Non-Encumbrance Certificate

When you buy a house, certain certificates are considered very crucial. A non encumbrance certificate (EC) is one such document and it is extremely important to complete the home purchase. An encumbrance certificate is a document that ensures legal ownership over a property and all the home buyers should be well aware of it.

 A non encumbrance certificate is a legal document that lists all the registered transactions related to the property in question over a particular period of time. EC will show details like the number of times the property has changed hands, if any loans were taken against this property and the record of any legal claims that might have been made over the property during this specific time period. One can get a non encumbrance certificate of a property for up to a period of 30 years. The real estate sector has a few critical documents which play a deciding role during the property purchase. Some of these are occupancy certificate (OC), completion certificate (CC), encumbrance certificate (EC), etc. EC is an essential document to avail a housing loan from any lender to buy a property.

Encumbrance, in general, means something that makes it difficult for you to do something. It can be termed as a hindrance or obstacle. A similar meaning can be applied when it comes to the real estate sector. If a property has a claim on it by a party that is not the owner, then it will be counted as ‘encumbered’. For any property, a non encumbrance certificate means the property is free from any kind of legal or financial liabilities. For example, when a house is bought by taking a loan, then as a security against the loan, the lender will levy costs on this property. Throughout the duration of the loan, the property will remain mortgaged with the lender. Such property has a financial liability. To get a non encumbrance certificate for that property, the full repayment of the loan is mandatory. The municipal body will not issue an EC for a property caught in a legal dispute.

A non encumbrance certificate is a legal deed that shows whether a particular property is free from any kind of legal and financial liabilities or not. An EC shows;

• If it has been pledged by the seller to a bank

• Who the current owner is

• How many hands the property has changed since it first came into being

Once you receive a non encumbrance certificate, you can ensure that you are dealing with a genuine seller and the property does not have any legal or financial burdens.

Non encumbrance certificate fees vary from state to state. It is calculated based on the size of the property and the duration for which the certificate is applied. The fee ranges from Rs. 1 to Rs. 200. Usually, a non encumbrance certificate is issued with information up to 12 years at a specific charge. Applicants can request a longer duration and it can be up to 30 years.

In Tamil Nadu, EC fees for information for the first year is Rs. 15, and for each additional year, an extra Rs. 5 is charged. The EC request fee in Delhi starts at Rs. 200 and increases depending on the location and time for which the information is requested. In Telangana and Andhra Pradesh, the fees for information up to the first 30 years is Rs. 200, and it can go up to Rs. 500 for additional years.