How to check statement of encumbrance on property.

When it comes to property transactions, one of the most important documents for both buyers and sellers is theEncumbrance Certificate (EC). This certificate plays a crucial role in verifying the legal status of a property, ensuring there are no existing liabilities, such as loans, mortgages, or disputes, attached to it. Whether you are purchasing a new home, selling your property, or applying for a mortgage loan, theStatement of Encumbranceprovides essential information. This document can be obtained from the land or sub-registrar offices and helps confirm the ownership history of a property. Read on to understand everything about theStatement of Encumbranceon property, its importance, and how to obtain it.

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What is a Statement of Encumbrance on property?

TheStatement of Encumbranceon property is an official document that certifies whether a property has any legal dues, charges, or liabilities. It provides a clear picture of the property’s title and ownership history. The term "encumbrance" refers to any claim, lien, or charge against the property, including mortgages, unpaid loans, or legal disputes.

TheEncumbrance Certificate (EC)helps establish the property’s clear title, which is necessary for all legal transactions. When applying for aloan against property, or selling or buying property, having an EC ensures there are no hidden encumbrances, making the property transaction smooth and secure.

Importance of Encumbrance Certificate in property transactions

TheEncumbrance Certificateholds significant importance in property transactions due to the following reasons:

Proves ownership: The EC certifies the legal owner of the property. It serves as proof that the property belongs to the individual selling or mortgaging it.

Ensures clear title: It confirms that the property is free of encumbrances, such as unpaid mortgages or legal disputes, ensuring that the title is clear.

Required for loan applications: When you apply for aloan against property, banks and financial institutions require the EC to ensure the property is legally free and clear of any financial obligations.

Prevents future disputes: By checking the EC, you can ensure that the property does not have any legal issues that could arise in the future.

Verification of past transactions: It shows the history of transactions related to the property, helping buyers and lenders verify whether the property has had any previous loans or claims.

Types of Encumbrance Certificates in India

In India,Encumbrance Certificatescome in two main forms:Form 15andForm 16. Here is a breakdown of both:

Form 15:

• This form is used when a property has been involved in a financial transaction such as a mortgage or loan. It shows that there is a record of encumbrance attached to the property.
• Typically used by banks or financial institutions to verify property ownership before offering loans.

Form 16:

This form is issued for properties that have no recorded encumbrances, showing that the property is free from any claims, loans, or disputes.

Used when buying or selling property, or when transferring property ownership. It is also used to verify the status of the property during legal proceedings.

Steps to obtain Encumbrance Certificate online

Obtaining anEC onlineis a simple process that saves time and effort. Here's a step-by-step guide:

Step 1: Visit the official portal

Go to the official website of your state’sRevenue DepartmentorLand Records Portal. Most Indian states have their own portals where you can apply for the EC.

Step 2: Log in or register

If you already have an account, log in using your credentials. If not, register by providing basic details like your name, email, and mobile number.

Step 3: Select the Encumbrance Certificate option

Once logged in, look for theEncumbrance Certificatesection. This may be under "Property Services" or "Land Records."

Step 4: Enter property details

Fill in the details of the property, such as the survey number, the district, and the taluk. Make sure you enter the correct information to avoid errors.

Step 5: Make payment

The EC may require a nominal fee for processing. Make the payment using the available online payment methods like debit/credit card or net banking.

Step 6: Download EC

Once your application is processed and approved, you will be able to download theEncumbrance certificatein PDF format.

Offline process to obtain Encumbrance Certificate

If you prefer the offline route, here's how you can apply for the EC:

Step 1: Visit the local sub-registrar office

Go to the local sub-registrar office or the Revenue Department office.

Step 2: Fill out the application form

Request the EC application form from the office, fill in the necessary details such as property survey number, owner’s name, and location.

Step 3: Submit documents

Along with the application form, submit a copy of the title deed or any other relevant documents.

Step 4: Pay the fee

Pay the required processing fee for obtaining the EC. The fee can vary by state and property value.

Step 5: Receive the EC

Once your application is processed, you will be issued theEncumbrance Certificate.

How Encumbrance Certificate affects property ownership and title?

TheEncumbrance Certificatedirectly impacts property ownership and title in the following ways:

Confirms clear ownership: It proves that the property is free from encumbrances, ensuring that the owner has a clear and undisputed title.

Affects property transfer: Without an EC, transferring property ownership becomes legally challenging. Buyers and lenders rely on the EC to verify that the seller is the rightful owner.

Protects against future claims: Having a clean EC protects the buyer from future claims or legal disputes regarding the property.

Checking property history and transactions using Encumbrance Certificate

TheEncumbrance Certificatealso provides a detailed history of all property transactions, including past mortgages and loans. It helps verify theownership history, allowing buyers and lenders to confirm that the property has no outstanding financial claims. It also helps inproperty due diligence, ensuring that the buyer is not inheriting any unforeseen financial responsibilities.

Encumbrance Certificate vs Title deed:

Aspect	Encumbrance Certificate	Title deed
Purpose	Verifies property ownership and encumbrances	Confirms absolute ownership of the property
Issued by	Revenue Department/Sub-Registrar Office	Property owner/Registered with authorities
Legal status	Legal proof of clear title and transactions	Establishes full ownership rights
Usage	Property verification, loan applications, legal disputes	Selling, transferring, or gifting property

How to use Encumbrance Certificate in real estate transactions?

Inreal estate transactions, theEncumbrance Certificateserves as proof of the property’s legal status. It is required by:

Buyers: To verify that the property is free of legal disputes or claims.

Lenders: Banks and financial institutions require an EC before granting aloan against property.

Property sellers: To prove they are the rightful owners and have a clear title to sell.

Legal Validity of Encumbrance Certificate in court proceedings

TheEncumbrance Certificatehas legal validity and can be used in court proceedings as proof of ownership or to settle disputes. It is a credible document that can be presented in case of a legal challenge regarding property ownership.

How Encumbrance Certificates help in mortgage applications?

When applying for amortgage loanorloan against property, theEncumbrance Certificateis crucial for ensuring that the property does not have any existing liens or legal claims. Financial institutions use the EC to verify that the property is legally clear before approving the loan.

Conclusion

In conclusion, theStatement of Encumbranceon property is an essential document that plays a critical role in property transactions, loan applications, and legal matters. Whether you are buying, selling, or applying for aloan against property, having a clear and accurate EC is necessary to confirm the property’s ownership and title status. With both online and offline methods to obtain theEncumbrance Certificate, it is now easier than ever to ensure your property is legally clear of any encumbrances. Always ensure the property’s EC is up-to-date and free from any claims before proceeding with any real estate transaction.