Encumbrance Certificate (EC)

‘Encumbrance’ refers to a mortgage or a claim made by others on assets or property. The Encumbrance Certificate (EC) is an important document which is required at the time of buying or selling a property or while applying for a home loan or loan against property (LAP).

 

One can check for all possible legal complications that might be associated with a property by analysing the EC. This will essentially help the future buyer to find out whether someone other than the current owner can claim ownership of the property or not.

 

With the exception of a few states, Encumbrance Certificates are majorly issued physically. States which prefer to go the online route for the same include Andhra Pradesh, Kerala, Odisha, Tamil Nadu, Puducherry, Uttar Pradesh, Karnataka, and Telangana.

An Encumbrance Certificate contains the following key details:

• Property Description: Comprehensive details of the property, including its location, survey number, and dimensions

• Ownership Information: Name(s) of the property owner(s) as per the land or property records

• Transaction History: A chronological record of all transactions, such as sales, mortgages, leases, or gifts, linked to the property

• Document Number and Date: Reference to legal documents registered with the sub-registrar’s office

• Financial Liabilities: Details of any mortgages, loans, or claims associated with the property

• Period of Search: The specific duration for which the Encumbrance Certificate was requested, such as 15 or 20 years

The 2 main types of Encumbrance Certificates are as follows:

Form 15

This is issued when the property has recorded transactions or encumbrances such as loans, mortgages, or leases.

Form 16

Issued as a Nil Encumbrance Certificate, it confirms the property has no financial or legal liabilities within the specified period.

Form 16, also known as a Nil Encumbrance Certificate is a document that indicates the absence of any encumbrances during the requested period. These include loans, mortgages, and legal disputes. It ensures the property has a clear title and is free from liabilities.

As it is one of the most important legal documents, an individual is usually required to present an EC for the following purposes:

• Getting Home Loans
  

• Purchasing Property
  

• PF Withdrawals
  

• Mutation of Property
  

• Sale of Property
  
  

 Listed below are some reasons why an EC is important:

• It enables one to purchase a property without litigations
  

• Acts as proof for property-owners
  

• The document helps in updating the land-based records

An EC provides multiple advantages, making it an essential document for property transactions:

Verifies Property Ownership

Confirms the rightful ownership of the property and ensures the title is free from legal disputes.

Ensures a Clear Title

Highlights any financial liabilities or encumbrances, allowing you to assess the property's legal and financial health.

Facilitates Loan Approvals

Serves as a mandatory document when applying for home or property loans, helping financial institutions verify the property's status.

Protects Buyers from Fraud

Offers transparency in property transactions by listing all financial and legal records, safeguarding you from fraudulent claims.

Supports Legal Compliance

Confirms that the property complies with local regulations and has no pending legal or financial issues.

Improves Resale Value

A property with a clear EC is more attractive to potential buyers, increasing its market value.

Assists in Property Disputes

Acts as legal proof in case of ownership disputes or claims, providing clarity over past transactions.

Mandatory for Property Registration

Required for registering a property or transferring ownership, ensuring a smooth legal process.

 

Obtaining an EC provides assurance about a property's authenticity and helps minimise potential risks during transactions.

In order to get an Encumbrance Certificate online, the applicant must follow the following step-by-step guide.

• Step 1: Visit the official website of the Registration and Stamps Department of your respective state
  

• Step 2: Login by entering your credentials and the provided Captcha code
  

• Step 3: Enter your personal and property details in the application form
  

• Step 4: Provide address proof, registration copy, sale deed/gift deed copy, etc.
  

• Step 5: Submit the application for further proceedings
  

• Step 6: Note down the acknowledgement number that appears on the screen
  
  

You can use the acknowledgement number to check your application status. Typically, it takes about 2-3 working days for the EC to be issued online.

Following are the steps to be taken in order to get an EC offline:

• Step 1: Visit the office of your respective sub-registrar

• Step 2: Fill Form 22

• Step 3: Enter details of the property, the buyer’s and seller’s names, and other details

• Step 4: Submit the form and pay the fee specified at the office counter
  
  

Once the process is completed, the EC is likely to be issued within 15-30 working days.

Some of the documents you would need while applying for an Encumbrance Certificate are:

• The property sale deed/gift, deed/partition, deed/release deed if a deed has been executed previously
  

• Property registration document
  

• Address proof of the applicant
  

• The signature of the applicant
  

• Details of the property for which the certificate is being sought
  

• A copy of the deed if there is one

An Encumbrance Certificate (EC) for a home loan typically includes the following details:

Ownership Records

Information about the current and previous owners of the property, verifying the chain of ownership.

Property Details

A clear description of the property, including its location, dimensions, and survey number.

Transaction History

A detailed record of all registered financial and legal transactions, such as sales, mortgages, or leases, associated with the property.

Encumbrance Information

Highlights any financial liabilities, including existing loans or mortgages that might affect the property’s clear title.

Period of Search

The timeframe for which the EC has been issued, ensuring a thorough check during the specified duration.

Legal Status of the Property

Verification of whether the property is free from disputes, legal claims, or government acquisitions.

An EC helps lenders assess the property's risk profile and ensures it can be used as collateral for the home loan.

Following are the steps to track EC Status online:

• Step 1: Visit the official website
  

• Step 2: Click on ‘Certificate’, select ‘Encumbrance Certificate’, and click on ‘EC Status’
  

• Step 3: Provide the transaction details
  

• Step 4: Enter Captcha code and select ‘Check Status’
  
  

Your EC would then be provided on your screen. You would have to save and/or download it.

• Apply for an EC online in Andhra Pradesh
  

• Apply for an EC online in Tamil Nadu
  

• Apply for an EC online in Telangana
  

• Apply for an EC online in Kerala
  

• Apply for an EC online in Karnataka
  

• Apply for an EC online in Puducherry
  

• Apply for an EC online in Uttar Pradesh
  

• Apply for an EC online in Odisha