An Encumbrance Certificate (EC) is an essential document in property transactions that provides information about a property’s legal and financial status. It serves as proof that the property is free from any monetary or legal liabilities, such as mortgages, liens, or pending legal disputes. Here’s all you need to know about the Encumbrance Certificate:
The primary purpose of obtaining an Encumbrance Certificate is to verify ownership and ensure there are no existing encumbrances or claims on the property. It is commonly required during property transactions, property sales, obtaining loans, or any legal documentation related to the property.
In most countries, the Sub-Registrar’s Office or a similar government department issues the Encumbrance Certificate. The certificate is typically available for a specified period, covering transactions within a particular time frame.
The Encumbrance Certificate provides a chronological record of all registered transactions, such as sale deeds, mortgages, gifts, and other encumbrances. These transactions took place on the property during the specified period. It does not cover unregistered or oral agreements.
Encumbrance Certificate in the property:
Legislation in different countries or states determines the validity of the Encumbrance Certificate. In some places, it is issued for 15 years, while in others, it covers a shorter or longer period.
To obtain an Encumbrance Certificate, you need to submit an application to the appropriate authority. This application should include necessary details like property address, survey number, and the time period for which the certificate is required. You may have to pay a nominal fee for the certificate issuance.
The Encumbrance Certificate is crucial for buyers to ensure they are purchasing a clear and marketable title without legal disputes or financial liabilities. Financial institutions also assess property value and determine loan eligibility.
The Encumbrance Certificate only provides information about registered transactions on the property. It may not include recent transactions or unregistered transactions. Thus, it is advisable to conduct thorough due diligence on the property with legal experts.
After obtaining the Encumbrance Certificate, it is essential to verify the details mentioned in the document with the help of a legal professional. Any discrepancies or inconsistencies should be addressed before proceeding with the property transaction.
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