Property buyers! EC too can deceive you!

K Ramanathan

CHENNAI: Property buyers beware! Your most authentic document for judging the ownership and also to find the liability factor of a property you want to buy, may deceive you. Confused?

If the recent submission made by the state’s registration authority before the honourable High Court in Chennai is to be believed, the Encumbrance Certificate (EC), which has been considered as the most reliable document by property buyers, will now have to search for some other means to authenticate the genuineness of a property they are buying.

To escape from land grabbing bids by using all available illegal means, realty buyers and investors in the state solely believe on EC while making purchases. But their hope was shattered recently when the state registration department told the Madras High Court that ‘It is difficult to issue encumbrance certificates without any fault.’

An EC is the most basic document, which tells about the current status of an immovable property. It contains the details of ownership and whether the property has been mortgaged or encumbered in favour of a bank or any individual.

Responding to an anticipatory bail petition of a landowner who purchased another person's property, as the EC did not reflect the latest ownership details, the inspector-general of registration told the court that, "The ECs are prepared by making search based on survey numbers, boundaries, extent, period, etc. It is because of mismatch in present survey number and old survey number and boundaries, encumbrance certificates, at times, do not reflect all the details relating to a property."

Piqued by the submission, Justice S Nagamuthu, told the registration authority that he could not agree with the argument that ECs could be faulty. Observing that there has been a rise in the number of cases related to improper ECs issued by the registration authority, the judge said, "Due to advancement in technology, it could be possible to evolve an error-free mechanism by which ECs could be issued flawlessly, reflecting all liabilities.”

The State registration dept told the court that though issuing an accurate EC was difficult with the present set up, it would soon come up with a better system.

However, one should understand a fact that unless the mortgaged or encumbered documents are registered properly, the chances of getting it reflected on EC is remote,’ said Rathnagiri, a property consultant in Thiruvanmiyur, who further added that property buyers should get an ownership and ‘no-due’ affidavit from the seller/s before registering a property. This will save them from future embarrassments.

EC can be applied for 25 to 50 years, depending upon the availability of information pertaining to a piece of land with the concerned registration authority. In some cases, the EC would be required for a tiny piece of land, segmented by land developers from a huge parcel of land, owned by a single entity. In such cases, the EC should take care of the survey number/s of the requisite property along with the surrounding ones and present and previous owner of the immovable property.