Everything you need to know about the Encumbrance Certificate

Having the right documents plays a crucial role in the home buying process. Whether it is getting a home loan approved, checking the legalities of the construction or changing ownership, no process is complete without a detailed checklist of documents that acknowledge it. The Encumbrance Certificate is one such document you need to be wary of.

What is an Encumbrance Certificate?

An Encumbrance Certificate(EC) is a document that has been made compulsory for any type of property transaction. This certificate is evidence that the property does not have any legal liabilities attached to it. These issues could include both legal dues as well as monetary issues with respect to mortgage not being repaid.

Where can I get my Encumbrance Certificate?

The EC for a property can be collected from the sub-registrar of the revenue department where the property was registered. Depending on the transaction history of the specific property the encumbrance certificate is issued either on Form 15 or 16.

Form 15 is issued for a property which has multiple transactions in its history.
Form 16 is issued for a new property. This can also be called as Nil Encumbrance.

Not only is the encumbrance certificate necessary when buying or selling a property, but this certificate is also a must when approaching banks or financial institutions for a home loan. Certain banks and financial institutions might even require the certificate from a particular timeframe as a part of the documentation.

What is the process to obtain an EC?

Step 1: Go to the state government website and download ‘Form 22’ for the application of the Encumbrance Certificate. This application form can also be obtained from the nearest registrar or sub-registrar’s office.

Step 2: Submit the following documents to the concerned government office which in this case is the registrar or sub-registrar’s office:

● A valid address proof which is attested by a government official
● The title deed of the property
● All details of the property
● The processing fee of INR 100 for the application. (The fee can vary depending on the time period of the encumbrance certificate requested for)

Step 3: After the application is submitted an inspector will be assigned to verify all the documents submitted and the transaction history against the property.

Step 4: Once the inspection is complete an Encumbrance Certificate will be issued by the sub-registrar in Form 15 which will include all the transaction details of the property. In the case of no transaction history against the property, a Nil or Non-encumbrance certificate will be issued in Form 16.

Step 5: The issuance of the certificate can take anywhere between 15-30 days.

Things to keep in mind when obtaining the encumbrance certificate:

● The Encumbrance Certificate is issued in the regional language of the state where the property is registered.
● For an additional fee, the certificate can be translated into English.
● It is advised to apply for a possession certificate alongside the Encumbrance Certificate as proof of ownership for the property.

What is not included in the encumbrance certificate?

The encumbrance certificate document has details of all transactions that were formally registered or authorized by the government till the specific date. However, the EC does not take into account any transaction that hasn’t been formally registered. A short term lease or any type of property need not be registered which is also the reason why they might not reflect on the encumbrance certificate.

While you embark on the journey of becoming the owner of a new property, make sure to get the possession certificate for the property as well. The Encumbrance Certificate is an important step for the eligibility of a home loan and even as a proof of liability. It ensures a hassle-free purchase of your new property. If you are looking to invest in real estate, head over to House of Hiranandani for an amazing range of luxurious apartments.