Encumbrance Certificate: Types, Documents Required and Uses

Hello there! Are you looking towards purchasing a property? Well, of course, you would not want to invest your money in a property to, later on, find out all the legal and financial crises that property has brought along in your life. Properties that you are willing to buy may have a loan on them or have been registered against individual loans with the banks. You might end up in legalities if you purchase a property, without checking for these issues. And, of course, we know how tedious it is to get tied up in such scenarios. To avoid such a case, you are looking for the encumbrance certificate of the property.

You might also need an Encumbrance Certificate if you want to get involved with loans and banks. Whether you want your bank to pay a loan for you to buy a particular property, or if you wish your bank to sanction your loan against your existing property, you still need this document. But, don't worry; we are here to tell you all you need to know about the encumbrance certificate to wipe that blank look off your face.

What is an Encumbrance Certificate?

If you wish to know whether the property is free from any financial and legal issues, all you need to do is find out about that property's encumbrance certification. An encumbrance certificate means a legally issued paper or document of a property which states that it is under no financial and legal liabilities. Apart from this, it also shows you the property status and the total number and details of its past owners. It also states the transfer of ownership in the past times and all the mortgage bindings of the property. Properties against which the mortgage isn't completed, cannot obtain the EC. Apart from this, an EC is a required document if you are looking forward to applying loan to buy that property, or if you want to use the loan on your existing property. It is also viewed in the panchayat office if the property owner has not paid land tax to the government in the past three years.

Why is an Encumbrance Certificate Required?

An Encumbrance Certificate (EC) is a crucial document used as evidence of free title/possession of a property. The document is needed while purchasing or selling a property or when applying for a home loan or loan against property to confirm that the particular property is free of any economic or legal liabilities.

Types of Encumbrance Certificates

There are many types of encumbrances, but four of the most common are easements, deed restrictions, encroachments, and liens.

1. Lien

A lien is the most common type of encumbrance, and it can be placed on a property to receive a financial obligation from the homeowner, i.e., a mortgage. The lien remains on the property until the mortgage is fully paid. It can also include tax liens for unpaid taxes.

Additionally, a contractor can obtain a lien when they have not received payment for repairs done to the property. If the lien is not satisfied, it can lead to the foreclosure of the house, with the proceeds of the sale going toward the payment of the owner’s debts.

2. Deed Restriction

A deed restriction places a restriction on what can be done to the property. It is also known as a restrictive covenant. The restriction can be anything from banning placing a satellite on the roof to designating where cars can be parked. It can also limit the construction of anything on the land.

Deed restrictions help create a standard for what the property can be used for and are often used to protect the value of the property. The restrictions are usually placed on properties with historical significance.

3. Easement

An easement gives a person or entity the right to use the property even though they don’t own it. For example, a utility company might obtain an easement to place power grids on a farmer’s property. A common easement is one that allows the owner of an adjacent property to use the driveway of another property for access.

Another common easement is one that exists when a common walkway to the beach cuts through one owner’s property. The easement is on the land, not the property itself.

4. Encroachment

An encroachment exists when a section of one property extends over to an adjacent property. This can include, for example, a fence that is built along with the adjacent property or a tree branch that hangs over a neighbouring property. Usually, the property owner encroached upon will want the encroachment to be removed, as an encroachment often makes it harder to transfer their property title to a new owner.

How to Apply for an Encumbrance Certificate

Much like applying for most other official documents, there are two ways to apply for an Encumbrance Certificate also. The two ways are offline and online.

How to Apply for an Encumbrance Certificate Offline

If you wish to apply for an Encumbrance Certificate offline, then you can do it easily with application number 22 in the chambers of a sub-registrar. Most states follow this method and work with handwritten documents. While applying for this document, the applicant also needs to provide all his or her self-attested copies of their records, such as the address proof, papers of the property, registration papers, etc. You also need to attach all the relevant documents required of the property, in terms of any exchange or deed. The property registration papers of the property are to be attached.

Also, you should know that the processing fee to apply for an encumbrance certificate varies from state to state. It would be best if you also remembered that it is only valid for a specific time and needs to be revised and updated every few years, as its tenure gets over while you apply for an Encumbrance Certificate. If you have missed over updating your property's EC or are now making an EC of your property, you would first be needed to avail the NEC, Nil Encumbrance Certificate. Nil Encumbrance Certificate is a document stating your property's position in the gap period between two Encumbrance Certificates.

What are the uses of an Encumbrance Certificate?

The following circumstances, in general, necessitate the use of an encumbrance certificate:

EC for purchase: A non-encumbrance certificate is necessary when purchasing a home to demonstrate that you are dealing with the correct party and that the property is free and clear of all liens.

EC for sale: If an individual chooses to sell their property, they are required to show the encumbrance certificate along with all other relevant documents to the potential buyer. To obtain the certificate, the seller must apply for it and get it from the government's files.

Use EC for property mutation: After purchasing the property, the owner must use property mutation to officially document the ownership transfer.

Encumbrance certificate for loans: Before approving your application for a home loan to buy a home, banks frequently require an encumbrance certificate.

EC for the elimination of PF: Your employer will request the EC if you utilise your provident fund to put a down payment on a home.

How to Check the Status of an Encumbrance Certificate?

In most Indian states, application for an Encumbrance Certificate has been taken over to EC online means by the state government websites. Applicants can easily log in on the state website and check the status of their property's Encumbrance Certificate Status, without any hassles. It takes a maximum of thirty days typically to get approved. Once it has been approved, it can be easily downloaded from the site. However, suppose it has exceeded the duration. In that case, you can quickly contact them for help via the number provided on the website or write an application to them over mail with the mail address provided.

