By Team MyGate
Everything About Housing Society Share Certificate
By Team MyGate
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.
- 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.
- 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.
- 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.
- 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.
- 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).
- 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.
- 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.