Does the applicant own it?
The title document answers this.
Title documentNet Worth & Solvency Glossary · Documents
Encumbrance Certificate, Read Before Certifying Property
noun · abbreviated EC · a search of the registered entries against one property, for one period
Definition
An encumbrance certificate (EC) is a record, drawn from the property registration records, of the transactions registered against a property over a period the applicant chooses: sales, mortgages, gifts, partitions and similar instruments.
It shows what has been registered against the property in that window. It does not prove that nothing else exists.
Read a clean EC as
Three limits sit inside every encumbrance certificate, clean or not.
- Registered onlyWhat was registered against the property. Nothing that was never registered.
- That office onlyThe records of the sub-registrar's office that was searched.
- That period onlyThe window the applicant asked for. Nothing before it, nothing after it.
A reader keeps all three in mind before treating a clean EC as proof.
Meaning
01What an encumbrance certificate records over a chosen period
An EC lists the registered transactions affecting a property in the period searched, with the parties and the dates. That limit is the most important thing to understand about an EC. It records only what was registered, with that registration office, in the period asked for. Anything outside that does not appear.
Also met as
Non-encumbrance certificate
Sometimes called a "nil EC": the same search returning no registered transaction for the period. A statement that nothing was registered, not that nothing exists.
Appears on the EC
Registered in the period- SalesRegistered transfers of the property, with the parties and the dates.
- Mortgages by registered deedThe entry an EC is most often read for.
- Gifts and partitionsRegistered instruments that move or divide the holding.
- Similar registered instrumentsAnything else entered against the property at that office in the window.
Does not appear
Outside the search- Before or after the periodCharges created outside the window searched.
- Never registeredArrangements never registered, such as some mortgages created by depositing title deeds with a bank.
- Pending in courtDisputes over the property that no registered instrument records.
- Tax or municipal duesAmounts owed on the property that sit outside the registration records.
A clean EC narrows the risk. It does not remove it.
On a certified statement
02Why a clean EC strengthens the asset side of a certified statement
Even with those limits, a clean EC removes the largest doubt about what is usually the largest asset.
Does anyone else have a claim on it?
The EC answers most of this.
Encumbrance certificateAttaching both to the property entry means the recipient does not have to run their own search before acting, which often decides how quickly a file moves.
In a net worth certificate signed by a CA, the property entry states which EC was read and what period it covered.
The period matters as much as the result
Three things a reader checks- Back to the acquisitionA search that does not reach back to when the applicant acquired the property proves less than it appears to. So the search runs back to the acquisition.
- The window is namedThe certified statement names the window covered, not just a clean result.
- It dates quicklyA clean EC speaks to the day the search was run, so a reader looks at how recent it is.
Getting one
03Sub-registrar applications, Form 15 and Form 16 outputs and state portal practice
An EC application specifies the property and the period to be searched.
The application states
- The propertyIdentified as the registration records hold it.
- The period to be searchedChosen by the applicant, confirmed with the reader first.
There are usually two kinds of output.
Transactions found
One listing the transactions found in the period, with the parties and the dates.
Nothing recorded
One certifying that no transaction was recorded in the period: the nil EC.
Practice differs between states
- Online applicationsMany states now accept applications online through their registration portal, and some return a digitally signed EC.
- Older recordsSome hold older records only in manual registers, which makes searches of earlier years slower.
- Length of searchLenders also differ on the length of search they will accept, so the period is confirmed with the reader before applying.
Getting an EC is a state registration process, not a service Patron provides.
Written by Subham Jhunjhunwala · Reviewed by CA Sundram Gupta
This entry describes Indian practice in general terms. State registration rules govern each EC.
Need help with a certificate that uses encumbrance certificate? See our Net Worth Certificate.The certified statement in which the property entry names the EC read and the period it covered.