Transfer of Flats in a Cooperative Housing Society

September 12, 2019
By Team MyGate
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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.

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