Amendment of Housing Society Bye-laws

Byelaws are a set of instructions and rules for a society to function. They come into effect once the housing co-operative is formed and are universally applicable to everyone. They are formed on the basis of the state’s co-operative societies act. However, based on the structure, requirements and membership, there are various permutations and combinations in bye-laws that a society can adopt at the time of registration and get them approved from the Registrar. Expansive as the bye-laws are, they do not always have the solution or workaround for every unforeseen circumstance. As it evolves, a society has the right to amend its bye-laws as per provisions of the law.

A society can amend its bye-laws when a pre-existing bye-law fails to meet its current situation or need adequately. For example, if your society followed a per square feet rule to arrive at a monthly maintenance charge, but underwent redevelopment and now wants to apply a hybrid maintenance calculation. In such a case, the amendment is necessary. Some societies may be facing a problem with meeting the required quorum for general body meetings and may want to reduce the required number. Others may be struggling with code of conduct within members and want to insert specific sub-clauses with respect to maintaining cleanliness, instructions to use common areas, etc. Many societies also incorporate a new penalty system to elicit better compliance from its members. Societies often put out new rules on notice boards or hand-deliver them to the members instead of amending bye-laws. However, to amend the bye-laws is a surefire policy to ensure the new rules are applied effectively.

Procedure to amend Bye-Laws

No bye-law can be amended or altered unless the members have been notified 14 days before the general meeting in which the amendment resolution is to be passed.

  1. The society should pass a resolution to amend a bye-law in the general body meeting after giving a notice to all its members with respect to the proposed bye-law.
  2. The resolution should be approved by 2/3rd of the majority from among members present in the meeting.
  3. From the date of the meeting in which the resolution was passed, the society should submit the resolution to the Registrar within two months.
  4. You are required to submit the below-mentioned documents when you send an application (with a non-judicial court fee stamp of Rs 25) to the Registrar:-
    • Copy of the existing bye-laws and the revision/ amendment to be made along with substantial reasons that justify the amendment.
    • Four copies of the bye-laws as they will appear after the amendment, signed by the Managing Committee’s authorized office bearers.
    • One copy of the notice given to members about the proposal of the amendment of the bye-laws.
    • Any specific documents required by the Registrar

Once the Registrar receives the application, he examines the proposal thoroughly and after he is satisfied that the amendment is for the benefit of the society, solves a particularly persistent problem, helps better functioning and is not in contradiction to co-operative societies act, he registers the amendment and gives the amended version of bye-laws to the society, certified and officially approved.

If the Registrar fails to close the application within 2 months, he should pass it on (within 15 months from the end of the 2-month window) the same application to an officer on a higher designation than him within the same office.

If the Registrar finds that a modification to the proposed amendment may be needed for it to be more effective, he suggests it to the society, explaining the rationale in writing.

Can the Registrar amend the bye-laws without the society’s own initiative?

If the Registrar believes that a particular amendment to the existing bye-laws is in the interest of a housing society and serves a bigger cause of the co-operative movement, he has the power to direct that amendment to be incorporated by the society within a specific timeframe decided by him.

The Registrar makes it mandatory to implement the amendment within the given timeframe. If the society fails to do so, the Registrar gives them an opportunity to present their case and justify the failure to abide. An issued and certified copy of the amendment is provided to the society which makes it legally binding. The society can make an appeal if there are any justifiable constraints in the amendment, however, it should be noted that the legal power remains with the authority to impose an amendment.

Ideally, all members should obtain a copy of the bye-laws from the housing society’s secretary, so that when an amendment takes place, they have a frame of reference to fall back on and understand why the amendment was made in the first place. The society is required a copy of bye-laws in its office for members’ perusal.

Everything About Housing Society Share Certificate

Societies try to dot the i’s and cross their t’s when it comes to record-keeping and paperwork but there are some hits and misses every now and then. Many societies forget to (or simply don’t know that they have to) issue share certificates to their members on time. While your sale deed is the proof that the property has been legally transferred in your name, a share certificate is a legal proof that you are the rightful owner of the co-operative housing society’s shares. It is the duty of the managing committee to issue share certificates after due diligence. Here’s all you need to know about housing society share certificates.

What is a Share Certificate?

A share certificate is a legal certification given by a housing society that a certain member is the registered owner of shares in the cooperative housing society. It is to be given to the member free of charge. Model bye-laws state that, “Share Certificate, prescribed in bye-laws, bearing distinctive number and indicating the name of the member, the number of shares issued and the value paid thereon, shall be issued by the society to every member for the shares subscribed by him, within a period of six months of the allotment of the shares.” The Registrar decides at the time of the society’s registration the total authorized capital which is divided into Rs. 50 per share and share certificates are thereof distributed to the members. The member is issued 10 shares (worth Rs 500) as the total share capital need not be the same as the actual number of shares issued.

