The encumbrance certificate is a necessary certificate used in property transactions as proof of free title or possession. When purchasing a property like a house, plot or flat, it is essential to confirm that the property does not have any financial or authorized duties. And encumbrance certificate makes certain that there is an entire tenure of the property without any financial or authorized legal responsibility. The encumbrance certificate for property can be acquired from the sub-registrar’s administrative center where the specified property has been registered.
The encumbrance certificate is imperative for those who submit an application for a home loan or acquiring a loan against property or when you desire to sell or purchase a property. The term “Encumbrance” refers to the legal responsibility produced on the individual land or property, through which it is apprehended as a security for any liability of its landlord that has not been discharged as on date. An EC takes account of all the transactions recorded relating to a specific property for a term (as needed). These particulars comprise of all encumbrance or claims on the land property. While making a big property related purchase, encumbrance certificate is altogether essential documents with pan card, sale deed, title deed, passports, tax returns documents from society address proof, allotment letter etc.
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An encumbrance certificate is an essential document for those NRIs who inherit property. In such a situation, the title of property might be disputed or may hold some dues. A non-encumbrance certificate ensures no such dues pending for inherited property. An encumbrance certificate is used in property transactions as evidence of free title to ensure that property doesn't contain legal dues nor it is mortgaged. One who seeks for a non-encumbrance certificate, he/she might visit sub-registrar office.
As an NRI you can apply to get an encumbrance certificate even if purchasing property is available in cities like Bangalore, Hyderabad, Mumbai, Pune, Noida etc. Many NRI services provider such as NRIWAY is one of the leading company in this area which do search for property title and they will issue a non-encumbrance certificate once they find a title free property. Before purchasing or selling a property make sure that property is property screened by a local lawyer who gives a green signal to acquire it.
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Therefore, encumbrance certificate is not only a legal identity proof of a property but also it helps when NRI apply for a home loan or a loan against property. An encumbrance certificate maintains all records of transactions related to a particular property for a certain period. This period ensures any claim or encumbrance on the property. Most financial institutions and Government body ask for 10-15 years encumbrance certificate but you can demand for past 30-35 years encumbrance certificate to be verified a title free property.
How to get EC:
An encumbrance certificate is issued at sub registrar's office where a particular property is registered. To apply to follow the below-mentioned steps:
Completion and Occupancy Certificates:
An Encumbrance Certificate is to be differentiated by completion certificates(CC) and occupancy certificates(OC).
A completion certificate is issued by a local authority to a developer or a builder after completion of building construction in compliance with building plan and regulations. Once CC is issued, the local municipal authorities issue an OC as a declaration of no objection upon occupancy of such building, land, and property.
Who issues encumbrance certificate?
The encumbrance certificate for a property is made available at the sub-registrar’s administrative center in which your property has been registered. An encumbrance certificate is to be distinguished with an Occupancy Certificate (OC) or Completion Certificate (CC).
The local authority issues a Completion Certificate to a developer or builder upon the completion of construction of a building in agreement with the building plan and another set of laws. Once a Completion Certificate is acquired, the local municipal establishment's issue an Occupancy Certificate or a Possession Certificate (PC) as a statement of no objection in allowing the tenure of the building. ?
Thus, if you are on the lookout for buying a house property, it is best to confirm that the builder or developer has issued a Completion Certificate and Occupancy Certificate.
The Encumbrance Certificate for a property is made available at the sub-registrar’s office in which your property has been registered. To determine the transactions that has come about concerning a property:
Request for an Encumbrance Certificate is to be made to the registration office, together with an attested copy of address proof, information about the property, its title particulars, and the relevant cost for obtaining the Certificate.
The official will examine the Indexes for particulars in the specific period.
An Encumbrance Certificate with the particulars of the transactions in the specific period, or if no transactions have turned out, a Nil Encumbrance Certificate (NEC), is issued.
The Encumbrance Certificate is issued 15-30 days from the date of request of the application.
The forms of the applications and official documents are specified in the annexure to the regulations of the Registrations Acts of the relevant states. As a rule, the request submission is made in Form No. 22 and the Encumbrance Certificate is issued in Form No. 15, NEC in Form No. 16 of the relevant state system.
The beneficiary is required to submit papers like death certificate of the dead, the birth certificate of the beneficiary, a copy of the ration card, bank declaration of the beneficiary to prove that the beneficiary is undoubtedly the legal successors. Besides, the following documents are needed to transfer the title of the inherited property.
Original purchase deed of the property
The Encumbrance certificate
How to make sure if your property is verified legally?
Here is a do-it-yourself memorandum to make out whether if your property is legally verified or not.
Confirm the title papers
Request for bank approvals
Tally the standard plan with real site
Settle up property tax slips
An encumbrance certificate is required in a property transaction as proof of free title, tenure, and possession. It is a certificate issued by the registration powers. While purchasing a property, it is essential to verify that it does not have any authorized dues. A potential buyer must make sure the property has a comprehensible and marketable title.
Selling a property in India by a US resident is not hard nor is any special permission mandatory.
Only in the vent of purchasing a property by a US resident, one needs special permission from RBI.
The US citizen is entitled to both OCI card as well as Visa.
As Visa has a smaller lifespan and needs to be got hold of in each event of the visit to India, it would be better if you apply for OCI card as it would deal out the process of application for Visa forever while staying or visiting in India.
Check this list of certificates and documents that an NRI needs to sell a property.
Papers from the Society
Approved Building Plan
If your property is clear, and the inquiry and investigation conducted are brought out to be clean then the “no encumbrance certificate” is made available. By and large, it takes around 15 to 30 days from the process of application to getting your encumbrance certificate.
Every time you invest in real estate property, it is necessary to make sure that the land and property you plan to buy does not have any pending financial levy. To make sure this and have a clear property title, you should acquire a non-encumbrance certificate from the division of the Sub-Registrar of your city.
It’s better to register For Encumbrance Certificate online. Just log onto the online portal of local government registration and choose the option to apply for Encumbrance Certificate online.
The candidate is supposed to select the option “Submit Application for Encumbrance Certificate or EC” under the option “Certificates.”
Next, a form window will come up where you have to enter particulars like the sub-registrar’s office, region, candidate’s name, house no, mobile no, and all that.
Subsequently, you will have to enter the same details a printed Form 22 would require. It takes account of resurvey numbers as well as property boundaries.
As soon as the form is filled from top to bottom, click “Submit Application.”
You’ll have to keep a record of your application along with a reference number. The average processing time for an Encumbrance Certificate is around 2-3 days.
An Encumbrance Certificate is issued based on the term and if any transaction has ensued during this stage. There are two types of Encumbrance Certificate:
Form 15 is issued if the credit, sale, mortgage and other deeds of your property are registered with the sub-registrar. The Form comprises of registered property transaction particulars in the owner’s name for a specific time.
The Non-Encumbrance Certificate is issued on Form 16 if nil transaction happens throughout the sought period. When Form 16 is published as a Non-Encumbrance Certificate, it proves that the property is free from all the legal responsibilities for the given episode. This certificate does not take account of any unregistered property transactions.
An Encumbrance Certificate of a property is proof of either no outstanding dues or financial issues on it. That means such property can be sold without any restriction as the title is clear. Anyone can procure Encumbrance Certificate from authorized office. There are two forms for issuance of encumbrance certificate as we discussed earlier. Form 15 consists of a mortgage, records of sale, lease, gift, and partitions.
Formats of form 15 vary from state to state but the standards are common. See one by one listed below:
Column 1: displays the serial number of property transaction
Column 2: description of the property is provided such as address, boundary information, and area.
Column 3: date of deed execution is mentioned
Column 4: nature of property transfer is written i.e gift, sale, and partition along with the amount
Column 5: name of the executing party
Column 6: name of the party in whose favor the deed is executed
Column 7: number vol. of registration
Column 8: page no. of the record book that represents the property's entry
Column 9: reg. number of the executed document is shown here
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