The transfer process is not complete with registration of documents; you need to apply for mutation too
Given the high value of real estate assets, it is very important for legal heirs to secure the asset after the death of the person in whose name it is registered. You need to go through legal formalities to obtain ownership of a property. Formalities may differ based on the nature of the property, your rights over it, the number of legal heirs and others. Here is how and what to do when you inherit a property.
In order to get inherited property transferred in your name, you must have substantial proof to claim your rights and inheritance. In the presence of a Will, the process is relatively simpler; executors are required to administer the property as per the Will. But legal heirs can challenge the Will if it is contrary to law. For instance, a person can only pass on the property as per her wish if the property was self-acquired and not inherited. If it was inherited, succession law comes into play.
Problems arise when there is no Will. In such cases, “the first plausible and most convenient situation that can arise is that the legal heirs mutually decide amongst themselves and distribute the shares accordingly. The said distribution can be reduced to writing in terms of a family settlement which can be subsequently registered and the shares be divided in such terms," said Manoj K. Singh, founding partner, Singh & Associates, a law firm. Typically, in the absence of a Will, appropriate succession laws come into effect. (Read: Why it’s essential to make a Will)
Once the beneficiaries and their shares, rights and liabilities are decided, the property has to be transferred in their names. For this you need to apply for property transfer at the sub-registrar’s office. Typically, you need the property ownership document and the Will, or the Will with probate or succession certificate.
In the absence of a Will, you may also need to prepare an affidavit along with a no-objection certificate from other legal heirs or their successors. If you have paid any consideration (in kind or cash) to any heirs or claimants to acquire their share, mention that in the transfer papers.
The process is not complete with the registration of documents in your name; the next task is to apply for mutation of the property title. It is done to record the transfer of a title of an immovable property from one person to another in land revenue records. This is required for the purpose of payment of property taxes, or to transfer or apply for utility connection in the name of the new owner. It also adds evidentiary value in respect of the title to the property. Mutation of property records takes place at the local competent municipal authority office in whose jurisdiction the inherited property is located. The documents required and the fees for mutation of a property differ from state to state.
Remember if there is an outstanding home loan against the property, then you inherit the loan as well and are required to pay the outstanding amount. However, if the deceased owner had a home loan insurance, the insurer pays off the outstanding. Once the payment is made, you must collect the loan clearance certificate from the lender and the original documents of the property that were given to the lender to avail the loan. Mortgaged property can be transferred only with the written consent of the lender.
Also, if the property you inherit has been let out, you become obliged to adhere to the lease agreement signed between the lessee (the predecessor) and the lessor. “If legal heirs are desirous of continuing the lease, then simply an agreement can be executed with the lessee wherein the lessee acknowledges that by operation of law the legal heirs of the deceased shall thereafter be treated as the new lessor," said Singh.
If needed, take legal help to get the property title transferred in your name.