Checklist for issuing the Share Certificate

  • The Share Certificate has to be collected by the member himself in person.
  • The member’s property should be clear of lieu.
  • The conveyance deed from the builder should be in possession of the society.
  • Every Share Certificate should have the seal of the society and be signed by the Chairman, the Secretary and one member of the committee, and authorised by the committee before being issued by the Secretary.
  • The name and the order of names (for primary/associate member) should appear exactly as it is on the original sale agreement between the member and the builder.
  • The member has to indemnify the society against any loans against its name, finish any paperwork and clear any arrears that have to be paid to the society.
  • The society has to ensure that the member provides an indemnity bond stating that he has not transferred the share certificate to anyone else or created any charge or mortgage on the share certificate in favour of any bank, employer, any person or finance agency.
  • The member has to present the original sale agreement while collecting the share certificate.

In case of transfer/resale, the original share certificate has to be given to the society along with the other documents needed. If the share certificate is being transferred to a new member after resale, they have to finished all paperwork prior to handing the share certificate, including the required transfer of shares procedures.

When the ownership of the shares is being transferred to another person, the new member has to pay the transfer premium, produce applications/documents required by the society while it has to be ensured that no dues are pending by the former member. In the event of the death of the original member, the heirs have to apply within 6 months of the death for the share transfer to the nominee along with the issuance of a new share certificate.

Readymade share certificate booklets are available online, housing federation offices or at book printing agencies.

If the members’ arrears are duly paid, and the documents requested by the society are submitted in proper condition, the society MUST issue the share certificate within the prescribed time limit after allotment of actual shares. If not, the member has the right to file a legal notice/injunction against the society.

Issuing a duplicate Share Certificate

It is advisable to keep your original share certificate in pristine condition in a safe place. Getting a duplicate share certificate is not as simple as walking into the society’s office and getting a duplicate copy on the same day. If your share certificate is soiled, misplaced, stolen, destroyed or lost, you can ask your housing society to issue a duplicate share certificate after following the below-mentioned procedure.

  1. File an FIR to the local police station, registering a report that the original share certificate has been lost, misplaced or stolen. Retain the copy of FIR acknowledged by the Police.
  2. Send a written application to the society stating that the original has been lost, misplaced, stolen (is not traceable) and request the society to issue a duplicate share certificate. Also, attach the acknowledged copy of the FIR with the application.
  3. Submit an indemnity bond of Rs 200 to the society, indemnifying the society of all cost/ results of issuing a duplicate share certificate. The Indemnity Bond should be duly notarized and attached along with the application and FIR copy.
  4. Once the society receives the application, it is placed before the managing committee in the next general body meeting. In the same meeting, the society examines the application and attached paperwork and approves the request for a duplicate share certificate.
  5. The society puts out the notice on the society’s notice board and also published notices in two local newspapers (with respect to issuing a duplicate share certificate).
  6. The society waits for 15 days for any objections after putting out the notice on the society’s notice board and the advertisement in the newspapers.
  7. If no objections are raised, the society issues a duplicate share certificate to the member. The cost of publishing notices in newspapers has to be borne by the member.

Nomination in Housing Societies

Nomination in housing societies is a fairly simple and straightforward procedure that requires basic form filling from the member and registration by the society. There may be a few complications, however, if the member has not nominated anyone while being alive or if the nominee is not the same as the actual legal heir, and there arises a legal dispute.

Let us first list down the types of memberships in a housing society to better understand nominations.

Three main types with context to this topic are:

  • Original Member
  • Associate Member
  • Nominal Member

The original member is the one whose name appears first in the share certificate and is the primary title owner of the property/capital in the society. An Associate Owner is the secondary title owner in the property whose name appears second in the share certificate and is a co-owner or joint owner of the flat/home. Both the primary and associate members have legal rights over the property, hold the right, title and interest in the property individually or jointly.

A nominal member is someone who is nominated either by the primary or associate member and is defined by model bye-laws as a person who does not hold the right, title and interest in the property individually or jointly admitted to Membership as such after registration.

What is the purpose of the nomination?

The most common purpose of nomination procedure is to enlist members’ children/relatives as nominees, who are their legal heirs. If they are minors, they cannot be legally allowed to be the title holders of the ownership. Members also nominate their children’s guardians, close family members who under the circumstances of their death, can be the custodians of the property and look after it until the heirs can legally inherit it. Another reason is to nominate their tenants so that there is an official entry in the society’s registers of them having rented the residence.

Who can nominate

A mentally fit person over the age of 18 can be a member of a housing society and only a primary or associate member can legally nominate another while being alive.

Who cannot nominate

  • Minors
  • Nominees
  • Companies (partnership firms, individual firms, LLP, Private/Public Companies, Trust, NGO, HUF, Society)

Who can be nominated

  • Legal heir/ relative/ beneficiary
  • A non-legal heir/ beneficiary
  • Attorney, custodian
  • Any other person deemed fit by the primary and associate members.

Who cannot be nominated

  • A deceased person
  • A nominee cannot nominate himself
  • A non-Indian citizen

What is the procedure to nominate?

