Can you rely on EC?

Certainly no. Surprised?

Here is the necessary information why you cannot rely on Encumbrance Certificate issued by Sub-Registrar

EC (Encumbrance Certificate) is a record showing registered transactions pertaining to a property, issued by the office of Sub-Registrar.  Registered transactions such as sale, gift, partition, relinquishment, mortgage or any other deeds in respect of a particular property are recorded in the Encumbrance Certificate, for a particular period.

In the absence of any mandatory rule on EC to be obtained for how many years to verify the transactions over the property, most Banks and HFCs (Home Finance Companies) insist EC for the lasts 13 years, whereas it is advisable to obtain EC for at least 30 years or from the origination of title, wherever possible.

If one seeks EC for a particular period, if there are no transactions registered in that period, Nil EC will be provided in Form 16.

If there are one or more transactions, EC will be issued in Form 15, which provides the details of transactions property details, date of transaction, type of transaction (like sale/gift/mortgage etc.), consideration, market value of property, parties involved (like seller and purchaser or mortgaged by whom to which Bank/HFC etc) and registration number of document etc.

If EC has to be obtained for 30 or more years, it may not be available in one Sub Registrar’s office (SRO), as in the last 30 years the SRO’s have been increased from 4 to more than 40 numbers in Bangalore. As digitalization of records has happened in 2004, one can get EC from 2004 to till date in any one of Sub Registrar’s office. For the earlier period, one has to reach jurisdictional SRO for particular period in which records were maintained in that particular office and reach another SRO where later records were transferred. As such one may have to approach 3-4 SROs to obtain EC for 30 years period.

Is EC is full proof verification document?

Certainly not. Although fees are collected to issue EC, the issuing authority will not assure for the genuineness of information provided in the EC. At the bottom of EC, it is clearly mentioned (in the vernacular language) that issuing authority is not responsible for any mistakes or omissions in the information provided in the EC.

 

Then how to verify charges on the property?

It is prudent to opt for Search Report, apart from obtaining EC. A Search Report traces all transactions registered in SRO for a particular property over a specified period. The advocate entrusted with the assignment, visits the jurisdictional SROs and inspects the original records maintained by SRO and then issues a certificate, known as ‘Search Report’.

Search Report contains similar information which provides the details of transactions, property details, date of transaction, type of transaction (like sale/gift/mortgage etc.), consideration, market value of property, parties involved (like seller and purchaser or mortgaged by whom to which Bank/HFC etc) and registration number of document etc.


Rajendra Deshpande, Managing Director, PropSeva®

Chartered Engineer                        Mortgage Banker