Why Should You Get A Non Encumbrance Certificate?

Before buying a house, it is not just essential to look at the financial and social aspects of the property such as a good neighbor, home of our budget, etc. However, it is equally crucial to analyze the legal issues of the house as well. Just like ensuring that property has been constructed safely, you must also obtain essential documents related to the property as well. One such documents is a non-encumbrance certificate.

What is a non-encumbrance certificate?

The term encumbrance means liability and non-encumbrance means the property is ‘free from burden’. Further understanding, a non encumbrance certificate represents that the property is free from any legal or monetary charges, and there are no pending dues or mortgages against the property. It contains details of all the registered transactions listed on the property. However, if there are any transactions such as testamentary documents like wills or short-term leases that are not registered, they will not be listed on the certificate.

Why is it essential to have a non-encumbrance certificate?

A mortgage loan like a house loan or loan against property does not require a high CIBIL score or income levels. However, banks and non-banking institutions provide a credit against the mortgage of a house or property. Before giving the loans, they ensure that there are no pending dues or other mortgages taken on the same home or property. Also, if you need to buy or sell the property, you need to have a non-encumbrance certificate for the last 10-15 years, which is issued from the start of a new financial year that is from April 1st to March 31st. Thus, to claim the free ownership of the property, you need to obtain a non-encumbrance certificate.

How can you obtain a non-encumbrance certificate?

• In seven states, namely Andhra Pradesh, Telangana, Tamil Nadu, Kerala, Karnataka, Gujarat, Orissa, and Pondicherry, you can obtain a non-encumbrance certificate by filling the application form 22 online on the official website of the respective state’s land registration portal. On the website, look out for the option of “Apply EC” and then submit the form and click on the save/update button. 
• Also, enter the period for which you want the EC. Submit the necessary EC fee. The fee for getting a non-encumbrance certificate starts from Rs. 100 which may vary from state to state. As you fill in all the documents and forms, you will be redirected to the ‘Acknowledgement’ window, and you can now view/print the encumbrance certificate.
• You can also apply for a non-encumbrance certificate offline by visiting the sub-registrar office, where the property is registered. As you visit the office, you will be asked to fill the application ‘Form 22’ and submit the required fees to the Executive Magistrate or Tehsildar. 
• You also need to submit the documents such as The title and property details, The registration copy of the property, Address proof of the person applying, Copy of property sale deed/gift deed/release deed or partition deed etc. Also, don’t forget to provide address and identity proof such as the complete address of the house, utility bills such as telephone bills, electricity bills etc.
• The executive magistrate will then verify the documents for which you want to get a non-encumbrance certificate. After verification of documents, you will be provided with an EC or non-encumbrance certificate. It usually takes 15-30 days to get a certificate. Thus, you must apply for it in advance if you want to get a home loan.
• Also, the magistrate will provide the certificate in the language he maintains his record. However, you can always request to get a copy in English by paying some additional fees.

Thus, to avoid any hurdle in getting a loan you must obtain a non-encumbrance certificate to claim the ownership of the house.

Summary: Why Should You Get A Non Encumbrance Certificate?

The term encumbrance means liability and non-encumbrance means the property is ‘free from burden’.A non-encumbrance certificate represents that the property is free from any legal or monetary charges, and there are no pending dues or mortgages against the property. It contains details of all the registered transactions listed on the property.

Before giving the mortgage loans, banks and non-banking institutions ensure that there are no pending dues or other mortgages taken on the same home or property. Also, if you need to buy or sell the property, you need to have a non-encumbrance certificate for the last 10-15 years, which is issued from the start of a new financial year that is from April 1st to March 31st. 

You can obtain a non-encumbrance certificate by filling the application form 22 online on the official website of the respective state’s land registration portal or by visiting the sub-registrar office where the property is registered.