  1. A nomination application in the prescribed form has to be submitted to the society by the original/associate members, naming the person to whom the ownership shall be transferred in the event of their death.
  2. Bye-laws state that “the acknowledgement of the nomination by the Secretary, shall be deemed to be an acceptance of nomination by the Secretary”.
  3. The first nomination is submitted for free. Any subsequent revocations/nominations are subject to a fee of Rs 100.
  4. The nomination is placed before the committee meeting, is checked by the Secretary for anomalies and is recorded in the minutes of the meeting as well as duly registered in the Nomination Register, assigned a serial number with a stamp and signature within 7 days of the meeting in which it was approved.
  5. An approved copy of nomination is given to the members for their records.
  6. This entire procedure is to be completed within 2 months.

Actual inheritance with respect to nominations

In most cases, members nominate their own children, siblings, parents or the next of kin to inherit ownership of their property. Whenever a nominated person is not a legal heir, he is most likely a trustee or custodian who is required to look after the property and usually, a will exists in which the original member/ associate member name the heir. A nomination serves as a useful document so that the society/bank/insurance etc. can understand whom to hand over the property when the member dies. However, in situations where the nominee is not the same as the legal heir, or if the member has nominated a non-legal heir, there may arise a complex dispute that can be solved by the intervention of the court. The society usually hands over the property to the nominated person, if the legal heir claims otherwise, the matter lies in the hands of the court. The society should, therefore, do its due diligence in transferring the property as per the recorded nomination. Only when the member dies without nominating anyone, does the society invite claims and objections after putting out a notice in the newspapers and then thoroughly investigates the rightful claimant of the property, although in such circumstances too, sometimes the court of law can help determine proper heir.

Cooperative Housing Society Funds and their Utilisation

You would rarely come across a well-run housing society in a shambles, where lifts are defunct, lawns are unkempt, floor bulbs are broken and water pipes are leaking. All of your society’s amenities and services run smoothly like a river because they are paid for and looked after. The nitty-gritty of a society’s financial management is no joke. Members are often confused and even agitated when they are asked to contribute towards funds that seem to be inconsequential on the surface, but when understood well, they make a whole lot of sense. In this article, we will shed light on a variety of housing society funds that create a perfectly healthy state of affairs.

Types of funds in a cooperative housing society

  1. Reserve Fund: A Reserve Fund is made up of entrance fee paid by the members, transfer fees when shares are transferred with occupancy rights, transfer premium received when a member transfers interest in the capital/property, general donations (not for a specific purpose) received by the society. Accumulated Reserve Fund gets carried forward to the next year every year.
    Utilisation: As per the model bye-laws, Reserve Fund is used for repair, maintenance and renewal of the society’s property.
  2. Repairs and Maintenance Fund: This fund is made up of a fixed maintenance amount paid by the society’s members on a monthly, quarterly, bi-annual or annual basis. It is calculated at a rate decided at general body meetings based on per square feet, equal division or hybrid methods. Bye-laws state that rate is subject to the minimum of 0.75 per cent per annum of the construction cost of each flat for meeting expenses of normal recurring repairs.
    Utilisation: As explained in the title of the fund, it is used for the expenses of amenities, bills and maintenance of premises of the society, repairs, service staff fee, common electricity expense, water charges, etc.
  3. Sinking Fund: A Sinking Fund is a separate amount that the members have to pay on their maintenance bill. A housing society saves this amount for the time when there are any structural additions or alterations to the buildings/wings of society. A Sinking Fund is fixed at the general body meeting and is subject to the minimum of 0.25per cent per annum of the construction cost of each flat, excluding the proportionate cost of the land.
    Utilisation: These are done after consulting the society’s Architect who may recommend such additions/heavy repairs to strengthen the integrity of the structure for the safety of the members and also for posterity.
  4. Education & Training Fund: Members have to contribute to this fund. Each member has to pay Rs 10 every month or as decided by the general body meeting.
    Utilisation: The purpose of this fund is to analyse the issues and complaints of the society with respect to administrative measures and create an atmosphere of camaraderie and unity through conducting training programs in order to develop professional skills among members, distribute articles, books, etc. to train members for a specific skill, to run training classes pertaining to the co-operative movement and issue certificates/diplomas to upskilled members.
  5. Other Funds: Major Repairs Fund is to be created by the society to fill the gap between maintenance fund and Sinking Fund. This has to be paid as and when required and decided by the general body at the rate fixed on an area basis. Additionally, some societies create a surplus fund as and when needed in order to celebrate festivals, special days and other occasions. This does not constitute a formal or mandatory fund, however, members contribute voluntarily to participate in the festivities and to partake in the activities of communal living.

Why do societies generate these funds?

