Encumbrance Certificate for Property Buying

The encumbrance certificate is used in property transactions as an evidence of free title/ownership. When buying an apartment, land or house, it is important to confirm that the land or property does not have any legal dues. A prospective home buyer must ensure that the property he intends to purchase has a clear and marketable title. The encumbrance certificate certifies that the property is not mortgaged and has no legal dues. The encumbrance certificate for property is available from the sub registrar office where the deed has been registered.

Encumbrance Certificate

The encumbrance certificate is vital for property buying, applying for Home loan or Loan against Property. Government Authorities and Financial Institution like banks etc demand 13 years of encumbrance. You could demand 30 years encumbrance certificate to be checked. If you still have anymore doubts, you can take a Possession Certificate of the ownership of the particular land, which is available from the village office.

The “Encumbrance” means the charges or 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. The encumbrance certificate contains all the transactions registered relating to a particular property for a period (as required).
The encumbrance certificates are issued in Form No. 15 or 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 form No. 15 will be issued. The certificate in form 15 discloses the documents registered in respect of the property, the parties to the deed, nature of the encumbrance, amounts secured or transacted in the said deed, the registered number of the document, Book No., Volume No., date-wise.

Limitations of Encumbrance Certificate

Government Authorities and Financial Institution like banks etc demand 13 years of encumbrance to confirm that the land or property does not have any legal dues. Public in general frequently use encumbrance certificates in property transactions as the sole evidence of free title / ownership. They are under the impression that the encumbrance certificate would disclose all the encumbrances that a property may have. However, encumbrance certificate has certain limitations and public should not completely rely on this certificates.

The encumbrances disclosed in the certificate are for the period for which certificate is issued and any encumbrance created at a prior date or at a later date are not included in the said certificate. Hence public should not completely rely on the certificates issued by the Registrar or Sub-Registrar office for tracing the clear title of the said property.

Procedures for Encumbrance Certificate

When you intend to purchase a property, an encumbrance certificate is a very important. The encumbrance certificate contains all the transactions registered relating to a particular property for a period. Government Authorities and Financial Institution like banks etc demand 13 years of encumbrance. You could demand 30 years encumbrance certificate to be checked. Before buying any land or house, it is important to confirm that the land does not have any legal dues. Following is procedure to obtain a no encumbrance certificate or encumbrance certificate.

• Apply on Form 22, with a Rs 2 non-judicial stamp affixed, to the Tahsildar giving your complete residential address and the purpose for which the certificate is required.

• Furnish details of ownership of property giving correct survey number and place where the property is situated. It is very important that the period, full description of the property, its measurements, and boundaries are clearly mentioned in the application

• The requisite fee needs to be paid. The fee is to be paid year-wise. The encumbrance year commences from April 1 of a calendar and closes on March 31, of the next calendar year. Any fraction of the said encumbrance year attracts fee for the full year.

• Enclose address proof such as Copy of ration card or any proof of residence address duly attested along with application.

• The application should be submitted to the jurisdictional sub-registrar’s office under which the property falls.

• In case the property does not have any encumbrance during the period, Form 16 is issued. This means no charge has been registered on the property. In case the property has any charges registered against it, then Form No 15 is issued.

• Form 15 discloses the nature of charges created, documents of the property registered, amount secured, and the registration details and references.

• In case there is no such entry and the report is favorable, the no encumbrance certificate is issued after conducting a detailed enquiry. The time taken may be anywhere between 15 to 30 days.