Is an Encumbrance Certificate is important for property buying

When buying a home/flat or a property there are numerous things to consider. Property buying includes many complications and documents that many home purchasers do not comprehend in the process, finalizing the process without elucidation makes undeniable irritation. In order to have a clear and clean transaction, there is a need of one imperative document named as Encumbrance certificate.

The term Encumbrance implies liabilities or charges which are produced on a property, which means as a security or a guarantee for any debt or a loan against property. Encumbrance Certificate contains all the past transactions done on a particular property for a certain period of time. Moreover, it works as evidence that the property is free from legal liabilities and charges and it can give affirmation to home buyers to purchase a property as it has free title and clear ownership. This Encumbrance certificate is very crucial for property buying as well as applying for loan against property or home loan.

To grant a home loan or loan against property or to confirm that the property is free from liabilities many banks and institutions demand 13 years of encumbrance. For clear and clean information every home buyer should demand 20-30 years of encumbrance certificate. This Encumbrance certificate can be obtained from the registration authority office where the property deed has been enlisted.

The encumbrance certificate is issued in the form of two different kinds namely Form 15 and Form 16 based on the time period.

Form 16: Encumbrance Certificate on Form No. 16 will be issued if the property has no encumbrances registered during the requested period of time. This is a Non Encumbrance Certificate and it ensures that the property is free from liabilities for the requested period of time. This certificate does not include unregistered property transactions.

Form 15: Encumbrance Certificate on Form No. 15 will be issued when the particular property has registered any encumbrance during the requested period of time. The Form 15 includes the mortgage details, documents registered on the property, other deeds, Book Number, Volume number with date wise. All the information included in the Encumbrance Certificate is maintained by the registering authorities.