A housing society is a cooperative and democratic movement that functions on the basis of contributions made by the member. All amenities, services, repairs, etc. are paid by the members themselves and there is no outside agency that is going to swoop in and bear the expenses on behalf of the society. Neither the managing committee nor the members would subject themselves to any negative surprises due to lack of funds, a scenario that can be easily avoided if funds are generated fairly and properly in advance. To avert any unexpected financial losses in terms of repairs, failure of amenities, structural damage, the society has to be prepared in order to be able to bear the expenses. It does so by collecting money on a monthly basis in general so as to not burn the pockets of its members. The common ways to generate funds are mentioned below:

  • Entrance Fees
  • Deposits
  • Loans/subsidies
  • By issuing shares
  • Voluntary donations
  • Maintenance bills
  • Fees on the transfer of shares
  • Non-Occupancy fees
  • Renting space for advertisements, billboards
  • Renting terrace space for mobile towers

Housing Society Title Insurance

Imagine this. You invested your money in a home that you love in a society you trust. You did your due diligence with paperwork and payments, picked out plush drapes and ordered bespoke furniture and settled in comfortably in your new digs. One fine day, you find out that the land on which your residence is built, is being claimed by another as theirs and you have to fight for it in the court of law. Wouldn’t that be a nerve-wracking and traumatic experience? Learn about Title Insurance in this article to see how it saves you from any unexpected ownership disputes.

What is Title Insurance?

A Title Insurance protects homebuyers against any losses, damage or defects in the Title (ownership) of the property. As a real estate project evolves, builds over time, the ownership changes many hands, from the landowner, builder, to the homebuyer. When you are purchasing a property, you are essentially purchasing a legal Title to the Ownership of that property. As the property (including the land it was built on) may not belong to the developer and could have been acquired from multiple successive owners, its Title may be disputed due to transfer errors or if proper and legal ownership documents have not been generated each time the property has been bought and sold. A Title Insurance indemnifies the homebuyer against any disputes, litigation and settlement expenses that are caused over the ownership of land from previous owners and also from claims of ‘ownership’ by other parties. It is an effective risk transfer mechanism.

In India, the real estate market suffers from many setbacks and misrepresentations with respect to ownership of property, such as a forgery in the previously owned deed, inadequate documentation, among others. If a Title Insurance is purchased, the homebuyer is safeguarded against any repercussions and tedious court procedures as the original property records (dating back to years ago) may not always be available for verification.

What is covered under Title Insurance?

Real Estate Regulatory Act (RERA) Registered Developers are mandated to buy Title Insurance for all their projects and pass it on to the buyer at the time of the actual sale of the property. Indeed, non-RERA developers too have started buying it for the additional credibility it brings.

This is a relatively new category of insurance that only a few financial agencies have started providing recently in India, noticeably HDFC Ergo and SBI.

It not only insures buyers against title defects that may happen in the future, but also covers losses that may have occurred in the past and not discovered before the policy commencement date.

Typically, Title Insurance coverage includes but is not limited to the following:

  • Losses due to order of settlement
  • Cost of demolition, alteration in existing structure if built without a permit by the previous owner
  • Title defects due to forgery, fraud, misrepresentation, impersonation, incompetent/inadequate/under duress documentation
  • Failure of any authority to give transfer of conveyance
  • Coverage when the insured cannot obtain a permit to build over previously incorrectly subdivided land prior to sale
  • Documents that may harm the title due to improper, false or expired power of attorney
  • Inadequate descriptions and plans in historic title deeds
  • Property encroaching adjoining owner’s property
  • Coverage for insured if the title is not good and marketable
  • Errors and omissions in drafting title/registration which results in provisions not being enforced duly
  • Unknown burdens or variations that may have been imposed in the historic title deeds

Initially, the builder/developer is liable to buy the Title Insurance and pay the premium in one-time payment (which usually provides coverage for 7 to 12 years). Once the handover has been made, later the housing society may have to bear the remaining expenses and also when the insurance has to be renewed, the expense will be carried by the members.

How does Title Insurance benefit homebuyers?

Homebuyers who are looking to buy from builders/developers in residential spaces can definitely avail the ultimate benefits of title insurance which is bought by the builder. Ultimately it protects them from risk, enhances the market value of their property, saves them from long and arduous litigation procedure in case if a title dispute occurs from a historic deed, eliminates the threat of a project being stalled due to title disputes, and indemnifies them from all claims of ownership over their investment. Another major benefit is that the first time premium is paid by the developer and only the renewal charges and/or other premiums have to be borne by homebuyers at a later stage.

What should housing societies need to know?

Housing societies stand to gain the primary benefits of title insurance as currently, independent home buyers are not the primary beneficiaries of the title insurance. It is a practice for builders to ensure that the title deed provided to the society is clean and free from disputes. However, having title insurance is a foolproof measure for a society to ensure risk-free handover because it means that every member will be safely insured against the unforeseeable claims or losses in the future and no unexpected financial loss can occur to any member or to the society on the whole. While RERA developers are mandated to provide title insurance to the society, non-RERA developers can be urged and convinced to purchase title insurance before handover if the society has any suspicion regarding land ownership.

