registrar’s office in the district where the property is registered. Many states now offer the option to apply online.
2. Required Documents
- Property deed (copy of Sale Deed or Gift Deed)
- Complete property details: Survey number, Khasra number, name of village or town
- Identity and address proof of the applicant
- Application form and prescribed fees
3. Fees and Timings
Fees vary from state to state. Typically, the charge ranges from ₹200 to ₹600. An Encumbrance Certificate is issued within 7-15 days of application.
Two types of Encumbrance Certificate
1. Nil Encumbrance Certificate
The sub-registry office issues a Nil EC when there are no loans, mortgages, or legal encumbrances against the property. This is crucial as it indicates that the property is completely clear.
2. Detailed Encumbrance Certificate
If the property has previously been subject to a loan or registration, it provides complete details. It also shows which transactions occurred on which dates.
In what works is the Encumbrance Certificate used?
- Buying and selling a house or land
- In taking a home loan or mortgage loan from the bank
- Changing property tax in municipal records
- Getting a building permit
- Transferring ownership
