Public
in general frequently use encumbrance certificates in property transactions as
the sole evidence to ascertain free and marketable title of the vendor. They
are under the impression that the encumbrance certificate would disclose all the charges created on a property. But, it is not so.There may be several
types of encumbrances, which will not be reflected in the encumbrance
certificate. The application for encumbrance certificate is to be submitted at
the jurisdictional Sub-Registrar's office under whose jurisdiction the property
falls. The prescribed application form for obtaining an encumbrance certificate
is Form No.22.
In
order to get a proper and valid certificate, it is very important that the
applicant should clearly mention in the application the period for which the
encumbrance certificate is required, detailed description of the property, its
measurements, boundaries, and the person who is applying. The encumbrance year
commences from April 1st of a calendar and closes on March 31st of the next
calendar year. Any fraction of the encumbrance year attracts fee for the full
year.The fee prescribed is for single property and per individual application
form.
Form No.15 or 16
The
encumbrance certificate is issued either in Form No. 15 or 16. If the property
does not have any encumbrance during the particular period for which
encumbrance certificate is sought, then encumbrance certificate in Form No.16
will be issued i.e., Certificate of Nil Encumbrance will be issued. If the
property has any encumbrance registered during the particular period for which
encumbrance certificate is sought, then encumbrance certificate in Form No.15
will be issued. The certificate in Form No.15 discloses the documents
registered in respect of the property, the parties to the deed, nature of
encumbrance, amounts secured or transacted in the said deed, registered number
of the document, book no., volume no., and date.
The
encumbrance certificate issued always will be in the language in which indexes
are prepared in particular Registrar or Sub-Registrar's Office. If the indexes
are not in English and the applicant wants certificate to be prepared in
English, then the request of the applicant will be complied with to the extent
possible. In Karnataka, now computerized encumbrance certificates are issued.
There
is a provision for inspection of the records of the property maintained in the
office of the Sub-registrar by the applicant himself/herself. In case the
applicant prefers not to exercise this authority and merely submits application
for issue of encumbrance certificate for a particular period, the department
would be issuing the encumbrance certificate with due diligence and care.
However, there is a rider clause in the computerized encumbrance certificate to
state that the department shall not take responsibility for mistakes, if any,
in the encumbrance certificate.
Limitation
Though
an encumbrance certificates discloses all registered encumbrances on a
particular property during a specified period, it has certain limitations. The
Encumbrances disclosed in the certificate are for the period for which
certificate is issued and encumbrance created during the period prior this
period or during the later period is not reflected in the certificate. The
encumbrance certificate is issued in respect of the property as detailed in the
application form and not as per the registered documents of the property. Thus,
if the description of the property described in the application does not match
with the details of the property as shown in the registered documents, then
details of such documents are not reflected in the encumbrance certificate.
The encumbrance certificate discloses the
encumbrances created by documents which are registered in a particular office.
In other words, it is the extract of the property register maintained in the
Sub- Registrar's office and the document which is not registered and where under
any charge is created does not get reflected in the encumbrance certificate.
Further, there are certain documents for which registration is not compulsory
but registration is optional. These documents include testamentary documents,
document creating lease for a period of not exceeding one year, any decree or
order of a court, or award. Since these transactions are not compulsorily register
able, they do not find any mention in encumbrance certificate.
Agricultural Land
Agricultural
lands are generally inherited. The change of ownership is recorded in revenue
records, mutation register of village panchayath.Such changes of ownership are
not registered. As such encumbrance certificates do not reflect the true
ownership of the agricultural land. R.T.C,Mutation extracts give complete
details of change of ownership, details of possession, conversion of
agricultural land to non-agricultural purposes.Therefore, it is better to
insist and rely on RTC and mutation extracts in case of agricultural lands in
addition to the encumbrance certificate.
It is
always advisable to obtain encumbrance certificates for a minimum period of 43
years and to verify whether the encumbrance certificate is issued for the
complete period of your requirement and whether it contains the boundaries and
the measurements of the property, signature of registering authority and the
office stamp apart from disclosing the names and the signature of the persons
who have searched and verified the records of the property. It is also
advisable for the prospective purchaser of property to inspect the property
personally and to verify and confirm that the original title documents are
available with the vendor. In addition to this, some additional safeguards like
paper notification, searching in jurisdictional courts for any pending cases
may also be undertaken to protect the interests of the purchaser.
It is
advised that for tracing the clear and marketable title of the property, the
purchasers should not mainly rely on the encumbrance certificate issued by the
Registrar or Sub-Registrar's office, but has to examine all other relevant
documents, such as title deeds, latest khata certificate, khata extract, and
tax paid receipts.
For more details,
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