What is Encumbrance Certificate? (EC) 

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. Apart from that, an Encumbrance Certificate is required if you intend to apply for a loan to purchase that property or if you intend to use the loan to purchase another property. If the property owner has not paid land tax to the government in the previous three years. 

In the real estate sector, an encumbrance certificate is often used. The certificate verifies that a specific property is free of any financial or legal obligations, such as a mortgage or a loan. As a result, it is a major consideration when acquiring a home. In fact, an “encumbrance” is a charge or liability placed on a specific piece of property that is used as collateral for a mortgage or loan. 

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