What does Encumbrance Certificate mean?

All transactions that are in the nature of conveyance or transfer of immovable property of the value of Rs. 100/- or more have to be effected by a duly stamped and registered document. The entries relating to these transactions are recorded in a book known as Book I in the office of the Registrar of Assurances concerned. The Encumbrance Certificate is an extract of this book for the period requested. It is issued in the name of the person who makes the application. It may be noted that merely issuance of this application in the name of the applicant does not signify any ownership of the property by itself.
What is value of Encumbrance Certificate?
A buyer who is purchasing the property has to take all reasonable care and caution in purchasing the same. As the Encumbrance Certificate reveals all registered transactions relating to the property concerned, this is a mandatory step to understand as to whether there is any previous transaction that will affect the instant purchase. Further, the rights of a Purchaser will be subject to the rights of parties under such documents. Furthermore, this is an important step for a person to make a purchase in good faith.