Encumbrance Certificate: What You should Know?

When purchasing a home, it is crucial to determine if there are any legal issues. The Encumbrance Certificate (EC) can assist you to determine whether there are any charges placed on the property. If you are a buyer asking how to acquire this information, this blog is for you.

What is a Certificate of Encumbrance?

If a property is acquired via a mortgage or if it has been pledged, the lender will place a “Lien” or a charge on the property. This will prevent the borrower/property owner from selling the property until the mortgage is paid in full.

The Encumbrance Certificate is a legal document that will inform you of any financial or legal encumbrances on the property. You may get an EC by contacting the office of the relevant Sub-Registrar.

Why is a Certificate of Encumbrance Required?

Before purchasing a home, you must confirm that its title is clear. Obtaining an Encumbrance Certificate will guarantee that the property you seek to purchase is not subject to any such financial or legal obligation. Before making a transaction, it is essential to resolve any unauthorized charges on the EC. It will also assist you in determining if there are any current owners who are legally entitled to the land.

In addition, if you want to get a loan to purchase a home, you will be required to provide your lender with an EC.

Types of Encumbrance Certificates 

Two kinds of encumbrance certificates exist. The following are:

• Form 15
• Form 16

If a property contains encumbrances during the time for which the applicant has requested a certificate, the sub-office registrar provides a certificate of encumbrance on Form 15. 

While a nil-encumbrance certificate is granted on Form 16 by the same office if a property has not registered any encumbrances during the time sought by the applicant, a nil-encumbrance certificate is issued if a property has not registered any encumbrances during the period.

What is a Certificate of ‘No Lien’?

When requesting an Encumbrance Certificate, you will be required to indicate the length of time for which the information is required.

A “Nil Encumbrance Certificate” will be provided if no encumbrances are imposed on the property during the required time. During this time period, no lender has put a lien on the property.

Online Application for an Encumbrance Certificate

The processes required to apply for an Encumbrance Certificate vary by State. A few states in the United States permit online applications for an EC. If you are unable to apply for an Encumbrance Certificate online in your State, you must contact the office of the corresponding Sub-Registrar.

Listed below is the online application process for an Encumbrance Certificate:

1. Visit the relevant State’s official website for land registration and pick the EC application option.
2. Complete all essential information on the window for the application for the encumbrance certificate, then click save/update.
3. Enter the search time for which the EC is required, and then click “Calculate Fee.”
4. Upon paying and submitting the application fee, you will be routed to the ‘Acknowledgment’ page. You may print the acknowledgment by clicking the ‘View Acknowledgement’ button.
5. An inspector from the department of land records will conduct an examination and check for all information about the property in question.
6. After the inspection is complete, an Encumbrance Certificate will be produced for all transactions that happened within the stated time. If no transactions occurred throughout the time, a null EC will be issued.

How to Apply Offline for an Encumbrance Certificate?

1. Pay a visit to the relevant Sub-Office Registrar (the jurisdiction depends on the location of the property).
2. Submit the properly filled out Form 22.
3. You will be requested to provide information such as the seller and buyer’s names, property information, the kind of document you are asking for (in this instance, an EC), etc.
4. The necessary charge must be paid at the counter.
5. After successfully submitting your application, you will get a reference/acknowledgement number. This number may be used to follow the application’s status online.

How to Determine the Status of a Charge Certificate?

The procedures to monitor the progress of your EC application vary amongst websites. The majority of government websites that enable you to apply for an Encumbrance Certificate online also allow you to follow the application’s progress.

For instance, the official Website of the Government of Kerala enables people to check the status online. The procedure is as follows:

1. Select “EC Status” from the “Encumbrance Certificate” menu under the “Certificate” option.
2. Enter the Transaction ID issued to you when you submitted the application, and then click “Check Status.” You will be able to see the certificate on the screen and download it in PDF format.

How Long Will It Take to Obtain a Certificate of Lien?

As indicated above, the procedure to receive an EC varies by location. If you apply in person at a Sub-Office Registrar’s for an EC, you will get it within 15 to 30 days.

However, you will get your EC more quickly if you apply for it online. Online applications are typically handled within two to three business days.

Required Documents to Obtain an Encumbrance Certificate

The following papers are required when applying for an Encumbrance Certificate:

• Property papers and title deed information.
• The property papers of sale deed, gift deed, division deed, or release deed, if a deed was previously completed.
• The deed number upon registration, including the date and book number, as well as the applicant’s signature.
• Document of property registration.
• Proof of the applicant’s address

Please visit the Sub-Office Registrar in your district to learn more about the Encumbrance Certificate.

Conclusion

One has to apply online to get the Encumbrance Certificate. It is advisable to take legal consultation while applying for the certificate. Taking Legal consultation helps you to get the work done quickly and without any hassle.