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 are 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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