Things you Should Know About Encumbrance Certificate

An encumbrance certificate is an assurance certificate that signifies whether the property in question is under any legal or financial liability. This document ensures an individual’s full ownership of the concerned property. One needs to submit this certificate along with other property documents to avail of a loan against property

Therefore, borrowers should know everything about this document before loan application. 

Encumbrance certificate meaning and benefits

An EC guarantees free ownership or title of a property purchased or sold by an individual. Apart from this, loan borrowers presenting this document during application are eligible to receive monetary advances from a financial lender against the property. 

Furthermore, there are two types of EC on a property. They are as follows:

  1. Form 15: It comprises records regarding Mortgage, Lease, Partition, Sales, Gifts, etc. An applicant can specify a certain time for which he requires information. For properties with previous encumbrances during the specified time, the sub-registrar’s office issues a Form 15. 
  2. Form 16: This document indicates that the concerned property is clear of disputes and transactions since the EC has been requested. Therefore, a nil encumbrance certificate on Form 16 will be issued. 

Before when a borrower applies for an EC online, he or she must know its importance:

  1. It assures applicants that their properties are not under any financial liabilities like outstanding loans, leases or legal rights. 
  2. Presenting an encumbrance certificate during a loan against property application increases a borrower’s eligibility. 
  3. One needs to submit this document during property mutation. 
  4. In the case of defaults in land tax payment for more than 3 years, an individual must submit this certificate to update land tax records. 
  5. During PF withdrawal for a property purchase, one may require to present a certificate of encumbrance. 

One must ensure to obtain this certificate for LAP application. Borrowers can secure a loan against property from reputed financial institutions that offer a high-value loan amount. 

Additionally, one must opt for lenders who provide pre-approved offers and ensure hassle-free loan processing. You can check your pre-approved offer by inputting basic information like name and phone number. However, to qualify for a loan against property, one must meet simple eligibility criteria. 

Documents required for an encumbrance certificate

While applying for a land or property EC, one must present the following documents:

  1. Application form. 
  2. Copy of address proof, attested. 
  3. Documents mentioning property address that also includes survey number. 
  4. Registration document of property, including book and deed numbers, date and signature of the applicant. 
  5. Release, sale or partition deed copy. 
  6. Copy of power of attorney. 
  7. Purpose of application. 
  8. Aadhaar card. 

Upon arranging these documents, one can easily proceed to the step-by-step guide to apply for a loan against property.  

Nevertheless, it is vital to understand the steps to obtain a certificate of encumbrance before procuring a property loan

Steps to apply for an EC online

It is crucial to note that few states like Andhra Pradesh, Tamil Nadu, Kerala, Odisha, Puducherry, and Telangana offer encumbrance certificates online. Although the steps to apply for an EC may differ across states, here are some basic steps to follow:

  • Applicants need to visit the official portal of their respective states. 
  • They must navigate and tap on the Government Forms section. 
  • Next, applicants need to locate the Stamp and Registration section and click on it. After that, they must select the Application form of the Encumbrance Certificate
  • Along with this, an individual should download and fill up Form 22 and attach the documents with it. 
  • Finally, they must submit the form and obtain the acknowledgment slip for future references. 

A sub-registrar’s office will inspect the property physically and check for any previous deeds during the requested period. Generally, the processing of online applications takes 2-3 days. After 6 to 30 days, an applicant will receive the EC from the Sub-registrar’s office. 

Therefore, a quick look through the aforementioned pointers will help an individual obtain an Encumbrance certificate effortlessly. 

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