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Why is it important to have 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 following points show the importance of an Encumbrance Certificate: 

  • The Encumbrance Certificate would represent the property’s legal and financial links, such as whether the owner has taken out a loan against it. The EC must reflect If the property is involved in a legal dispute.
  • Purchasing a home is such a significant investment, buyers should check for any encumbrances that may be transferred to them along with the property ownership. Obtaining an “Encumbrance Certificate” for a property assures a buyer that there are no financial or non-financial liabilities such as liens, existing debts, or leases on the property. 
  • The document is also required when applying for a loan against property or a house loan. Buyers should obtain it to secure the legal title to the property and ensure that they will be approved for the loan. 
  • The certificate is given to the Village / Panchayat Officer to update the land tax records if the concerned property or land tax has not been paid for more than three years. 
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