Should you buy a resale flat without mutation?

Vasant Kumar had zeroed in on a 2BHK resale property in Pune. While he has given the token money, he is now confused because the mutation of the property was not done by the seller from the previous owner. Is it safe to buy a resale property without mutation? Also, he wonders if he can directly get mutation on his name, if he goes ahead with the property purchase. According to legal experts, while it is not illegal to buy a resale property without mutation, this document helps establish a chain of owners and thus helps in legal disputes. However, he cannot break the chain and get mutation done on his name directly. The seller has to get mutation done from the previous owner and then only Vasant can get it done on his name.

From this above cited example, one knows that a common case of miss while buying a resale property is not getting mutation done. While this is done by the developer in case of new property, homebuyers of resale property are many times ignorant about its necessity and hence skip this step.  A resale property when bought without mutation means that the home buyer should be ready for some administrative and legal challenges going forward. In this guide, we talk about the importance of mutation, what happens if mutation is absent and how can homebuyers get mutation done for their property?

See also: Property registration in India: Rules, documents, charges

What is mutation of property?

The process of changing the title of a property in the local municipal records is known as mutation. It is also known as Dakhil-Kharij.

Importance of mutation of property

Mentioned are reasons why mutation of property is important.

Government Records and Taxation: This is important as it acts as proof of ownership to the new buyer. Also, this helps in calculating the correct property tax that has to be paid by the new owner.

Correcting errors: You can update the mutation certificate and correct any error in land records. With this one can safeguard their property from unauthorised encroachment.

Legal proof of property for future transactions: A mutation certificate is a proof of ownership of property and helps as proof for all property related transactions in future. It also acts as proof in case of legal disputes.

What happens if mutation of property is not done?

Mutation is legal proof when property is transferred from seller to the buyer- the new owner. In the absence of mutation of property, getting right owner details is challenging as the data is not updated in the government records. This can lead to issues such as payments related to property tax and also capital gain tax liabilities that are listed under the previous owner’s name. This is also an important document for any future sale which you will not be having.

See also: Buying new home vs resale property in India: A Comprehensive Guide

Problems faced if mutation of property not done

• Issue in paying  property tax

It is mandatory to pay the property tax annually. The property tax is linked with the owner’s name. In case of mutation of property is not done, the property tax bill will be sent to previous owner- who may not pay the same.  There will be defaults on the property tax that may result in the local body levying penalty or taking legal action.

• Problem in selling property

Since mutation certificate will not have owner’s name, there will be some confusion on who the owner is thereby creating issues while selling the property.

• Difficulty in getting home loan or mortgage property

Since the property is not recognised by the legal records, it is difficult to get home loan or mortgage your property in the absence of mutation certificate for resale property.

• Limited municipal services accessibility

Since the municipal record won’t match with the name of the owner, there may be chances that in the absence of mutation certificate, access to utilities such as electricity, water etc. may be limited.

• Partition problems

In case of no mutation, there will be confusion that may lead to problems related to inheritance and partition of property.

Should you buy a resale flat without mutation?

If a property mutation is done, it means that the property is officially registered under the new owner’s name in the local municipal body records. This helps in dealing with any legal problems in the future. Note that while mutation is important, it is not legally enforced. While many people like to keep all documents correct, there are some who are ok with buying a resale property without mutation. If a property is purchased without mutation, there are chances that the homebuyer faces legal problems going forward.

See also: What is an encumbrance certificate?

Difference between sale deed and mutation

These two document terms are often mistaken, but there is a huge difference between the two.

Sale deed: This legal document is executed when the ownership of the property is transferred from the seller to the buyer. This includes details such as seller and buyer details, cost of the property, area of the property and other important information.

Mutation: Property mutation means updating ownership details of the property in the local municipal records. While this does not transfer ownership of property, it is important for updating government records so that the rights of the new property owner are recognised.

What does the mutation certificate include?

Details mentioned in mutation certificate include:

• Name of the current owner: This is where the name of the new owner comes once he buys the resale property.
• Area of land
• District: The administrative area under which the property is located.
• Police station: Jurisdiction under which the property is present.
• Mouza Number: Village or locality number where the property is located.
• Khatian/Khasra Number: Landholding number as per legal records.
• Plot Number: Denotes the specific plot being referenced.

Once these data are entered, a sub-registrar verifies that the information is right and the document will have his seal and signature.

How to get a property mutation certificate?

•  You can apply for a mutation certificate online and offline. However, after filling forms online, one has to visit the municipal local body office for
•  You can apply for a property mutation certificate by visiting the local municipal body where the property is located.
• Collect the mutation application form and fill all details.
• Attach required documents such as sale deed, identify proof, address proof. Attach any other document asked by the SRO and submit the application form.
• Pay the fees for getting the mutation certificate.

What are the fees to pay for getting a mutation certificate?

The fee to get a mutation certificate varies between Rs 25 and Rs 100, depending on the local municipal body.

How long does it take to get a mutation certificate?

It takes 15 to 30 days for the local municipal body to update the property record and issue the mutation certificate. It is recommended that you account this time when you purchase resale property so that you buy one with a mutation certificate. In case the mutation certificate is rejected, the property owner has to apply again within 30 days of getting the rejected notice.

What are the documents that you should check before you buy a resale property?

• No Objection Certificate (NOC) from bank
• Building approval certificate ( check the property is legally approved
• Completion certificate/occupancy certificate
• Title deed
• Encumbrance certificate
• Mutation
• Property tax receipts (check no dues pending)
• Utility bills- electricity bills, gas pipelines bills and water bills ( check no dues pending)
• Possession certificate
• Society share certificate
• No Objection Certificate (NOC) from the housing society ( check no dues pending with respect to society maintenance charges, penalty to society or any other charges for which a valid bill has been sent.)

Steps to follow while buying a resale property

Mentioned are steps that one should follow while buying a resale property.

1) Research: Any home buying should be done after doing a good amount of research on if the property fits the bill when it comes to the buyer’s priorities. A homebuyer should check a number of resale apartments and make decisions by considering location, budget, configuration, facilities etc. before finally choosing one so that they are well aware about the benefits of the investment.

2) Due diligence: This is a step that has to be done with extreme caution. Avail professional legal help and check each and every document of the property to know if the property is having clear title, there are no disputes associated with the property etc.

3) Negotiate: Based on the market value and the condition of the property, one should negotiate the value of the resale property to get a good deal.

4) Preparing finances: Once the resale property has been chosen, one should proceed with paying the token money. Next, one should plan as to how the payments will be done-what will be the down payment and if you will use your savings or use a personal loan for making the down payment. You should also check your finances, plan and understand your home loan eligibility and the tenure by which you will repay the home loan so that your financial planning is stable.

5) Mutation of property: Once the payment is done and the sale deed is executed, the ownership of the property is transferred to the new owner. One should also ensure that mutation of property is done as this will safeguard the rights of an owner in future in case of a legal battle.

Housing.com POV

While a mutation certificate of a resale property is not mandatory, one should ideally get it because of the many advantages it has. This certificate legally empowers the owner in case of any dispute as any changes made to the property may be recorded in the mutation document. This document can easily be applied for and got from the local municipal body. The fees to be paid for mutation certificate is also not steep. Thus, it is always recommended to check and get the mutation certificate.

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