Withdrawal of Membership in Housing Societies

August 28, 2019
By Team MyGate

Most people become part of a co-operative housing society with the intention of becoming a lifelong member. But what happens when a member decides to opt out of the membership, transfer ownership or passes away?

A membership can be considered terminated under the following circumstances:

  • Upon resignation: If a member decides to resign and his resignation is accepted by the society, his membership is considered withdrawn and ceases to exist. However, the original member is required to give a three-month notice period to the managing committee and give a written request, explaining his reason for withdrawal. An associate member, on the other hand, can resign at any time (in writing) without a notice period. In both cases, the society duly reviews the resignation after an internal discussion. Cessation of membership does not absolve the member from any financial or other liabilities he has as a member. No society accepts resignation from a member unless they have paid their dues to the society in full. The member who resigns is still entitled to be paid back his share value from the society. However, the law puts limitations on the maximum amount to be refunded in a period of one year.
  • Transfer of shares and interest in the capital/property of the society: If the member decides to transfer his ownership shares in the society to another member or a new person, his membership is considered terminated. However, such a member is required to give a 15-day notice to the MC of his intention along with the prescribed form, consent of the person to whom the shares are being transferred and a set of documents required to be produced by the bye-laws of the society.
  • Upon the society’s dissolution: If the society is dissolved, terminated or if its registration is cancelled (for whatsoever reasons), the individual membership also comes to an end.
  • Upon death: When a person passes away, his membership to the society ends. However, since the members have the right to nominate others to whom the ownership is granted in the event of his death, his shares are legally transferred to that nominee. The amount is to be refunded by the society according to the bye-laws or by the agreement made between the inheritor and the society, but usually, it is within 6 months after the death of the original member.
  • Upon expulsion: If a society decides to expel the member due to internal conflicts, repeated breaches by the member with respect to defaulted payments, breaking of bye-laws, involvement in criminal conduct, or other irreconcilable differences that qualify for the expulsion of membership under the bye-laws, his membership is considered terminated. However, such a decision has to be made in agreement with the other members and the case of expulsion has to be presented to the Registrar, who then investigates the matter and hears both the parties. If and only if the Registrar approves the expulsion, the membership can be terminated.

When is an associate membership terminated?

An associate member ceases to hold membership in the event of death or resignation. However, even if the original member’s membership has ceased to exist, the associate member still continues to remain the member if he/she holds ownership/title in the share and property of the society.

When is a nominal membership terminated?

If the original membership ends due to death, resignation, expulsion, the person who is a nominal member also ceases to be the member. If a tenant or sublettee lives in the original member’s residence under a tenant’s agreement, his nominal membership ends at the end of the expiry period of the agreement or if the original member (owner) decides to terminate the agreement.

Things to remember:

  • All decisions regarding resignations, expulsions, and other reasons for termination are to be officially recorded during general meetings in the form of minutes of the meeting.
  • All of these correspondences have to be communicated between members and committee members in the form of official written correspondence.
  • The committee of the society is expected to remove from its register the name of the member whose membership is terminated due to any reason.
  • If the society fails to do so, the Registrar may take the necessary action and make it mandatory for the society, a decision it has to comply with.

It should be pointed out here that the cases of resignation or expulsion are few and far in between. Most memberships are passed on from generations to generations as nominees inheriting the ownership. As such, housing society memberships are a beneficial commitment. However, under any pressing circumstances if there needs to be the cessation of membership, both parties, i.e the member and the managing committee should follow the bye-laws/regulations specified in societies act with respect to refund and transfer.

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