Nomination in Housing Societies

Nomination in Housing Societies

Introduction

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 as a part of the nomination, 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

Nomination procedure and rules for housing societies

  1. A nomination application in the prescribed nomination form has to be submitted to the housing 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.

How to do nomination of property

Once the registration is over, you become the sole owner of the said property. After this, you could execute a will in favour of the person you want to turn into a nominee. This means that it would come under effect after, due to an unfortunate turn of events, something happens to you. After that, they would become the sole owners.

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