Encumbrances and dues: what you might inherit
last updated 2026-07-21
An encumbrance is any charge or claim on a property — a mortgage, unpaid tax, utility arrears or society dues. In an as-is-where-is sale the bank lists only what it knows, and some of these dues can pass to you as the buyer, so checking them independently is essential before bidding.
What counts as an encumbrance
- Existing mortgages or charges beyond the bank's own.
- Unpaid property tax to the local body.
- Electricity and water arrears.
- Housing-society or maintenance dues on a flat.
- Attachments, liens or pending claims on the property.
Who pays them?
The sale notice usually lists known encumbrances "to the best of the bank's knowledge" and often states that outstanding statutory dues, utility arrears and society dues are to be borne by the buyer. That means a low reserve can hide a real cost: you could clear the auction and then face arrears that reduce or erase the saving. Read this section of the notice closely, and never assume the listed dues are the whole story.
How to check
Pull the encumbrance certificate (EC) for the property from TNREGINET to see registered charges, and ask the local body, the utilities and — for a flat — the society about outstanding amounts. Where the sale notice is vague, ask the bank's authorised officer directly. Building this into your pre-bid routine turns "as-is-where-is" from a risk into a known quantity, which is the mindset AuctionScope is built to support.
Frequently asked questions
Do I inherit unpaid dues on a bank auction property?
Often yes. Sale notices commonly place outstanding property tax, utility arrears and society dues on the buyer. Check the notice and verify the amounts independently before you bid.
What is an encumbrance certificate?
An EC, available from TNREGINET in Tamil Nadu, lists the registered charges and transactions on a property over a period. It is a core check for spotting existing mortgages or claims.
Does the bank guarantee there are no encumbrances?
No. It lists what it knows, to the best of its knowledge, and the sale is as-is-where-is. You should verify encumbrances and dues yourself rather than rely on that line.