Legal advice

Question

► I am planning to purchase a small residential property (around 3.7 cents of converted land) in Kundapura, Karnataka. The property has a house, and the seller claims all documents are clear. However, the seller says the conversion is in his name and he has a registered sale deed, but the RTC (Pahani) still shows the previous owner. He says this is normal and takes time, and suggested I check with lawyers or banks. I need clarity on: Is it safe to buy when RTC is not updated to the seller’s name? How important is mutation and RTC update before purchase? Will banks approve loans in such cases? What risks are involved if I proceed? Should I insist on mutation completion before registration? I want to avoid future legal or financial issues.

Answer 1

Dear Sir,

From a legal standpoint, you can still purchase the property based on a valid registered sale deed, provided the title chain is otherwise clear and continuous. However, the absence of mutation increases your risk. There could be underlying issues such as pending disputes, unrecorded claims, or procedural lapses. If you proceed without resolving this, you may face difficulties later in getting the RTC transferred to your name, and in worst cases, disputes from third parties cannot be ruled out.

Banks are generally cautious in such matters. Most banks insist on updated revenue records (RTC in the seller’s name) along with a clear title before sanctioning a loan. If the RTC is not updated, the bank may either reject the loan application or insist that mutation be completed first. Some cooperative or smaller banks may take a flexible view, but nationalised banks usually require strict compliance.

Legal advice

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