Encumbrance Certificate

What is Encumbrance Certificate (EC)?

In context of real estate, the word “Encumbrance” refers to financial or non-financial claim on a property by parties other than the title-holder of the property. An Encumbrance Certificate (EC) is a document through which a potential buyer or lender can ascertain if the concerned property is free from any legal and financial obligations such as uncleared loans.

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Importance of an Encumbrance Certificate

Buying a property is a huge investment, thereby making it important for homebuyers to get EC to not only to avoid fraud but also to secure their legal titles over their properties. The document also helps lenders ascertain applicants’ eligibility for home loan or loan against property.

The documents will help the property investor ascertain if any of the following has been created against the concerned property:

• Lien for mortgage
• Lease rights
• Third party rights
• Any other charge

If the Encumbrance Certificate states that the property in question has no encumbrances attached to it, then the potential buyer or lender can safely enter into any sort of transaction with respect to that property. If the document states an encumbrance or charge has been created against the property, it will caution the prospective buyer/ lender to not engage in any further transaction regarding the property and protect their interests.

How to get an encumbrance certificate online and offline?

Anyone who needs assurance regarding a property’s clear title can obtain EC from the Sub-Registrar’s Office in which the concerned property has been registered.

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Steps to Avail a Non Encumbrance Certificate Online and Offline

• Individuals can submit the application for EC online or manually by visiting the Sub-Registrar’s Office (SRO).
• Along with the application, submit the fee applicable for obtaining the Certificate.
• After the application is accepted, the officer will inspect the Indexes for details in the specified period.
• An Encumbrance Certificate with the details of the transactions in the specified period is issued.
• In case there were no transactions during the specified period, a Nil Encumbrance Certificate or Non Encumbrance Certificate (NEC), is issued.

How Long Will It Take to Get an Encumbrance Certificate?

As the process to obtain an EC differs across States, the time taken to avail an encumbrance certificate may also vary. Applying for an EC through online mode might get you the certificate faster than the offline application process. Online applications are usually processed in 2-3 working days. On the other hand, you may receive EC through offline mode of application in about 6 to 30 working days.

FAQ

1. Is there any particular timeline to get the encumbrance certificate?

Ans.  As per the Standing Order 979(ii), with respect to the offices and period, which is not computerised, the encumbrance certificate shall be completed and issued within 4 days from the date of application submission. For computerised period, the encumbrance certificate will be issued right away.

2. Why is it important to have encumbrance certificate?

Ans.  With encumbrance certificate, you can get detailed information on previous transactions, which will help you achieve proper entitlement of the concerned property. Hence, it’s always recommended to get encumbrance certificate.