What is Encumbrance Certificate in Property Buying?

The encumbrance certificate is a mandatory document used in property transactions as an evidence of free ownership. When buying a plot, flat or a house, it is always advised to verify that the property does not have any monetary or legal dues. An encumbrance certificate ensures that there is a complete ownership of the property without any monetary or legal liability. The encumbrance certificate for a property can be obtained from the Sub-Registrar’s office where the particular property has been registered.

Importance of Encumbrance Certificate

The encumbrance certificate is important for those applying for a home loan or obtaining a loan against property or when one wants to sell or buy a property. “Encumbrance” means that the liabilities created on a particular property, whereby it is held as a security for any debt of its owner, which has not been discharged as on date. An encumbrance certificate contains all the transactions registered for a property during a certain period. These details also enlighten us of any claims or encumbrance on the property.

Financial institutions like banks usually demand 10-15 years of encumbrance. However, one can also ask for an encumbrance certificate for a span of 30 years and check these same. If you still have doubts, you can take a Possession Certificate of the ownership of the particular land, which is available from the village office.

What is Form no. 15 & 16?

The encumbrance certificate is issued in Form No. 15 and 16. If the property does not have any encumbrance during the said period, Form 16 will be issued i.e., certificate of Nil Encumbrance. If the property has any encumbrance registered during the said period, then form No. 15 will be issued. The certificate in form 15 reveals the documents registered with respect to the property, nature of the encumbrance such as gift, partition, lease and mortgage, the parties involved, the registered number of the document and other details in a date-wise manner.

Note that, if you are asking an Encumbrance Certificate for a particular period, you will get the details only for that period and not more. The details will be given from the entries available in the register available with the sub-registrar.

How to obtain an Encumbrance Certificate?

• First and foremost, fill up the Form 22 and affix it with INR 2.00 non-judicial stamp and address to the Tahsildar, giving an attested copy of your residential address and the purpose for which the certificate is required

• Provide the details of ownership such as correct survey number and place where the property is situated. It is very important that the period and full description of the property are mentioned clearly in the application

• The requisite fee needs to be paid. The fee is to be paid according to the period of encumbrance that is to be checked. The encumbrance year commences from April 1st of a calendar and closes on March 31st, of the next calendar year. The encumbrance certificate is also usually provided in the regional language. An English translation may be obtained by paying an additional fee

• The application should be submitted to the jurisdictional Sub-Registrar’s office, under which the property is registered.

The time taken to obtain an Encumbrance Certificate is usually 15-30 working days. While an Encumbrance Certificate may give the details of the encumbrance on a property, there are certain documents that are exempt from being registered at the Sub-Registrar’s office. As such, these will not appear in the Encumbrance Certificate. Hence, it is advised that the buyer obtains both the encumbrance certificate and possession certificate as a proof of complete ownership of the property.

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