Encumbrance certificate and CERSAI search: checking a flat isn't already mortgaged

Rules and rates as of 15 October 2026.

The seller of a resale flat may owe a bank money on that same flat. A seller with an old home loan, a business loan secured on the flat, or a top-up taken years ago may not mention it. If the charge is still live when you register your sale deed, the lender can pursue the property even though you now own it.

There are two public places to look before you pay: the encumbrance certificate (EC) from the state registration department, and the central registry run by CERSAI. They capture different things, so a careful buyer checks both. This explainer covers what each shows, where each has blind spots, and how to settle an existing loan at the time of sale.

The encumbrance certificate: what the sub-registrar knows

When a document about land or a flat is registered, it is entered in the sub-registrar's books. Section 51 of the Registration Act, 1908 calls Book 1 the "Register of non-testamentary documents relating to immovable property". Section 17(1)(b) makes registration compulsory for non-testamentary documents that create, assign, limit or extinguish rights in immovable property.

Section 57 is what lets a stranger check. Books 1 and 2 are "at all times open to inspection by any person applying to inspect the same", on payment of fees. An EC is simply a certified extract of that search for a property and a period you choose. It lists the registered sale deeds, gift and settlement deeds, registered mortgage deeds, and releases or receipts that cancel a mortgage.

Most states now offer the EC online. Telangana's citizens' charter, for example, promises an EC from computerised records within one hour and from manual records within 24 hours. Maharashtra's registration department offers a free e-search of Index II for documents registered since 1985 and a paid e-search that includes copies of the documents. Other states run similar portals. Fees differ by state and by how many years you search, and the portal shows the fee before you pay.

The EC's blind spot

Not every mortgage is created by registering a deed. The Registration Act itself recognises a "mortgage by deposit of title-deeds": section 48 says such a mortgage takes effect against any mortgage deed executed and registered later on the same property. Banks often create home-loan mortgages this way, by keeping the original documents. A charge like this may never enter Book 1, so a clean EC does not prove the flat is free of loans.

CERSAI: what lenders must record centrally

CERSAI is the Central Registry of Securitisation Asset Reconstruction and Security Interest of India, set up under the SARFAESI Act, 2002. Banks and other secured creditors file particulars of the security they take on a property there. A mortgage created by handing over title deeds does not reach Book 1, but it can still appear on CERSAI. The 2016 amendment (Act 44 of 2016) strengthened this in three ways:

• Public notice. Under the new section 26C(1), registration with the Central Registry is "deemed to constitute a public notice from the date and time of filing". A buyer cannot easily claim ignorance of a charge that sits on CERSAI.
• No registration, no SARFAESI. Section 26D says no secured creditor can use the Act's enforcement powers, under Chapter III, the route banks use to take over a defaulter's property, unless its security interest is registered with the Central Registry. That gives lenders a strong reason to file.
• Priority. Section 26E says that once registered, debts due to a secured creditor are paid ahead of all other debts and all revenues payable to the government or local authorities, subject to the Insolvency and Bankruptcy Code.

Maharashtra's registration department lists a CERSAI search alongside property-tax dues and Registrar of Companies charges as encumbrance checks a buyer can run. CERSAI's portal offers a paid public search. Our tools could not open its pages, so we have not quoted its search options or fee. Check both on the portal before you search.

EC vs CERSAI at a glance

Point	Encumbrance certificate	CERSAI search
Who keeps the record	State registration department (sub-registrar)	Central Registry under the SARFAESI Act
Legal basis	Registration Act, 1908: ss. 51, 57	SARFAESI Act, 2002: ss. 26C to 26E
What appears	Registered documents: sales, gifts, registered mortgages, releases	Security interests filed by banks and other creditors
Main gap	Unregistered mortgages by deposit of title deeds; loans from lenders that file only centrally	Private loans and agreements that were never filed; older history of ownership
Period covered	Any period you choose	What creditors have filed and not yet satisfied
Speed	Telangana: 1 hour (computer records), 24 hours (manual)	Online portal

Neither search shows unregistered sale agreements, family claims, or court cases. Those need a title opinion from a lawyer and a check of court records.

Worked example: buying a flat that still has a loan on it

A charge on the property does not stop the sale. It means the loan must be cleared as part of the sale. Take an illustrative case. The seller took a ₹40 lakh home loan at 9% a year for 20 years and has paid 84 EMIs. You are paying ₹90 lakh for the flat. (The rate and figures are assumptions for illustration.)

EMI = P × r × (1 + r)ⁿ ÷ ((1 + r)ⁿ − 1), with P = ₹40,00,000, r = 9% ÷ 12 = 0.0075 a month, n = 240 months. That gives an EMI of ₹35,989.

Balance after k EMIs = P × (1 + r)^k − EMI × ((1 + r)^k − 1) ÷ r. With k = 84, the balance is about ₹33,02,715.

So out of your ₹90 lakh, about ₹33.03 lakh goes straight to the seller's bank against its foreclosure letter, and about ₹56,97,285 goes to the seller. The bank's own letter gives the exact payoff figure on a given date, including interest up to that day. You then need three things in writing: the bank's no-dues letter, the original title documents returned, and the charge closed on CERSAI. If the mortgage was registered, a registered release deed should also appear on a fresh EC.

Order of checks before you pay a token

1. Get the EC for as long a period as your lawyer or lender asks, and match every entry to the seller's chain of documents.
2. Run a CERSAI search on the property and on the seller's name.
3. Ask the seller for a loan statement or a no-dues letter even if both searches are clean.
4. If a loan exists, write in the sale agreement that part of the price is paid directly to the bank.
5. After registration, run both searches again to confirm the charge has gone.

This explains public records, not your specific title. A property lawyer's title report is still the main safeguard.