Encumbrance Certificate

An encumbrance certificate specifies charges created on a property. A property may be mortgaged as a security for a debt or obligation. In any transaction of sale or purchase of property, a no encumbrance certificate is a very important document. It is also issued for the purpose of mortgaging a property to avail a loan. The certificate certifies that the property in question is not already mortgaged.

In case property is purchased with borrowed money or is offered as a security for a loan, a charge is created in the form of an encumbrance. If it is already mortgaged, the liability of the outstanding loan will also devolve on the new owner. The certificate discloses the encumbrance status of a particular property . It is issued for a particular period of time and does not cover any period prior to or after the period mentioned .

The certificate is an extract of the register maintained by the sub-registrar's office, which in turn is based on documents registered with the registrar's office. In case a particular document is not registered with the office of the registrar , it won't be captured in the encumbrance certificate .