Transfer of Shares in a Housing Society

Indians have always been savvy with real estate investments and consider a home to be their greatest tangible asset. In a growing economy, it is not uncommon for homeowners to resell their residence for a good profit, the most common reason for transfer of shares in a housing society. Other than that, residences see transfer of shares if the owners pass it on as inheritance or in the event of the death of the original member, transfer ownership to other family members, pay off debts in the form of property or other personal reasons. A flat in a housing society could change multiple hands in its entire lifecycle. Model bye-laws have extensive provisions for such exchanges; these rules if followed duly make the transfer of shares a fairly easy and unencumbered procedure. In this article, we will list down all the steps a member needs to follow while transferring ownership of his residence.

What are the pre-conditions before the transfer of shares in a housing society?

  1. The person who intends to transfer his shares has to give fifteen days’ written notice to the society.
  2. The transfer should be made according to the bye-laws of the society.
  3. All pending dues to the society from the person who is transferring shares should be totally cleared.
  4. The transfer should be duly registered in the records of the society.
  5. No shares can be transferred unless the ownership has been held for at least one year (unless there is a court order for transfer)
  6. Any charge in favour of the society on the share so transferred will continue unless discharged otherwise.

What is the procedure to transfer shares in a housing society?

A 15-day written notice is to be furnished along with the name and the consent of the person to whom the shares are being transferred along with the proposed value of the transaction.

The Secretary places the request in front of the managing committee who decides if the member is eligible for such a transfer.

Whether the transfer of shares is approved or not, the Secretary has to inform the transferor within 3 days of making the final decision.

If the transfer is eligible, the following procedure has to be completed:

  1. Discharge of all dues pending towards the society from the transferor along with an undertaking to do so
  2. Share Certificate along with the application in the prescribed form for transfer of shares/interest in the capital/property of the society
  3. The transferor has to submit his resignation form
  4. A valid reason in writing for the transfer of shares (whether it’s a sale, inheritance, or any other)
  5. Application from membership from the person to whom the shares are being transferred
  6. Transfer fee of Rs 500 (or as prescribed in the bye-laws)
  7. Entrance fee of Rs 100
  8. Transfer premium as decided during general body meeting but not more than the government prescribed amount of Rs 25,000.
  9. A copy of the registered agreement (with required stamp duty) should be paid to the society
  10. An undertaking by the person to whom the shares are being transferred stating that the residence will be used for the purpose it is being owned (residential, commercial, etc)
  11. A NOC from a financing agency, bank, etc if the person who is transferring the shares has acquired a loan to buy ownership of the residence
  12. Any other declaration or undertaking that may be required by the bye-laws of the society

Procedure after the application and submission of documents

The Secretary of the society is obliged to examine and verify all documents submitted by both parties and ensure they are in compliance with the bye-laws. After that, he should present the entire paperwork to the managing committee.

If the application is rejected for whatsoever reason or approved duly, the Secretary is responsible for informing the applicant within 15 days to 3 months from the date that the decision is made. If the society fails to make any communication to the applicant, it is assumed that the transfer has been accepted and the new member is accepted by society.

Transfer shares in the event of death

In case of the transfer of shares of a deceased member, the society should transfer them to the nominated member or the legal heir of the member. The nominees are required to apply for transfer of shares within 6 months of the death of the original member. Multiple nominees can become joint/associate members after picking a main member and provide an indemnity bond to the society. If no nominee comes forward, the society puts out a public notice (along with newspaper ads), inviting claims to membership. The society examines the claims/objections and if need be, they take the help of the verdict of a Competent Court. If there are no claimants, the property is vested in the society.

Stamp Duty in Housing Societies

Homebuyers prefer the affordable and convenient option of buying ownership in co-operative housing societies, yet they have to consider the expense of stamp duty which is a prominent feature of real estate transactions. In this article, we will give you a general overview of what is meant by stamp duty and what factors to consider when determining the actual payment of it.

What is stamp duty?

Stamp duty is a form of tax that is levied by the government on the transfer of property which is legally documented. The stamp duty is to be paid by the homebuyer. According to Wikipedia, “Indian laws require stamp duty payments on…documents affecting rights and title to property…. For example, Maharashtra state’s stamp duty law is governed by The Maharashtra Stamp Act, 1958 (Bombay Act LX of 1958).” Your document of ownership ultimately validates your real estate transaction. As a homebuyer, you have to pay ‘one-time stamp duty’ to seal the deal. Stamp duty varies from state to state but each state has stamp duty acts that homebuyers are required to abide by. For example, Indian Stamp Duty Act, 1899 applies in Delhi after the sale is complete. Stamp duty applies on residential and commercial properties.

How much stamp duty is charged to homebuyers?

Presently, stamp duty is charged from 3% to 10% in different regions of the country. In Maharashtra, up until 2014, the Registration fee was Rs 25000 but after 2015, it has increased to Rs 30,000. Stamp duty is 5% in the state along with a surcharge of 1% for homebuyers in Mumbai. However, in the case of co-operative housing societies, the share transfer premium is decided by the managing committee of the society and does not exceed Rs 25,000 in most cases.

In Delhi, 4% stamp duty is charged for a woman homebuyer and 6% if the buyer is a male.

