An encumbrance certificate (EC) is a legal assurance that a house is free of financial and legal burden. Encumbrance refers to something that hinders movement or doing what somebody wants. This definition becomes much clearer when used in the context of real estate. When purchasing a new property, a potential buyer must figure out if the property is free from legal or financial liabilities, i.e., the concerned property has free title or ownership.
Along with occupancy and completion certificate, EC is one of the few essential documents that applicants need to submit to their lender to avail a loan.
An EC certificate (called bhar-mukt praman in Hindi) guarantees that an individual has complete ownership of the property in question. It is extremely important for those who want to obtain a loan against their property or buy or sell a house. Not only does it confirm the legal title of a property’s owner, but it also makes it eligible for monetary advances from a financial institution against it.
With an EC certificate, you can search for specific property details, like how many times this house has changed hands, and charges, if any. If there is no existing property owner with a right to claim it legally, i.e., it has free title; then it establishes this applicant as the owner. If the property has not been pledged to another lender, it becomes eligible for a new advance subject to other eligibility criteria.
When applying for an encumbrance certificate online or at the sub-registrar’s office, the applicant must specify a period for which he/she needs the required information. There are two types of certificate of encumbrance on property, as discussed below:
• Form 15: If this property has previous encumbrances during the period for which an applicant requests an EC, the sub-registrar’s office issues Form 15.
• Form 16: When no lender has placed a lien on the concerned property, there will be no charges placed on it during a specified time. In such situations, a ‘NiL Encumbrance Certificate’ on Form 16 is issued.
In most states, handwritten EC certificates are issued. Applicants have to pay EC fees as per authorities quote. Fees differ from state to state and may change depending on the size of the land and duration for which the certificate is applied.
For example, in Tamil Nadu, the application fee is Rs.1. Information for the first year stands at Rs.15 and an extra Rs.5 per additional year. An additional fee of Rs.100 will be applicable for the computerised period (after 1987). Similarly, the request fee in Delhi starts at Rs.200 and increases depending on the location and time-specific for which the information is requested.
Some states also charge fixed rates based on the duration. For example, Andhra Pradesh and Telangana levy Rs.200 for information up to the first 30 years. This fee goes up to Rs.500 if the information requested is for more than 30 years.
When applying for a property or land EC, applicants will have to carry the following documents with them:
Contact the sub-registrar’s office for more details on exact required documents.
Only a few states offer EC certificates online, as a majority of states still issue a handwritten EC. States that issue encumbrance certificates online are Odisha, Andhra Pradesh, Tamil Nadu, Puducherry, Kerala, and Telangana. In effect, the step-by-step guide to obtaining an encumbrance certificate online will also differ from state to state. You will need to visit their official website to get their applications for the EC certificate of that state. The basic steps are as follows:
Applicants need to submit a simple formal proforma requesting assistance in the process to apply for an EC. This letter needs to be addressed to - The Registrar (or Sub-registrar), Register (or sub-registrar) office, Address (as per location).
State your property details, like full address mentioned in the registration deed, including East, West, South and North boundaries to identify nearby properties or landmark. Do not worry if you don’t have the complete property details, as the officer will help you fill in the details later.
You can track encumbrance certificate status from the same government portal.
From here, you can download the EC certificate if issued.
Ensure to keep this document handy before applying for credits like a loan against property to enjoy a smooth borrowing process.
An Encumbrance certificate is a legal assurance that a property is free from any legal and financial burden.
Follow these simple steps in order to get an EC certificate: