This document plays a pivotal role in both buying and selling of a residential property. In fact, the absence of this certificate can lead to the failure of a property deal. So, scroll down the page and know details about this important paper.
What is Encumbrance Certificate?
This document certifies that the property you are selling/buying is free from all kinds of liabilities such as mortgage against property, loan against property, homeloan on the residential property and more. The encumbrance certificate assures the aspiring prospect that the property is worth investing and he/she will not fall into the trap of any fraudulent home seller.
Steps to Obtain Encumbrance Certificate
Firstly, apply for an Encumbrance Certificate [EC] at a registration office according to the locality in which the property falls. The application requires property details and property title along with attaching the attested copy of buyer’s address proof. The procedure to obtain an EC is simple as one is required to pay the nominal application fee along with the submission of Form-22.
Secondly, get the EC alias Encumbrance Certificate within 15-30 days after the authority inspects the particular property.
Thirdly, the EC is issued in two forms depending upon the history. You can get Encumbrance certificate under Form-15 in case the property has a record of transactions. In another case, you will obtain EC under Form-16 and will be said as Nil Encumbrance Certificate which means that zero transaction has taken place against this property.
Benefits of Obtaining Encumbrance Certificate
An aspiring home buyer must have this certificate as the banks are likely to deny homeloan against property that won’t have an Encumbrance Certificate.
You can prove title hold on the property in future and thus anyone else can’t showcase his/her right on the particular property.
Disbursal of a homeloan become easier after producing an Encumbrance Certificate as it proves that the property you are buying is liability-free.
Difference between Encumbrance Certificate and Occupancy Certificate
Here, you must understand the difference. An occupancy certificate is the one that makes you eligible for various civic amenities such as sewer, water pipeline, electricity and more. But, an OC won’t declare the property liability-free. So, you must ask for an EC that is Encumbrance Certificate from the seller to get an official acknowledgement that the property you are going to own is debt alias liability-free.
How Encumbrance Certificate is Different from Completion Certificate
An EC that is Encumbrance Certificate is completely different from the Completion Certificate. A CC is a proof that states the construction of this property is completed according to the laws. Thus, you must acquire an EC before finalizing the deal.
Keep these points in mind while stepping out in-order to secure a home buying deal anywhere in the country.
(The writer works for a real estate news portal www.realtymonks.com and writes about property market and real estate trends.)