In urban areas in Karnataka, the stamp duty is 5.6% of the value of the apartment.

In Ahmedabad, the stamp duty is at 4.6%.

In Pune, it ranges from 3% to 5%, while in Kolkata, it is between 5% to 7%.

If you fail to pay the stamp duty, you are penalised from 8% to 20% of the actual stamp duty and may have to face imprisonment in certain cases. However, the penalty cannot exceed 200% of the actual stamp duty due amount.

How is the stamp duty calculated?

To understand how stamp duty is calculated, we’d have to be aware of the several factors associated with the calculation into account. These include the ready reckoner rate which is the standard value of your property assessed by the state government in which the property is built, or the circle rate which is the minimum value at which the transfer or exchange can occur. If the ready reckoner rate is lower and the agreement rate between buyer and seller is higher, the higher value is considered for charging the stamp duty intended use of the property (i.e residential, commercial, storage, manufacturing, etc.) Other factors taken into account are the area/locality in which the property is located, the age and gender of the owner and the type of property, e.g. flat, bungalow, estate, etc. The good news is that many online stamp duty calculators are easily available that give you a good estimate of how much stamp duty, you are to pay for the value of the property. For example, if you were to buy a property estimated at Rs 40,00,000 in Maharashtra, you will be charged Rs 1,55,200 as stamp duty in general. Of course, the rate may vary if the property was in Mumbai. These are estimates and the actual stamp duty may vary depending on the factors mentioned above. Savvy homebuyers shortlist several properties and compare overall rates keeping in mind the variations in stamp duties. Stamp duty can be paid through physical stamp paper, via a franking method in which an agent is required, or by the way of e-stamping.

In case of cooperative housing societies where transfer of shares is involved, the stamp duty is paid after determining the actual market value of the property (usually charged between the range of 3 to 5% depending on the location of the immovable property whether within the municipal corporation, cantonment, Nagar panchayat, Gram panchayat, etc). It is not decided upon the rates in the ready reckoner or the demand of the seller who is transferring the shares. So if the homebuyer is not willing to pay extra stamp duty, the sub-registrar gets involved and sends forward the request to the collector to determine the actual market value of the property.

If the property is inherited, the stamp duty is only Rs 200.

Exemption on stamp duty

According to co-operative societies act 2008, a society is exempt from stamp duty, taxes and fees on instruments executed by or on behalf of the society and relating to the business of the society.

Recently, the Bombay High Court has ruled that stamp duty cannot be charged for past transactions, which means that only up to 10% of penalty will be payable on deficient stamp duty (instead of the usual amount which went up to 400%) on transactions of sale/tenancy made on or before December 2018.

Stamp duty can be claimed as a tax deduction up to a limit of Rs 1,50,000. Home loans do not include stamp duty and registration charges and have to be paid out of pocket by the homebuyer.

Powers and Duties of Registrar of Cooperative Societies

The Registrar can be compared to the ‘friendly neighbourhood Spiderman’ that helps society and committee members when they are stuck in an imbroglio, prevents any wrongdoing by greedy middlemen, intervenes when the society is slacking in its duties and without the mask or the costume acts as the legally appointed supervisor who can be counted on for resolutions and redressals. In other words, the Registrar’s office is the first legal point of contact for most circumstances and the authority figure that plays a vital role in ensuring the effectiveness and longevity of the society. The office of the Registrar is established for the purposes of maintaining transparency, efficiency, speediness of action, and equitable settlement of disputes. This article covers the powers and duties of the Registrar who is aided by Joint/Deputy Registrar, Assistant Registrar,Specially Appointed Officers and other administration staff who operate within assigned districts and jurisdictions in each state.

Powers of the Registrar

  • Amalgamate, divide or re-organize co-operative societies
  • Ensure, supervise and regulate proper investment of funds by societies
  • Issue directives to reform, change, amend society bye-laws
  • Cancel or suspend the registration of a society
  • To appoint an Inquiry Officer and an Administrator to inspect and put in motion rectification measures if a society is malfunctioning
  • To enforce a directive or a law that is being flouted by the society
  • To be an arbitrator and settle a society’s disputes
  • To remove and penalise any member of the managing committee if they are found in violation, or engaged in misconduct or fraud
  • To appoint the Secretary, Manager, Treasurer or any other office-bearer as part of the managing committee or as such to appoint an entire committee if the society fails to elect it on its own
  • To approve or disapprove a membership in case if a prospective member appeals to the Registrar’s office
  • To fix surcharge on negligent functionaries of cooperative societies
  • Play the role of an appellate court if and when needed
  • Call a Special Body Meeting of the society
  • Close down a defunct society and cease all its functions
  • To issue a legal action against defaulting/fraudulent builders/architects/contractors, etc.
  • To summon any member of the society with respect to an inquiry and demand to produce any documents or records from the society for examination
  • To seize the records, assets or property of the society
  • To appoint an auditor for the annual audit of the society, inspect the audit results and set in place rectification or punitive measures for any defaults or malfeasance
  • To appoint an officer to conduct the mandatory Annual Body Meeting of the society if the society fails to do so on its own
  • To remove a member from the society if he/she is found in gross misconduct or harmful and criminal behaviour and oversee the eviction/auction procedure when the society needs to recover its dues
  • To execute welfare schemes or loans for better functioning of the society
  • Ensure timely elections of the society, appoint a Returning Officer and enforce the election if need be
  • Penalise committee members who refuse to end term after five years in office (unless re-elected)

