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Limit for society flat transfer charges is Rs. 25,000/- Date: Apr 21 2012

Advocate SR Agarwal answers queries from DNA readers on property matters and society issues

Ours is a registered housing society. At the time of selling the flats by the promoter/ builders an undertaking was given to the banks/ financial institutions, (where the buyers had availed of the loan for the purchase of the flats) that the share certificates would be submitted to such institutions, as and when the society is formed. Now society has been formed and the share certificates are ready and the society is in the process of completion of the formalities for the issuance of the share certificates. Please let me know whether share certificates could be directly given to the individual members or office bearers are bound to forward the same to these financial institutions. If the share certificates are given to the members of the society would it amount to any contravention by the office bearers and would they be held accountable. Clause No.9 of the model bye law states that share certificate shall be issued by the society to every member for the share capital subscribed by him/her. Can the office bearers of the society release the same to the financial institution/bank instead of issuing the same to the members of the society? Incidentally none of the financial institutions have demanded the same as of now.

–KR Ramachandran

You have rightly mentioned that Clause No.9 of the model bye laws provide that the share certificate shall be issued in the name of the member, who have subscribed to the share capital of the society. As far as the delivery of the share certificate is concerned, if an undertaking has been given by the builder in the cases, where the members have availed of the housing loans from the financial institutions including banks, to send the same by the society directly to such financial institutions, that undertaking should normally be honoured and the share certificates should be sent by the society to those financial institutions under intimation to the members concerned. The same procedure may also be followed where registered society is already in existence but it has not issued share certificates, (like so many societies in Mumbai/ Navi Mumbai) and where the members have obtained housing loans from the financial institutions and the banks, and an undertaking is obtained from the society either separately or by way of a clause in the mortgage NOC that the share certificates, as and when issued or transferred, will be sent to the concerned financial institutions. However, if there is any lapse in honouring any such undertaking, it may be difficult to attach any liability against the office bearers of the society. But where the members have availed of the loans from the financial institution and submitted share certificates with other documents as security for loans and later on share certificates are sent by the financial institutions to the society for the purposes of transfer endorsement, the share certificates should be returned back to the financial institutions concerned, failing which office bearers may be held responsible. It may also be noted that the lien/charge of such financial institutions should also be recorded by the society in the lien register maintained by the society.

According to bye-law No.14 (c) of 2009, it is now possible to utilise the sinking fund of a society towards major repairs after the same is certified by an architect and approved by the general body by way of a resolution. However when the banks were approached after meeting these requirements, they refused to entertain the application on the ground that they have received orders that all applicants must get first approval of the concerned Dy. Registrar before they can release the funds. If this is the requirement, then the situation is not different as against prior to the amendment of bye-law 14 (c).

–Jude Chaves

A society is governed and has to function according to bye-laws adopted by it and approved by the Dy. Registrar. If the society has adopted 2009 model bye-laws with the approval of Dy. Registrar, the bank cannot refuse on the submission of the requirements of bye-law No. 14 (c) of 2009. In case the society has not approved 2009 bye-laws, it will be governed by the earlier bye-law No.14 (c) as approval of Dy. Registrar will be necessary. You should have called for the copy of the orders being referred to by the bank for refusing the funds to examine the matter further.

Ours is a four-storey building and we are in the process of forming the society. I purchased a shop in this building from the builders and the number of the shop was given as 6. But, subsequently, I came to know that in all other documents such as electricity bill, share certificate, CIDCO Deed etc. this shop has been numbered as 5. Builder has told that he has combined shop No.1 and 2 and thus it has happened. All the shops are having the same problem. What can be done?

–Shailendra Maurya

A builder cannot change the numbering of the shops and the flats from what is given in the sanctioned plan and the copy of which is annexed with the Agreement for Sale and also in the Agreement for Sale, which would also reflect in the records of the office of Sub-Registrar, without having the revised approval from CIDCO or NMMC as the case may be. A list of the members, showing the numbering of the flats and the shops, is always attached with the lease deed executed by CIDCO. Therefore, the builder will have to execute a rectification deed and have the same corrected in all the records such as MSEB, NMMC (if the area has been taken over), share certificates and all other records to avoid any confusion and complication in the sale and purchase of the flats and/or shops in future. By such deed only, the present correct number of the shops would be reflected in the records of the Office of Sub-Registrar.

