What is An Encumbrance Certificate? – All You Need to Know

March 22, 2024 in Knowledge Base

What is An Encumbrance Certificate? – All You Need to Know

Ensuring that the property you're interested in is free from legal complications and debts is essential. An Encumbrance Certificate plays a crucial role in this regard. In this blog, we'll understand all about the EC. Its definition, types, benefits, and the process of obtaining one will be discussed here. We will also know why it is required and how to get this document. Whether you are a property buyer or seller, it is important to understand an Encumbrance Certificate.

Encumbrance Certificate Definition

An Encumbrance Certificate is often referred to as an EC. It is a legal document that provides a complete record of all transactions involving a particular property. It acts as proof of free title/ownership/interest in the property. The local Sub-Registrar's office typically issues this certificate. The EC is a vital document in real estate transactions.

Encumbrance Certificate Process

The process of obtaining an EC involves several steps.

  • Visit the Sub-Registrar's Office:

    To start, you need to visit the Sub-Registrar's office. This is where the property is registered. Each property is registered in a specific jurisdiction. So, ensure you visit the correct office.
  • Submit the Application:

    You will need to apply for the Encumbrance Certificate. The application form can usually be obtained from the Sub-Registrar's office. You can also download it online.
  • Provide Property Details:

    You have to provide detailed information about the property. This will include the survey number, location, and the period for which you need the certificate.
  • Pay the Fees:

    A nominal fee is associated with obtaining an Encumbrance Certificate. Make sure to pay this fee as per the prescribed rates.
  • Verification and Issuance:

    The Sub-Registrar's office will verify the property's transaction history. This is after receiving your application and fees. They will issue the Encumbrance Certificate for the requested period. This will be done if there are no encumbrances or disputes.
  • Collect the Certificate:

    Once the certificate is ready, you can collect it from the office. One needs to cross-check every detail before they collect the certificate. 

Types of Encumbrance Certificates

Types of EC are as follows.

  • Form 15:

    This certificate provides details of transactions over the property for a specified period.
  • Form 16:

    Form 16 is a certified copy of an entry in the land records maintained by the government. It is typically required when there is a need to prove the ownership of the property.

Benefits of Encumbrance Certificate

We have understood what an EC is and how to obtain one. Now, let's explore its benefits.

Legal Clarity

An Encumbrance Certiqficate provides legal clarity in the real estate landscape. It is a record that properly outlines all transactions involving the property. This means it reveals any legal disputes, liabilities, or encumbrances. By obtaining this document, you ensure the property is legally clear. This makes it free from any hidden legal complications. This legal transparency is invaluable for both buyers and sellers.

Proof of Ownership

Establishing ownership is of utmost importance when it comes to real estate matters. An EC serves as evidence of ownership and title over the property. With this certificate, you have a tangible document clearly stating your claim. This is a critical component in property transactions. It proves that the seller owns the property. This also helps instil confidence in the minds of both parties involved in the transaction.

Smooth Transactions

The acquisition of an Encumbrance Certificate is an investment. It assists in a smoother and more efficient property transfer process. For buyers, it means they can proceed with confidence. They know that the property they are investing in is legally sound. For sellers, it simplifies the process of showcasing the property's legitimacy. This document acts as a bridge of trust between the parties. It reduces the likelihood of disputes and streamlines the transaction.

Financial Transactions

Encumbrance Certificate is an indispensable asset when it comes to financial matters, such as availing loans or mortgages. Lenders, including banks and financial institutions, use this document. It is to assess the marketability and clear title of the property against the loan. You can inform the lenders that the property is unencumbered. It means that the property is free from any legal or financial obligations. Otherwise, it could hinder the loan process. Hence, EC increases your chances of securing the loan.

Prevents Fraud

Property fraud is an unfortunate reality in the real estate world. Dishonest individuals may attempt to sell properties they do not rightfully own, which can lead to legal battles and financial losses for unsuspecting buyers. An EC serves as a safety measure against such fraud that verifies the legitimacy of the property's ownership. It also ensures that you are dealing with the rightful owner or seller. The protection is invaluable in an environment where trust can often be tested. The certificate allows you to make informed decisions while avoiding fraudulent transactions.

The Role of Technology

Obtaining an Encumbrance Certificate has become accessible and convenient in this digital age. Many government agencies now offer online services for applying for and receiving these certificates. This digitisation reduces the time and effort required and enhances transparency in the process.

Why is an Encumbrance Certificate Required?

An EC is required for several reasons.

  • Property Transactions:

    The certificate ensures that the property has a clear title and is not involved in any legal disputes. This is during both buying or selling a property.
  • Loan Application:

    Banks and financial institutions insist on an Encumbrance Certificate. It is when you apply for a loan against the property to assess its marketability and clear title.
  • Property Disputes:

    This certificate can serve as crucial evidence in court in the event of property-related disputes.
  • Due Diligence:

    Real estate developers and investors obtain these certificates during due diligence. It is to assess the property's history and marketability.
  • Legal Matters:

    Lawyers may require an EC to represent their clients. This is done to solve property-related legal matters.


An Encumbrance Certificate is a vital document in the world of real estate. It provides clarity and assurance to both buyers and sellers. The certificate ensures that property transactions are legally sound and transparent. Obtaining an EC should be a crucial step in your real estate journey. Consider checking out Adani Realty's listings if you are looking for a range of properties in major cities of Ahmedabad, Mumbai, Pune or Gurugram.

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