Duties of the Registrar

  • Registration of co-operative housing societies
  • Accept resignations by society members or committee members
  • Approve and disburse loans from one society to another
  • Approve proposed bye-laws of the society after ensuring they are in compliance with societies act
  • To respond to a membership appeal, society inquiries and other relevant applications (if directed correctly) at the Registrar’s office and correspond in a timely manner
  • To be an arbitrator on behalf of the member if the society is refusing membership under unacceptable pretexts
  • To provide a fair hearing opportunity to any member of the society who is facing penalty, expulsion or allegations
  • To provide a fair hearing to the society or any other third party who is involved in a dispute for which the Registrar is the arbitrator
  • To appoint an Election Officer for the society’s election who oversees the entire process (except societies with less than 250 members who can conduct their own polls)
  • Set restrictions on assignment of occupancy right in the flat
  • To change, modify the name of the society upon their application
  • To send a Representative from the Registrar’s office to attend a society’s redevelopment meetings and approve/disapprove any related proposals
  • Maintain records of all registered societies, their election records, committee members’ addresses, and audit reports
  • To handle below mentioned member complaints and provide redressal:
    • Registration based on misrepresentation
    • Non issuance of Share Certificate
    • Refusal of election nomination on invalid reasons
    • Demanding excessive premium or non-occupancy charges under false pretexts
    • Refusal to inspect society’s records or tampering, suppression of records
    • Failure to prepare account audit reports, annual meeting reports
    • Misappropriation or misapplication of society’s funds
    • Disqualified members being appointed to committee
    • Reconciliation of accounts/audit reports/audit rectification reports
    • Not conducting elections at prescribed period
    • Failure to conduct annual general body meetings
    • Not filing returns and statements
    • Classification of active and non-active members

This is a comprehensive (not exhaustive) list of the primary duties and powers of the Registrar of Cooperative Housing Societies. Of course, there are other minor or even unforeseeable scenarios that are often handled by the Registrar’s office as and when they arise. The model bye-laws, Cooperative Societies Acts and society rules are also helpful in understanding the nuanced situations under which the Registrar’s role is clearly defined.

This Bangalore Community is Securing Lives Better with MyGate

For a gated society to function seamlessly, there’s so much to be taken care of – utilities, amenities, security – to name a few. And, ensuring the same is a team of dedicated individuals – the Management Committee (MC) – whose common goal is to facilitate a happy and healthy community living experience to all.

This week, we had the opportunity to interact with Prasad Shetty, one of the nine members of the MC at Beary Harmony Homes, Hennur, Bangalore. Mr. Shetty explained to us how the committee is adopting a mix of practical and digital solutions to ensure a hassle-free, more secure experience for its 150 families.

What made you feel the need for a community management app?

It was required because ultimately the older ways of communications were failing. We were repeatedly facing issues with the intercom. The security guards were making intercom calls to the residents, unaware of the fact that there is no one to answer on the other end.

Also, we wanted to minimise human errors in ensuring safety at the main gates, and this could only be achieved by automation, digitisation – in short, modernisation. I was aware of MyGate and heard a lot of other people in my network using it. However, we were looking to hire a security agency that was thorough with the app.

How is MyGate helping Beary Harmony Homes?

Residents now know who is seeking entry approval and can control who is coming to their house, that is the biggest thing! The other aspect is the notice board, all on one app. you don’t have to access different apps or check emails separately to keep track of community-wide announcements.

The security process is streamlined with the approval and denial system in place. Otherwise, traditionally, residents would get a call from the security intercom every time there was a visitor. The delivery management has become smooth. Whenever the delivery guys come in, MyGate showcases the executive’s details for the residents to be aware of who should they expect and when.

How are the residents accepting the change?

Oh, they’re absolutely fine! Initially, of course, there were a lot of questions and varied views. It took some time to get all their apprehensions removed gradually. We had to show them value and had to deal patiently. Once the residents started using it, they realised the benefits and they are pretty comfortable now.

What makes your job challenging as a member of the committee?

In a community, the challenges comprise dealing with different mindsets and behaviour patterns. Trying to get everyone used to a certain way of living and adopting new standards is always difficult because there are so many people involved. So, getting everyone on the same page is a humongous task and a continuous challenge.

So, how do you tackle this challenge?

We have to make people understand the value and utility. If there are traditional systems that are not yielding desired results, we have to get rid of them. At the same time, a new initiative has to be launched to achieve the desired objective, for which we have to get people on board and promote it.

