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Buying a property requires more than just verifying the place, cost, and facilities of the property. While looking to purchase a house or land, one must find out if there are any dealings or financial connections linked with that particular property.
This is where the Encumbrance Certificate (EC) plays its role.
But how does an EC help one, what all information does an EC carry for a buyer, and why is it necessary to validate an EC while purchasing a property? We will see.
The Encumbrance Certificate is an official record that gives details regarding the registered transactions involving a property during a specific time period.
Simply, it enables you to know whether there have been any registered transactions regarding the property, like:
The procedure varies from state to state. EC is provided by the registration department of the government to give information from its records of registered properties.
In other words, an EC gives you a brief history of the registered transactions of the property before buying it.
Suppose you find a land or a plot with pricing that looks perfect for you. Everything seems to be in order, but you do not know if the property has any history of previous mortgages or other registered transactions.
Will you want to purchase it? Not likely without doing further research first.
An EC can reveal the history of registered transactions for the property, which helps buyers check the property before purchasing it.
It will be especially helpful in buying resale property, plot, house, or land.
In the EC, one will be able to obtain information of all registered transactions involving the property for the duration indicated in the EC.
This would differ from state to state, and include the following:
One may then cross-reference the information in the EC with that in the title documents of the property.
You might have come across requests for a “clean” or “nil” EC.
Usually, this would imply that there was no discovery of any transactions or encumbrances that are relevant during the search period of the request.
This sounds nice, doesn’t it? Yes, but there is one thing you should keep in mind.
A nil EC is not always an indication that there are no legal complications to the property in question.
The EC will normally reflect information from the relevant records of registration. There are other issues, such as title disputes, revenue records, approvals, or any other unregistered claims, which should be looked into separately.
No.
There is a difference between a title deed and an Encumbrance Certificate. The title deeds help in establishing the ownership as well as the chain of title, whereas EC helps in analysing the registered transactions for the property for a certain period of time.
That is why a buyer must review both of them.
Yes, as long as the mortgage is registered, it could be included in an EC if it happens to fall within the period of search and is reflected in the appropriate registration records.
This check is important when buying a resale property.
If you find a mortgage entry in the EC, don’t assume the property can’t be purchased. It is important to confirm that the debt has been paid off and proper documentation of its discharge has been obtained.
No. It is very important to remember that EC is just one of the steps in making sure the property is safe and legally clear. There may be several others you will have to take into account, such as:
One example of information sources for this purpose would be websites offering land records maintained by the state government.
It all depends on which state the property belongs to.
A number of states today offer EC through their official registration portal websites. The National Government Services Portal of the Government of India, for instance, offers information on online EC offered by different states.
Some of the details that might be required when filling out an application form include the registration office, village, survey number, property number, etc.
Remember to use the official government website.
There is no universal period applicable to all properties.
The required period of time depends on the age of the property, its ownership history, available documentation, lender requirements, and your property lawyer’s recommendations.
For an old property, a long history period could be helpful.
Do not simply ask for a recent EC. Instead, ask how many years of transactions are included in the EC.
The task of finding a property gets much easier with the help of an individual who knows about the real estate market in the area.
People’s Property Point offers residential, commercial, and agricultural lands in Zirakpur, Mohali, Panchkula, and Chandigarh. Be it any plot, flat, villa, independent house, or commercial property that you are looking for, you can get help from their team to find properties according to your needs and budget.
The Encumbrance Certificate can provide you with valuable insights into the registered transactions associated with the property.
However, keep in mind:
EC + Title Search + Land Record + Approvals + Legal Checks = Proper Due Diligence of Property.
Do not allow an appealing location or price to push you towards the transaction.
Take time and verify what you are getting into.
Encumbrance Certificate is a document indicating the transactions registered on the property for a certain period.
It does not. This just means that there are no encumbrances registered pertaining to the period of search.
Yes. It could have, especially if there is a registered mortgage, which appears in the EC during the period of search.
This is an important process when purchasing property, but it will depend on several factors.
You can get ECs issued by the state registration department or an official governmental website.
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