EC-is it enough to know about the property

hi all,

There are lot of Il's who are buying, bought and planning to buy. and i have already talked about the points to be noted when planning to buy, even talked about taking EC (Encumberance Certificates...) so last saturday there was this article in THE HINDU detailing what the EC shows and what is not showed...and also why EC is important...thought of sharing it all with you....and if anybody has doubts after reading this let us discuss it in detail .....


Encumbrance is a legal term for anything that affects or limits the title of a property, such as mortgages, leases, easements, and liens. In regards to property transaction encumbrance certificate is a document issued by the Registrar’s office. The encumbrance certificate contains all the transactions registered relating to a particular property for a period (as required). It is advisable to get encumbrance certificate before effecting any transactions. This will als o help in arriving at proper entitlement of the property. The non-testamentary documents relating to immovable properties are registered under BOOK 1 and preserved permanently which only will reflect in the encumbrance certificate. The documents registered under BOOK 1 include the deeds of sale, gift, settlement, partition, release, mortgage, rectification, consent, exchange discharge, security cancellation, mortgage assignment and agreements of lease and sale. It also includes any documents for consideration or supplemental documents to the documents executed for consideration with the description of immovable property. Book No 2: records reasons for refusal to register the documents. Book No. 3: Register of Wills and authorities to adopt. Book No 4: Miscellaneous Register. Book No 5: Register of deposit of Wills.
Unregistered mortgages The encumbrance certificate issued by the Registrar’s office will not reveal some items which include unregistered mortgages, arrears in taxes to be paid to statutory authorities, status of tenancy, suits pending before the court acquisition proceedings. The Registrar is not liable to be sued, for any claim or demand for reason of anything done or not done in good faith in his official capacity.
The EC will not reveal documents that are executed but not registered within the time allowed by the Registration Act. The effect of registration is only to make the title absolute and unquestionable. A document may not be valid as long as it remains unregistered if no transaction has taken place during the period for which the application is made for EC.
Any order of attachment by the court will be communicated to the Registering officer within the local limits of whose jurisdiction the whole or any part of the immovable property is situated and the same will be reflected in the encumbrance certificate. Anybody can apply for encumbrance certificate except in case of Will. In case of Will, the legatee can apply after the demise of the testator with the death certificate and the document can be obtained only by the parties to the dead.
Documents pending registration but already presented in the Registrar’s office (due to deficient stamp duty paid and pending for decision ) will not be reflected in the Encumbrance certificate.

Thanks shanthi.....

it is a very useful info which u have given..........many of us might not know this......thanks for sharing

Shanthi,

here in US there are title search agencies that does this for the buyer for a fee. All these fees come under closing costs i.e title search fee, registration fee, attorney fee etc. Some times as an incentive the sellers provide this for free. Are there any such in India??

Based on what is said in the article the EC is not enough since pending ones are not reflected. There should be at least a reference in the EC that there are some pending issues with the property for it to be a complete document to base a purchase of the property.

Anitha,

I read a small bit in some magazines...the late shivaji ganesan wanted to buy some land...approached a real estate person..he showed some land, shivaji liked it and the day of registration, came to know the land was already owned by his wife...(I seriously could not believe...)

So, there are double documents, the people in the registrar offices are also party to certain crimes..this is what i heard...so wanted to share this article with all...

Originally Posted by Blondie

Shanthi,

here in US there are title search agencies that does this for the buyer for a fee. All these fees come under closing costs i.e title search fee, registration fee, attorney fee etc. Some times as an incentive the sellers provide this for free. Are there any such in India??

Based on what is said in the article the EC is not enough since pending ones are not reflected. There should be at least a reference in the EC that there are some pending issues with the property for it to be a complete document to base a purchase of the property.

Blondie,

there are real estate agencies which will give you all these in india also. but the procedure in the government offices is different. it is still part manual..so the pending issues, the mortgages ..say if it is under some nationalised bank will reflect sometimes..but what if it is with a private party it will never get reflected...

And before we used to say 14 years of back papers on the ownership is enough...now there are people who go beyond 20 years..(these are called chitta papers..)

