The Role of an Encumbrance Certificate in Property Transactions
So, do you want to buy a property? It is wise to have some information about the Encumbrance Certificate (EC). Whether its your dream home or a property you want to purchase in alluring location, an EC provides concrete evidence and important facts relevant to property transactions as to whether the property has clean title and debts. It is legal documentation that details whether a loan is warranted against the subject property. How many mortgages does the property have? This documentation answers that concern.
Encumbrance certificates are very useful for people seeking home loans, transferring, buying or selling property or even taking loans against the property. Let us now go deeper into what is an EC certificate and its significance as well as how it facilitates the process of making deals with great integrity of processes.
Why is an Encumbrance Certificate Important?
Like all participants in property transactions, so too do all stakeholders of an EC understand its significant. For example, if you are trying to locate apartment projects in Kerala, it becomes important for you to check the existence of EC for the property. Reason as to why an EC is important are as follows:
1. Proof of Ownership
An encumbrance certificate is a document which will dispel all doubts regarding ownership of a land property or any other property. This confirmation of ownership of a property ensures that in the future no one else will decide to lay legal claims on the said property or land.
2. Prevention of Inherited Liabilities
Under the stress of acquiring a property, a purchaser might unknowingly inherit old encumbrances. An encumbrance certificate shows that this other person who is selling you the property has not taken any debts or even loans against the property being sold which means that as a buyer you never have to look around for debts taken in the past by the seller.
3. Tax Record Maintenance
After three years if unpaid property taxes are not covered an encumbrance certificate is submitted to the relevant authorities as a means of making changes to archival tax records for the property or even the land in question.
4. Loan Approval Requirement
An encumbrance certificate is often seen as a requisite for an individual anticipating home loans or loans against property. It helps relieve the worries of the lenders since they know that there are no pending lawsuits against said property.
5. Aiding in the Recurring of Property Changes
Mutation holds the name of the new owner of the property sold or transferred in official documents. Additionally, EC assists in this step as verifying the property’s release from liabilities is done.
6. Withdrawal Benefits from PF Account
Additionally, an encumbrance certificate is also a requirement for individuals wishing to make a withdrawal of their Provident Fund (PF) account
Steps for Applying for an Encumbrance Certificate
The Steps Involved in Applying for an Encumbrance Certificate Electronically
A significant number of states in India now offer an online application provision for Encumberance Certificates. You only need to access the state’s corresponding land registration website completing the necessary sections and paying the appropriate fees. If the Certificate is already Out, you can download it from the internet, orally confirm ownership and even find the encumbrance status certificate.
The Steps involved applying for an Encumbrance Certificate without the Internet access applications.
For those states which do not provide an option for online application, applicants should go to the office of sub registrar. Compose a letter on plain paper and submit it together with form 22 and pay a token fee. After the filling, the files are in the hands of an inspector who reviews them and an EC is given which incorporates all the transactions done in the specified period. In the absence of transactions, “nil EC” is given.
Brief Description of Encumbrance Certificate Contents
An EC contains such details as:
Property Owner’s Name
Records of all property transactions.
- Property Description: These details are contained in the sales deed.
- Transaction History: This is an inclusive chronicle of all the transactions.
- Mortgage Information: Supporting papers that include loan or mortgage particulars.
It must be noted that, EC, as requested, serves the purpose for that particular period of time. The records are called for, by the sub-registrars, from the official records so that the transactions are above board. In most cases, the certificate is received in 15-30 days after the application has been made.
The Future of Encumbrance Certificates in Real Estate
The role of encumbrance certificates in transactions will likely deepen in the near future. As technology progresses, the future of ECs, which are stored digitally, will optimize the work related to their application, issuance, and confirmation in the systems. This overall digital transition is likely to lead to availability of EC in conjunction with other property related documents making it easy to transact when buying or selling properties or even when doing transactions with a mortgage lender.
Conclusion
First of all, if you sell or purchase real estate, be aware for what reason an encumbered land certificate is necessary and what advantages it has. Adapting the way to submit an application, check the status and download the certificate can help to keep calm as well as preserve time. All necessary paperwork is managed by credible builders, thus facilitating the clients and ensuring that the province rules are obeyed.
Dream Location focuses on making the entire home-buying process as effortless and straightforward for clients as possible by taking care of all necessary papers, allowing you to spend your time on other things that matter instead.
For more information about Dream Location and to search your dream property, please visit Dream Location on Google Map. Contact us today to know more about the best real estate deals in Delhi and North India; we will connect you to the right property investment.