An encumbrance certificate is a legally issued paper or document that certifies that a property is free of all financial and legal obligations. Aside from that, it displays the property’s condition and the total number and details of its previous owners. It also contains information on previous ownership transfers and all of the property’s mortgage obligations. The encumbrance certificate cannot be obtained for properties for which the mortgage has not been completed.
Types of EC
A buyer can receive one of two types of encumbrance certificates which are categorized based on encumbrance
FORM 15?(Encumbrance certificate)
16th Form (Non-encumbrance certificate)
Form 15: If the property’s sale, mortgage, or other deeds are registered with the corresponding region’s sub-registrar, this sort of encumbrance certificate is given. It provides all property transaction information in the owner’s name for a given time period. Form 15 also includes information about the type of encumbrance, such as gifts, leases, and partitions, as well as the parties involved, the document’s registration number, and so on.
Form 16 is a non-encumbrance certificate issued by the government (NEC). Because no transaction has occurred, this sort of certificate is provided if the property is free of all liabilities for the specified term. It does not, however, contain any unregistered transactions involving the property.
Note: While an Encumbrance Certificate provides all transaction facts about a property, it may not be sufficient to prove ownership. As a result, buyers should obtain a Possession Certificate in addition to an EC.