• Can I proceed for mutation if developer has not paid the pending property tax after assessment?

I am living in a Society (46 flats), where the developers have left without giving proper handover. When I am checking e-mutation online, I can see that there is a property tax pending (more than 14 lakhs). The online platform is not allowing me to apply for Mutation. 

Questions:

1. Can I apply for Mutation by paying my share of tax/money? 
2. Should the property tax be cleared by the flat owners first before any individual flat owners go for mutation?
3. Ideally who should pay this pending tax? Developers or Flat owners? 
4. Developers have forfeited many other deposits, so we can assume that he will not pay anything at all. In that, what is the best possible way the flat owners should take?
5. Can I sell my flat even if the mutation is not done?
Asked 2 years ago in Property Law
Religion: Hindu

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7 Answers

All dies by builder has to be paid before mutation would be allowed 

 

2) property tax dies of individual flats should be cleared 

 

3) after OC is issued flat owners have to pay property taxes 

 

4) you cannot sell your flat if mutation not done 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

all flat owners can jointly pay property tax arrears and then sue builder to recover the dues by filing case against builder before consumer forum 

Ajay Sethi
Advocate, Mumbai
99775 Answers
8145 Consultations

Yes you can proceed and get the mutation dome 

Prashant Nayak
Advocate, Mumbai
34514 Answers
249 Consultations

1. The mutation of property tax also means that the new property owner will pay the requisite property tax from thereon.

- Hence , if the builder has not paid the property tax , then the flat owners are under obligation to pay the same for entering their names in the Dakhil Kharij. 

- Further, if the said property already registered in your name  ,then you can apply for mutation 

2. Yes, it is one of the requirement of mutation.

3. Flat owners from the date of registration of the sale deed and handing over the possession . 

4. The flat owners can file a complaint before the Consumer forum against the builder , and also can lodge FIR against him for the offence of cheating and breach of trust. 

5. If the property is already registered in your name , then you can sell the flat even without the mutation . 

- As per Supreme Court,  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.

Mohammed Shahzad
Advocate, Delhi
15814 Answers
242 Consultations

1.  You may not be permitted to pay your tax alone if the taxes due to the whole project is pending

2. The due taxes are to be paid to the government before the mutation application is submitted.

3. All the taxes pertaining to the proeprty are to be paid by the developer before transferring the flat to the buyers.

4. You can form an association and  decide on further course of action in this regard in a general/special meeting of the association.

5. If the buyer is willing to get the mutation done by himself at a later stage then you can proceed.

T Kalaiselvan
Advocate, Vellore
89976 Answers
2492 Consultations

The flat owners can decide about paying the taxes collectively in a meeting after arriving at a resolution and also can resolve to recover the taxes paid from the builder since it becomes the duty of the developer to pay the taxes to government before handing over possession of flats to the buyers. 

T Kalaiselvan
Advocate, Vellore
89976 Answers
2492 Consultations

Dear client,

In India, property mutation typically involves transferring the title of a property from one person to another in the records of the municipal corporation or local authority. However, the process can vary based on the specific laws and regulations of the state or municipality where the property is located. Regarding your situation, the pending property tax might be a hurdle in the mutation process. It's essential to clear any outstanding dues before applying for mutation. While you may be willing to pay your share of the tax, it's crucial to ensure that the entire outstanding amount for the property is settled to facilitate the mutation process.

Here are steps you might consider:

1. Contact the Municipal Corporation: Reach out to the municipal corporation or local authority responsible for property tax collection. Inquire about the pending tax and seek clarification on the exact amount owed and the process to clear it.

2. Conduct a Comprehensive Check: Ensure that the pending amount is for the entire property and not limited to specific units. This is crucial as sometimes dues might be specific to certain units or common areas.

3. Resolve Dues: If possible, work with other residents or the association to collectively resolve the pending property tax. If the amount is considerable and beyond your means alone, collaborative efforts might be necessary.

4. Association or Resident Efforts: Consider collective action with other residents. Forming an association or a group to address this issue collectively might help in pressuring the authorities or seeking legal recourse, if necessary.

Ideally, the responsibility for paying pending property taxes often falls on the property owner, which, in this case, would typically be the flat owners. However, the specifics can sometimes be outlined in the initial agreements or contracts between the developers and the flat buyers. If there's a clause or agreement that places this responsibility on the developers until the handover or specific milestones, that might change the scenario.

Given that the developers have forfeited deposits and seem unwilling to address the pending tax, the burden might fall on the flat owners collectively. As mentioned earlier, forming an association or a group with other flat owners can be beneficial. Collective action often holds more weight when dealing with authorities or legal matters. Consult with a property lawyer to understand the legal options available. If the developers have defaulted on their obligations as per the agreement, legal action might be pursued against them. Additionally, legal guidance can be crucial in finding ways to resolve the pending tax issue collectively. Approach the municipal authorities to discuss possible options for settling the pending taxes. Sometimes, there might be provisions for settlements or payment plans that can be explored.

Regarding selling your flat without mutation being completed, it's important to note that mutation of the property is a crucial step in the transfer of ownership. While you might find a buyer willing to purchase the property without mutation, it's generally advisable to complete mutation to ensure a transparent and legal transfer of ownership. Buyers often prefer properties with proper documentation and legal clearance, including mutation. However, in exceptional cases, if the buyer is willing to proceed without mutation, it's advisable to disclose the pending mutation and tax issues transparently. Yet, this might significantly limit the pool of potential buyers and could potentially affect the selling price. You can reach out to us for further assistance

 

Anik Miu
Advocate, Bangalore
11014 Answers
125 Consultations

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