Project & Payment
What is a No Dues Certificate?
The previous owner did not pay for six years. They have your money and a new address. And the bill is now yours.
The short answer
A no-dues certificate confirms that nothing is owed on the property.
Get one. From everyone.
Because arrears follow the PROPERTY, not the person who ran them up. The previous owner's unpaid maintenance, property tax and utility bills become your problem the moment you own the flat.
Who to get one from — all of them
| From | For | How to verify |
|---|---|---|
| The society / association | Maintenance charges, sinking fund, special levies | Ask the committee, not the seller |
| The municipal corporation | Property tax | Check five years of receipts on the municipal portal. Not the paper you were handed. |
| The electricity company | Unpaid bills | Old dues can follow the meter. Get a final bill. |
| The water board | Water charges | Same. |
| The seller's BANK | The home loan | Loan closure letter + NOC + release of the charge. Then check the EC. |
| The builder | Any outstanding instalments or charges | Where the project isn't conveyed |
Why it matters — and it is not a formality
The previous owner did not pay their property tax for six years. They have sold you the flat and moved to Dubai.
The arrears are now your problem.
The municipality does not care who ran up the debt. Their claim attaches to the property, and the property is yours.
The same is true of society maintenance — a society can and will refuse services, refuse an NOC, and pursue the flat.
And utility dues can follow the meter.
This is one of the commonest unpleasant surprises in Indian resale purchases, and it is entirely preventable with three pieces of paper.
Verify it. Do not just collect it.
Verify independently:
• Property tax: check on the municipal portal, by property ID. Five years. Free. Two minutes.
• Society dues: ask the secretary, or the managing committee. Not the seller.
• Electricity: get a final bill from the utility, in the seller's name, showing nil.
• The bank: get the loan closure letter and the NOC, and then check the encumbrance certificate to confirm the charge was actually released.
The last one catches people constantly. A bank tells the seller the loan is closed. The charge is never formally released. And it appears on your EC — and stops your purchase.
How to protect yourself
- Get all the no-dues certificates BEFORE registration. Not after. Afterwards, you have no leverage and the seller has your money.
- Verify each of them independently.
- Withhold part of the price until they are produced — this is normal, reasonable, and the single most effective protection there is.
- Put an indemnity in the sale deed — the seller indemnifies you against any dues relating to the period before the sale. It is not a complete answer (you still have to find them, and sue them) but it is worth having.
- Get a fresh encumbrance certificate after registration, and check the transfer appears and the old mortgage does not.
- APPLY FOR MUTATION. Until the record is in your name, the bills go on being addressed to someone else — and they go on accumulating.
Withhold 5% of the price until every no-dues certificate is in your hand.
State it in the agreement. Sellers accept it routinely, because it is reasonable — and because a seller who has nothing outstanding has nothing to fear from it.
A seller who objects strenuously to a retention pending no-dues certificates is telling you why.
Frequently asked questions
What is a no dues certificate?
A certificate from a society, authority or utility confirming that nothing is outstanding on the property as at a specified date. You need one from the society, the municipal corporation (property tax), the electricity company, the water board, and the seller's bank.
Do property arrears pass to the new owner?
In practice, yes — because the claim attaches to the PROPERTY, not to the person who ran up the debt. If the previous owner didn't pay their property tax for six years and has moved to Dubai, the arrears are now your problem. The same is true of society maintenance, and utility dues can follow the meter.
How do I verify a no dues certificate?
Independently. Check property tax on the municipal portal by property ID — five years, free, two minutes. Ask the society's secretary, not the seller. Get a final electricity bill from the utility. And for the bank, get the loan closure letter and NOC — then check the encumbrance certificate to confirm the charge was actually released, because a loan can be closed and the charge never formally removed.
How can I protect myself against unpaid dues?
Withhold 5% of the price until every no-dues certificate is in your hand, and state it in the agreement. Sellers accept it routinely, because it is reasonable — and a seller with nothing outstanding has nothing to fear from it. A seller who objects strenuously is telling you why.
Should I get a no dues certificate before or after registration?
Before, always. Afterwards you have no leverage and the seller has your money. Also put an indemnity in the sale deed covering dues for the period before the sale — it is not a complete answer, since you still have to find them and sue them, but it is worth having.