Documents Required for Obtaining Encumbrance Certificate

• Application form
• Attested copy of address proof
• A photocopy of any previously executed deed of the said property such as sale deeds, gift deeds, partition deeds, release deeds, etc.
• Details about the property and its title details
• The registered deed number, date, book number, volume/ CD number, and signature of the applicant should be affixed with it.
• Period for which the EC is required
• The purpose for which the EC is applied for
• Copy of Power of Attorney, in case of application, is made by the attorney holder
• Aadhar card
• Property card if available

Updating an Encumbrance Certificate: A Guide for Indian Homebuyers

Encumbrance Certificate (EC) is an important document that proves the ownership of a property and its clear title. It is a must-have document for homebuyers looking to purchase a property, as it serves as evidence of the property's transaction history and the absence of any legal liabilities or claims against the property. But what if you need to update your EC? Here's a step-by-step guide on how to update an EC in India.

An EC is usually valid for a period of 30 years and must be updated regularly to ensure that it reflects the current status of the property. Updating an EC is a straightforward process that involves obtaining a new certificate from the relevant authority and updating the property's transaction history.

Here are a few things to keep in mind while updating your EC:

• Verify the ownership of the property
• Ensure that all taxes and other liabilities have been paid
• Check for any ongoing legal disputes
• Get the latest copy of the EC
• Update the transaction history of the property

Get Your EC Up-to-date in a Jiffy with These Simple Steps

Updating your EC is a breeze when you follow these simple steps:

1. Verify the Ownership of the Property

Check the latest property deed

Obtain a No Objection Certificate (NOC) from the current owner

2. Check for Any Liabilities

Ensure that all taxes and other liabilities have been paid

Get a receipt for the same

3. Check for Any Legal Disputes

Verify if there are any ongoing legal disputes related to the property

4. Get the Latest EC

Visit the relevant authority's website (e.g., Karnataka, Bangalore Development Authority, etc.)

Download the EC application form

Fill in the required details

Submit the form along with the necessary documents (property deed, NOC, receipts, etc.)

5. Update the Transaction History of the Property

Once the EC has been updated, ensure that the transaction history of the property reflects the latest information

Make the EC Updating Process a Breeze

Here's a handy table to help you keep track of what you need to do while updating your EC:

STEP	TASK	DOCUMENTS REQUIRED
1	Verify Ownership	Property Deed, NOC
2	Check for Liabilities	Receipts for Taxes and Other Liabilities
3	Check for Legal Disputes	Information on Ongoing Legal Disputes
4	Get the Latest EC	EC Application Form, Filled in with Required Details
5	Update Transaction History	Updated EC Reflecting the Latest Information

• Verify the ownership of the property
• Check the latest property deed
• Obtain a No Objection Certificate (NOC) from the current owner
• Check for any liabilities
• Ensure that all taxes and other liabilities have been paid
• Get a receipt for the same
• Check for any legal disputes
• Verify if there are any ongoing legal disputes related to the property
• Get the latest EC
• Visit the relevant authority's website (e.g., Karnataka, Bangalore Development Authority, etc.)
• Download the EC application form
• Fill in the required details- Submit the form along with the necessary documents (property deed, NOC, receipts, etc.)
• Update the transaction history of the property- Once the EC has been updated, ensure that the transaction history of the property reflects the latest information

Updating an Encumbrance Certificate (EC) is an important task for homeowners and buyers in India, as it helps ensure that the property's title is clear and free from any legal liabilities or claims. With the help of this guide, updating your EC has never been easier!

But what if you need professional help with the EC updating process? That's where NoBroker comes in! Our legal services team can help you navigate the complexities of the EC updating process and ensure that your property has a clear title. Get in touch with us today to learn more!

Difference Between Encumbrance Certificate, Completion Certificate and Occupancy Certificate

Purchasing a property is stressful, and the different legal documents usually cause buyers to get perplexed. The distinction between Encumbrance Certificate, Completion Certificate, and Occupancy Certificate is the one that people most frequently get wrong. For clarification on the crucial differences between the 3, see the following:

Encumbrance Certificate (EC): A legal document that certifies a piece of property is unencumbered by debts or obligations is known as an encumbrance certificate.

Completion Certificate (CC): A completion certificate, which is a legal document, is issued when a building is finished in accordance with the building plan and other specifications.

Occupancy Certificate (OC): A legal document that certifies the building is now secure to enter is called an occupancy certificate. It is issued after receiving the CC.

How to Download the EC Online?

All you need to check for this is to log in to the website. Then, you need to go to the section of the Encumbrance Certificate and enter your credentials. Once the status of your Encumbrance Certificate has been approved on the state website, you can easily download the document in the form of a printable pdf, on your device, and attach its printed copy with the records of your property. You might need to wait over fifteen to thirty days, as it takes this much time for your property's EC status to be approved.

You have already learned all you need to know about the encumbrance certificate. A paper issued by the Registrar states that your property has no liability in terms of legal and financial issues. It can be easily applied online as well and EC online takes about fifteen to thirty days to get approved. You can quickly check for the status of your application on the website itself. Not only this, but you can also download EC online onto your device very easily. It is essential to check for this certificate if you are planning to invest in a property. It not only tells you the legal and financial position of a property, but it also means you the history of ownership of the property. You might want to look at that as well.

There is so much an Encumbrance Certificate can tell you about a property. Why wait now? Happy Investing! Looking to buy or sell a property? It's time to trust the experts at NoBroker! Get an expert legal team to go over all your documents so that you don't invest in a property that has legal issues. This could cost you plenty of time and money. Be smart and get the right team to help you with the whole process. Click the link below.

FAQ's