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  • Category: Indian Law

    For how long Encumbrance Certificate needs to be seen before buying a property?


    Have a query about validity of Encumbrance certificate? On this page you will get answers to all your queries.

    For how long Encumbrance Certificate needs to be seen before buying a property? I am advised to apply Encumbrance Certificate maximum for 30 years before buying any property but if such property have any encumbrance before 30 years then what to do?
    Experts: do advice.
  • #139625

    Encumbrance certificate is obtained to know if the property is encumbered to any other person or organisation by pledge or hypothecation. It also gives us if there is any encumbrance mentioned on the property by government for any statutory dues. A NIL encumbrance certificate mentioning a period means that there are no recorded encumbrances on the property during that period.

    A mortgage has a time limit of 12 years. That means if someone has a claim on the property, or property is mortgaged to that party, he has to file acase within 12 years from the date of mortgage. After lapse of 12 years he cannot file a case against the property for that mortgage.
    So if an encumbrance certificate for a continuous period more than 12 years means the property is not mortgaged and is free of encumbrance. Hence generally encumbrance certificate is definitely to be obtained for the last 13 years.

    However an amendment to Indian Contracts Act, a few years ago has specified that, if the property is mortgaged or encumbered to a government or statutory dues then the limitation period is 30 years. So as abundant precaution some credit institutions insist for obtaining NIL encumbrance certificate for a period of last 30 years.

    Here a word of caution. Till a few years ago, 'Equitable Mortgage ' in favour of specified credit institutions(like banks) were not recorded in Registrar's office. So an encumbrance certificate will not show any mention of equitable mortgage if any. That is why it is to be ensured that the original title deeds of the property are available at hand. This along with a NIL EC for 13 or 30 years is needed.

  • #139750
    Thank u so much for ur reply Venkiteswaran Sir... so i dont need to bother about the encumbrance of a property before 30 yrs.

  • #139751

    If an encumbrance is found, you have to go in detail about it. The encumbrance could have been eliminated or satisfied and removed, but not informed and recorded in the registry. If so then you have to get it removed by the prospective seller submitting proper records to the registrar office. A new encumbrance certificate obtained after that showing the removal.
    But if the encumbrance is related to some court case, better to avoid that property, than taking risk.

  • #139766

    Prima facie, from what is narrated above, I do not see any problem regarding this. Original sale or partition or transfer document, Original parent document, NIL encumbrance certificate for more than thirty years, latest tax paid receipt etc. are the normal requirements to show the title to a property.

    However if there are any special local laws and regulations regarding agricultural lands, then I cannot say on that.
    Moreover, to satisfy yourselves beyond doubt, you may also show the documents to a known and experienced layer and get his opinion. The fee may be normal and affordable and it is worth paying. If you don't know such a lawyer, you can approach a commercial bank who give loans against property .They will have lawyers for their matters. You can use his service paying the fee.

  • #139792
    Thank u so much Venkiteswaran Sir


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