What happens if the encumbrance certificate reveals a pending claim or legal dispute?

If an encumbrance certificate (EC) reveals a pending claim or legal dispute on a property, it signifies that there are unresolved issues or disputes associated with the property. Here's what typically happens in such cases:

1. Further investigation: The discovery of a pending claim or legal dispute through the EC prompts the need for further investigation. You may need to delve deeper into the nature of the claim or dispute to understand its implications and potential impact on the property.

2. Consultation with legal experts: It is advisable to seek legal counsel or consult with a property lawyer to understand the legal aspects of the claim or dispute. They can provide guidance on the best course of action based on the specific circumstances.

3. Resolution attempts: Depending on the nature and severity of the claim or dispute, various attempts may be made to resolve the issue. This could involve negotiation, mediation, or legal proceedings, depending on the parties involved and the complexity of the matter.

4. Decisionmaking: Based on the advice of legal experts and the assessment of the claim or dispute, you will need to make an informed decision on whether to proceed with the property transaction or consider alternative options. This decision may involve weighing the risks, potential outcomes, and legal implications.

5. Title clearance: If the claim or dispute is successfully resolved, it may be necessary to obtain a clear title certificate or clearance from the appropriate authority to ensure that the property's ownership is free from encumbrances.

It is important to note that each case may have unique circumstances and complexities. Consulting with legal professionals is crucial to understand the specific legal implications and to determine the best course of action. Resolving any pending claims or disputes is essential to ensure a clear and unencumbered title to the property and to mitigate potential risks in the future.