When pledging any immovable asset as collateral, it is important to provide an encumbrance certificate to the financial institutions. This document is evidence of the fact that the property in question is free of any financial and legal liabilities.
A property without this certificate cannot be used as a mortgage. Therefore, applicants who are not in possession of this certificate can always apply for one by following a few simple steps.
How to obtain an encumbrance certificate?
To get an encumbrance certificate from the sub-registrar office where the property is registered, follow the below-mentioned steps –
- The individual needs to make an application in Form 22 to the registrar at their respective state’s official land registration office
- This application should be accompanied by a stamp paper, purpose of certificate, attested copy of address proof, and details of the property
- Pay the prescribed fee along with application
- After receiving an application, a property inspector will check all transactions made against this property during a particular period
- The sub-registrar, after inspection, will issue an encumbrance certificate in Form 15 that details all transactions made against a property. If there aren’t any transactions, then this certificate will be issued in Form 16
- The certificate issuance will take close to 15 to 30 days after submitting the application
Also, interested applicants can apply for a possession certificate as proof of ownership along with this document.
Providing these certificates will help financial institutions to verify all property transactions and approve a lap loan application accordingly. In addition, some state Governments also provide an option of applying for this certificate online.
How to check the status of the certificate?
Follow this step-by-step process to check the status of EC certificate online –
1st : Visit the official website of the state’s land registration department
2nd: Click on “Certificate” on the menu bar
3rd: Then select “encumbrance certificate” followed by ‘EC status’
4th: Enter transaction ID to view the status of current EC certificate
5th: Input Captcha code
6th: After which, click on ‘download certificate’
Why is it important to get an encumbrance certificate?
The first thing to know about a loan against property is that financial institutions prefer assets that have a clear title. Therefore, providing an encumbrance certificate helps ascertain a property has no pending legal issues against it.
Moreover, an encumbrance certificate can provide details on aspects like mortgage biddings, change of ownership and associated charges. If the property doesn’t have an existing owner, it takes the applicant as the owner.
Documents necessary to obtain an encumbrance certificate
Since an encumbrance certificate is an important factor to consider while taking a loan against property, it is important to present attested documents for the verification process. Here is a list of documents to provide.
- Property title and details
- The registration copy of the property
- Address proof of the property owner or the individual applying for an encumbrance certificate
- Copy of the gift deed/ sales deed/ release deed or partition deed of the property if any of these deeds were executed
- If any of these deeds were executed, provide deed number, accompanied by registration number, including date and book number. Also, provide the applicant’s signature
Therefore, if the encumbrance certificate’s meaning is clear to individuals, they can easily obtain one to present during document verification for a loan against property. It will help financial institutions ensure that the property doesn’t come with any legal liabilities.
Also, to simplify the loan application process, applicants can opt for lenders offering pre-approved offers. These offers are also available on other products like home loan, loan against property, etc. So, to check your pre-approved offers, enter your name and contact details.
Hence, any individual applying for a loan against property is expected to present all documents, including an encumbrance certificate at the time of documentation. It will help borrowers to receive the loan amount without any hiccups.