We conduct monthly meetings where we invite everyone to come and talk to us if they have any particular issue. We address concerns one-on-one so that people don’t feel left out. In fact, we have weekly meetings among the committee members to brainstorm, evaluate and plan around how the community experience can be improved.

How has MyGate simplified your life as a committee member?

MyGate is helping us Secure Life Better; security processes are better aligned. managing visitors is much smoother, and there are no miscommunications. We know when a person tries to forge an entry and we can keep a tab on similar events via app notifications.

Since all activity is recorded, we – as MCs – have a context in every unusual scenario and can look at things from a 360-degree view, rather than act based on assumptions.

What other solutions are adopted to offer a better community experience to all?

Well, we have introduced practical solutions like waste segregation. The wobbly stones in all the staircases are replaced with slip-resistant material to offer better grip. Also, our building is equipped with a ramp that runs until the lift for wheelchair access in case of medical emergencies. We have provided a wheelchair, ready to be used by anyone in need.

We have reduced the power consumption by more than 20% over the years. This is achieved by turning off the lights in common areas when not required and keeping the electricians and office management on their toes to see that power is not wasted.

We reward our housekeeping staff with hampers to keep them motivated. As a practice, we engage in regular discussions with residents and leave the floor open for them to share concerns or ideas, at any time.

Transfer of Flats in a Cooperative Housing Society

The real estate sector is slated to grow at around 12% in the next few years and has recently received a boost from the government’s plan to provide cheap loans and strengthen housing loan companies. Housing society members have a unique advantage over other types of ownership when it comes to affordability and credibility, hence the frequent buying, selling and reselling of ownerships. At the same time, flats are transferred to heirs, family members, etc on a consistent basis too. This article talks about the basic rules and procedures to follow when transferring your flat/home to another along with the documents needed for the transfer.

What are the rules or preconditions to transfer flats?

  • The member should have completed one year of ownership of the said flat before they can transfer it to another.
  • The above condition does not apply to members who get ownership by court order.
  • Anyone intending to transfer their flat has to give a 15-day notice in writing to the society.
  • The application should have valid reasons for transfer of flat (explained succinctly).
  • Documents from both parties (transferor and transferee) are required along with the transfer premium (if applicable), admission fee and transfer fee.

What is the procedure for transfer of flats?

After the member gives the prior notice to the society, the Secretary presents it to the Managing Committee in the next general meeting. They have a period of 30 days (to a maximum period of three months) to decide and once the decision is made, they have 8 days to communicate it to the member.

If the Managing Committee finds that the member is not eligible for a transfer, the same has to be communicated to the member with the reason for ineligibility.

If the society fails to correspond to the member regarding his application within 3 months, it would be considered that the application has been accepted and the new member has been admitted to the society.

If the member requires a NOC from the society, the Chairman/Secretary is liable to provide it to the member. If it cannot produce the NOC, the reason has to be communicated to the member.

The society cannot stop the transfer of flat or the membership changing hands for any reason, except if the member has violated compliance rules again and again (such as defaulting on payments, criminal activities, etc.)

What are the documents required for transfer of flats?

Altogether two sets of documents are needed; one from the buyer/transferee and the other from the seller/transferer.

Documents needed from the seller (the one who is transferring the flat)

  • Notice to society with clearly written reason for transfer
  • Application in the prescribed form with an intention to transfer the flat and shares to the new member/buyer
  • Resignation by the current member
  • Letter of consent from the buyer/transferee stating he is in agreement with the transfer
  • No Objection Certificate from outside financial agency (if applicable)

Documents needed from the buyer/ the one to whom the ownership is being transferred

Application for membership along with an entrance fee of Rs 100.

  • Letter of consent from the buyer/transferee stating he is in agreement with the transfer
  • Cover letter that informs the society of the sale/transfer
  • Buyer’s declaration form of undertaking stating the purpose for which the said ownership is being transferred and will be used
  • Transfer form along with the transfer fee of Rs 500
  • Original Share Certificate
  • Transfer premium has to be paid by the new owner at a fixed rate (Rs 25,000) or at the rate which is predetermined at the general body meeting, whichever is less. It cannot exceed the amount decided by the Department of Cooperation or the State government; it may be revised at different times.
  • Transfer premium does not apply when the owner is transferring the flat to a family member or between two members of the same society, or when a deceased member’s residence is transferred to a nominated person, legal representative, heir or next of kin.
  • Any other declaration which may be prescribed by by-laws or specific rules of the society
  • An undertaking to follow all duties and liabilities of the society
  • Indemnity Bond that indemnifies the society
  • Agreement with proper stamp duty along with a NOC (by bank, income tax department, any other authority if applicable)
  • Proof of payment of stamp duty
  • Possession Letter from transferor to transferee
  • NOC from society if the member or buyer is in need of it.

If the society fails to provide the NOC, they can appeal to three committee members or appeal to the Registrar. The society should also provide a No Dues Certificate to both parties so that there is documented evidence that the transfer took place with due diligence on behalf of the original member.