What is mutation of property and why is it important?

[ecis2016.org] Among the many legal procedures that buyers have to follow, to attain complete ownership of the immovable asset, is mutation. In this article, we explain what mutation is, how it is carried out and why completing the process is important

Mutation of property is a key step in the property purchase process. This guide will explain the concept of property mutation and how a new buyer can complete this process.

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What is mutation?

Property mutation is the process through which the title entry is changed in local records once it has been transferred in the name of a new owner.

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When is property mutation done?

Any time a property changes hands, a mutation process must follow. For instance, after a property is registered under the name of a new buyer, they must initiate the property mutation process. The need for property mutation also arises in case of the death of the original owner and the property title being transferred in the name of another owner due to inheritance or succession. Now, the process that is followed to get the new owner’s name registered in the records of the local body is known as property or land mutation.

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What is mutation of land?

Once a buyer completes the land-buying process, the responsibility to get the new information registered in the revenue records arises. Land and property mutation helps the local authority to fix property tax liability and charge it accordingly. In different states, the process has different nomenclature. In Uttar Pradesh and Bihar, for example, the process is known as Dakhil-Khariz (entry-omission).

When does the need for property mutation arise?

The need for initiating the property mutation arises:
When you buy a property.
When you inherit a property.
When you receive a property through a gift or a will.
When you purchase a property through a power of attorney.

Who has to get property mutation done?

Those who buy land or apartments or inherit the same through a will or gift deed, have to get property mutation done.

Land mutation

It must be noted that in case of a land buyer, property mutation is compulsory, because without getting this done, the transfer of ownership will not be complete. It must be stated here that while land mutation is not legally binding on the land buyer, they must get it done within 3-6 moths of the land purchase so that the government records are updated and there are no confusions with regard to the change of land ownership.

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Apartment mutation

For buyers of flats and apartments, the transfer of ownership takes place as soon as the property’s registration is done; mutation is more of a legal formality, which can be completed any time after the transaction. However, one would have to show the mutation documents, if one were to sell the property in future. These documents may also be required, while applying for utilities such as power and water services.

What is mutation of property and why is it important?

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Difference between mutation and property registration

Even though they might seem like similar processes, property mutation and property registration are very different things.

While property registration is the process through which a property gets transferred in the name of the buyer after the payment of stamp duty and registration charges, property mutation is the process that takes place after this formality, typically after a year or so.

While a property is registered by way of executing the sale deed, after the buyer and the seller reach a consensus, property mutation takes places after the actual transaction. The property mutation process is basically a buyer’s responsibility, wherein the buyer gets his newly-owned asset updated in his name in the local revenue office.

How to apply for mutation of land/property?

Municipal bodies that govern your area maintain land records and that is where you have to get the mutation of your land or property done. While you could go online and start the mutation process, since several states have launched services on that front, you would ultimately have to appear in person at the municipal office, to complete the task.

In Bihar, land owners can get the land mutation done online. States such as West Bengal have launched plans to make the process completely online but the process has not yet been completed.

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Does property mutation happen before or after property registration?

Property mutation takes place several months after the property is registered.

What documents are required for mutation of property?

While documents required to complete the mutation process might vary from state to state, a buyer would have to submit the following:

*Correctly filled property mutation application form

*Copy of the sale/title deed

*Affidavit on stamp papers

*Indemnity bond

*Copy of Aadhaar Card

*Property tax receipts

*Copy of will or succession certificate or death certificate of the owner (if applicable)

What is property mutation fee?

While some states charge a nominal fee for property and land mutation, others levy property mutation rate as a certain percentage of the property value. In states that charge a nominal fee for property mutation, the rate may vary between Rs 25 and Rs 100. In states where charges a higher, at least 1% of the property cost could be charged as property mutation charge. Also note that property mutation charge is a one-time duty.

How is property mutation done?

The buyer must appear in the municipal office, along with all the documents. Following the submission, the department would conduct a physical verification of the property and then, issue the property mutation certificate. In some states such as Bihar, the land mutation process can be completed online.

Dakhil Kharij online check

As a lot of states now allow you to complete property mutation online, you can simply visit the official portal concerned, to go ahead with the process. You could also check the previous mutation or ‘dakhil kharij’ records online, by visiting the official portal and providing the details of the property and the owner.

How much time does it take to complete property mutation?

Once you submit your application, along with the required documents, it might take the municipal body 15 to 30 days to update the record, after which it would issue a property mutation certificate to you. In case of land mutation, it will take at least a month for the records to show change in land ownership.

Is there a time limit for the buyer to complete property mutation?

While buyers of land must immediately complete the mutation process, buyers of flats and apartments can get it done according to their convenience. However, the job must be done as early as possible, to keep your property documents in order.

What if property mutation is not completed?

Since the penalty is not very high (states typically charge Rs 25 to Rs 100 as the penalty for delays) and one is free to get the property mutation done as and when they find it convenient to do so, buyers often continue to postpone the process. However, it is advised that the property mutation process be completed as soon as all the other tasks pertaining to the purchase are complete. You would need the proof of the mutation, when you plan to sell the property in future. Even otherwise, it is legally much safer if a property mutation is done immediately after the purchase, from the point of view of transfer of ownership.

Can you claim title of a property based on the fact that it has been mutated in your name?

Owners must recall here that mutation entries can only be used as proof of possession over a property and not ownership. The Supreme Court of India has passed several judgements stating that.

Supreme Court (SC) view of mutation as property ownership proof

Mutation does not confer right over property, SC reiterates

If there is any dispute with respect to the title, civil courts will have the right to decide, the apex court ruled.

The Supreme Court (SC) has once again said that property mutation in no way confers property rights. Giving its verdict in a case, the apex court reiterated that mutation of property in revenue records is only for property tax fixing purposes and the mutation process does not confer right or title in favour of a person.

The SC order came on a special leave petition filed by a person from Rewa, Madhya Pradesh.

“Mutation entry does not confer any right, title or interest in favour of the person and the mutation entry in the revenue record is only for the fiscal purpose. As per the settled proposition of law, if there is any dispute with respect to the title and more particularly when the mutation entry is sought to be made on the basis of the will, the party claiming the right will have to approach the appropriate civil court and get his rights crystalised. The mutation will then be done based on the decision of the court,” the SC ruled.

The top court cited its previous orders in this respect, as well.

“In the case of Balwant Singh versus Daulat Singh (D) By Lrs., reported in (1997) 7 SCC 137, this court had an occasion to consider the effect of mutation and it is observed and held that mutation of property in revenue records neither creates nor extinguishes title to the property nor has it any presumptive value on title. Such entries are relevant only for the purpose of collecting land revenue. Similar view has been expressed in the series of decisions thereafter,” the SC bench added.

Earlier, the top court has also ruled, in a declaratory suit, that the owner would have to establish his ownership over the property independently, while rejecting a special leave petition filed by the Bruhat Bengaluru Mahanagara Palike, in January 2021.

While passing its judgment in the Bhimabai Mahadeo Kambekar versus Arthur Import and Export Company in 2019, the apex court had established the same point, saying that mutation entries of revenue records did not create or extinguish title over the land, adding that such entries did not have any presumptive value on the title of such land.

Can you file an appeal in case your application for mutation has been rejected?

An aggrieved party can file an appeal before the additional collector or the deputy commissioner, within 30 days of the order of rejection.

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