My father has two flats in a society in Kalyan, out of which one was purchased in his name in the year 1977 and the other in the name of my grandmother, who has passed away in the year 1988 without leaving any will. My father told the secretary to record the flat of my grandmother in his name in the year 2011 without our consent. The original document of the flat of grandmother is with me. Kindly inform me the procedure to get the flat in my name.


–Vinod Kumbhar

If your grandmother has not left any will and there is no dispute amongst the legal heirs, society may transfer the flat of your grandmother in the names of all the legal heirs of your grandmother as per the provisions of bye laws (model bye-law No.35) and in case there is any dispute, the society will have to call for the succession certificate issued by a court of competent jurisdiction to transfer her share, though your father will be one of the legal heirs of your grandmother. The society can't transfer the flat of your grandmother simply on the request of your father and even with your consent in the name of any one of you.

society has been formed in June 2010, with the builder as the member for a few unsold flats and shops at Navi Mumbai. I purchased a flat from the builder from those unsold flats in January 2011 and agreement has been duly executed and registered. I approached the society for the membership, but they have asked me to undergo the procedure of CIDCO transfer and pay the transfer fee to the society. Please advise whether I may have to go for CIDCO transfer and have to pay the transfer fee to the society, when I am the first purchase of the flat from the builder?

–Raju Jaid

When a flat or a shop is sold by a builder from his unsold flats and the shops in the building, where a society has already been formed, the society is bound to enroll such a purchaser as a member of the society on the compliance of the requirements of the membership and society cannot charge the transfer fee in such cases. As regards CIDCO transfer, the entire land in Navi Mumbai is on lease hold basis from CIDCO and plots are allotted under different categories. If the plot in this case is from the category of tender plot, CIDCO transfer is not essential till the lease deed has been executed by CIDCO in favour of the society. In all other type of cases, CIDCO transfer is necessary and you may have to bear CIDCO transfer charges, if applicable in your case.

I purchased a flat in resale. The size of the flat is 625 sq. ft. and situated on the 3rd floor of a 7-storey building. The society is already registered and at the time of purchase of the flat by me, the society has charged Rs.37,500 as the transfer fee from the owner. Please let me know the rules and regulations regarding the transfer fee prescribed in the bye-laws of the society, because I think the society has charged much higher amount.

–Dilip Shah

The rate of the transfer fee in case of resale of a flat in a society building is mentioned in model bye law No.38 that such amount will be fixed by the general body meeting, but within the limits prescribed in a circular issued by the state government of Maharashtra and no additional amount by way of any name such as donation or contribution etc. will be recovered from the transferor or transferee. According to the government circular, the maximum amount as on date, which is to be charged is Rs.25,000. The society may levy transfer charges at the rate fixed by the general body meeting, if it is lower than the overall ceiling of Rs.25,000.

When we contacted KDMC for OC of our building, the officials told us that OC is CC, which, as per my knowledge, is the commencement certificate issued at the time of construction and OC is the occupancy certificate issued after the completion of the construction and various approvals. KDMC is not ready to give in writing and even not accepting our RTI application. Please clarify.

–Moin Sayed

When a construction of a building has to be taken up, the local authorities have to issue development permission/ commencement certificate and on the completion of the construction, occupancy certificate or the completion certificate is required to be issued before taking the possession of the flats. Therefore, two separate certificates are required to be issued, one at the time of starting the construction and another after the completion of the same and when the building is certified fit for occupancy which may be called OC or the completion certificate. In Navi Mumbai such a certificate is called occupancy certificate. As regards not accepting your application under RTI, you may proceed against KDMC as per the provisions of RTI Act.

Are there any rules about how society can allocate parking slots in the building compound? Where there are more cars than parking slots, can parking slots be given permanently to society members on a very low rent, which is not increased at all for years. Is there anything in rules that stipulate that everyone with car should get a chance in rotation or do the members adhere to the decision of the managing committee?

–Gautam Berry

Allotment of parking slots are governed by the bye laws adopted by the society. The detailed procedure is mentioned in the bye law No.78 of the model bye law of 2001, if the same has been adopted by your society. According to the said bye law, the parking slots have to be allotted on the basis of 'first come first served basis' but where the number of vehicles of eligible members are in excess of available parking slots, the managing committee will have to allot the parking slots by lots on yearly basis and the society may charge parking charges as decided in the general body meeting of the society.


(DNA Property Page 2 Dated 21.04.2012)