There are lot of non-consistent procedures..

for example, the last registered government rate becomes the guideline of the place say A. If A had a last registered value at 400, you can either register at 400 or spike up at 500....so the next person will also have to register at 500...or vice versa...(This is to reduce on the registrations charges..)

Thats gud Shanthi....... on sharing.........now only i again came across the thread........a bit late no no no toooooooooo late

Hi Anitha,

Just sharing what I know, what I discuss, What I observe...hoping that people do take care..after all it is hard earned money...and properties are not cheaper...

Originally Posted by shanvy

Anitha,

I read a small bit in some magazines...the late shivaji ganesan wanted to buy some land...approached a real estate person..he showed some land, shivaji liked it and the day of registration, came to know the land was already owned by his wife...(I seriously could not believe...)

So, there are double documents, the people in the registrar offices are also party to certain crimes..this is what i heard...so wanted to share this article with all...

I wouldnt blame the registrar office employees. I agree that there are few scumbags in 'em.

The problem is Indian departments are not streamlined and not categorized like in america or other developed countries. Registrar office registers them and they dont have a database or any computer application to check if that plot Id is been owned/sold by someone else. They do their job: Register if all the documents are legal. The agents on the other hand are the culprits, the legal document(called thaai pathiram) is duplicated N number of times and thus capture N number of innocent victims(buyers)

Remember India is a developing country and thus it will take time to keep everything in order and with all the worldclass corruption in place, it might take a while. As the author of this thread suggested, there are few ways a seller can check before stepping in. Also hire a property lawyer, a smart one to do the check for you.

Nand

Hi,

Thanks for sharing

Originally Posted by shanvy

hi all,

There are lot of Il's who are buying, bought and planning to buy. and i have already talked about the points to be noted when planning to buy, even talked about taking EC (Encumberance Certificates...) so last saturday there was this article in THE HINDU detailing what the EC shows and what is not showed...and also why EC is important...thought of sharing it all with you....and if anybody has doubts after reading this let us discuss it in detail .....


Encumbrance is a legal term for anything that affects or limits the title of a property, such as mortgages, leases, easements, and liens. In regards to property transaction encumbrance certificate is a document issued by the Registrar’s office. The encumbrance certificate contains all the transactions registered relating to a particular property for a period (as required). It is advisable to get encumbrance certificate before effecting any transactions. This will als o help in arriving at proper entitlement of the property. The non-testamentary documents relating to immovable properties are registered under BOOK 1 and preserved permanently which only will reflect in the encumbrance certificate. The documents registered under BOOK 1 include the deeds of sale, gift, settlement, partition, release, mortgage, rectification, consent, exchange discharge, security cancellation, mortgage assignment and agreements of lease and sale. It also includes any documents for consideration or supplemental documents to the documents executed for consideration with the description of immovable property. Book No 2: records reasons for refusal to register the documents. Book No. 3: Register of Wills and authorities to adopt. Book No 4: Miscellaneous Register. Book No 5: Register of deposit of Wills.
Unregistered mortgages The encumbrance certificate issued by the Registrar’s office will not reveal some items which include unregistered mortgages, arrears in taxes to be paid to statutory authorities, status of tenancy, suits pending before the court acquisition proceedings. The Registrar is not liable to be sued, for any claim or demand for reason of anything done or not done in good faith in his official capacity.
The EC will not reveal documents that are executed but not registered within the time allowed by the Registration Act. The effect of registration is only to make the title absolute and unquestionable. A document may not be valid as long as it remains unregistered if no transaction has taken place during the period for which the application is made for EC.
Any order of attachment by the court will be communicated to the Registering officer within the local limits of whose jurisdiction the whole or any part of the immovable property is situated and the same will be reflected in the encumbrance certificate. Anybody can apply for encumbrance certificate except in case of Will. In case of Will, the legatee can apply after the demise of the testator with the death certificate and the document can be obtained only by the parties to the dead.
Documents pending registration but already presented in the Registrar’s office (due to deficient stamp duty paid and pending for decision ) will not be reflected in the Encumbrance certificate.

tanya,

thanks.