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By Legal Bureau

Limit fixed for transfer fee,
Donation or any other charges not allowed

The law is very clear as to how much transfer fee can be charged in co-operative housing societies on a transfer of flat. The Commissioner for Co-operation and Registrar Co-operative Society, Maharashtra, has issued two circulars, clarifying the matter. The circular contains the table of maximum allowable transfer fee and clearly states that no further amount can be taken as donation. For the clarity and information the circulars are reproduced here in below.
Office of the Commissioner for Co-operation and Registrar, C.S. Maharashtra State, Pune.
Circular No. Grihnirman /Gala Tabdil/FFC/89 dated 27th Nov. 1989.
Sub : To increase the amount of premium to be paid on transfer flats.
There is a provisions in bye-law No. 40 (d) (7) of the new model bye-laws published premium maximum upto Rs. 1000/- to be paid to the society is less as compared to the person, he will have to pay the fee as transfer premium as mentioned below. Necessary amendment to bye-law No. 40 (d) (7) may be made accordingly and then executed by the societies.
2. It is therefore requested to bring to the notice of all co-operative housing societies falling under your jurisdiction, the instructions contained in the above said circular and accordingly, to give instructions to the societies to make amendments to their bye-laws at appropriate places.

Area under Maximum premium
To be paid
1) Municipal Corporation & Development Authorities Rs. 25,000/-
2) ‘A’ Class Municipalities Rs. 20,000/-
3) ‘B’ Class Municipalities Rs. 15,000/-
4) ‘C’ Class Municipalities Rs. 10,000/-
5) Rural Sector Rs. 5,000/-

Sd/-
For Commissioner for Corporation & Registration C.S., M.S., Pune.

Transfer fees :
How and in what way recoverable by a society

Can a society insist upon getting transfer fees as a matter of right without passing a proper resolutions to that effect under the old bye-laws or whether a society can charge more than Rs. 25,000/- as transfer fees if it adopted the Model Bye-laws ?
This question has been debated again and again in many societies and quarrels take place between the members on one side and the Managing Committee on the other side. It is to be noted tat even though every Housing Co-operative society is autonomous it has to comply with the Maharashtra Co-operative Society Act 1960 and its rules and regulations.
One such important case arose in the case of Ichalaxmi H.Mehta v/s. Anju Premises Co-operative Society Limited in which the main point was whether the society could refuse admission to membership without payment of transfer fees. The society wanted to taken transfer fees in the guise of common amenity fund. It appears that many societies take transfer fees, not as transfer fees but as ‘contribution to repair fund’ or ‘contribution to welfare fund’ or donation towards the fund of the society. Call it by name, the society has no right to recover such charges.
If the society had adopted the Model Bye-laws then proper resolution should be passed wherein it should clearly be mentioned that the transfer charges shall not apply to transfer of share or interest of the transfer charges shall not apply to transfer of share or interest of the transferor in a capital / property of the society to the members of his family or to his nominees or to his legal heirs, successors and representatives.
The court in the case of Anju Premises Co-operative Society laid down that it is an established point that no society is allowed to go beyond the framework of its bye-laws. The court held that transfer charges cannot be taken in the guise of common amenities fund and as such the society has no right not to admit a member on the ground that transfer charges have bot been paid when no proper resolution has been passed and such the member stands admitted.
Thus it is very clear that a society would have no right not to admit the member when no proper resolution has been passed when it followed the old bye-laws and charge more than Rs. 25000/- as transfer fees when the society has adopted the model bye-laws.

30 thoughts on “Limit fixed for transfer fee in housing societies”
  1. Can Managing Committee charge an amount of Rs.25,000.00 towards major repair funds apart from Rs.25,000.00 as Transfer Fee from a purchaser of resale flat by passing resolution in its GB.?

    Kindly give reply to ghosalkar_san@rediffmail.com.  

  2. Who is responsible for the payment of transfer fee? The Transferor or the Transferee or both 50% each?

  3. Who is actually responsible to pay the transfer fee to the society. ? Is the seller or buyer or both 50% each ? this is always a confusion and gets into an argument. this normally does not discuss while fixing the price on resale….

  4. Can the managing committe charge penalty on transfer or membership fees not being paid simply because the transfer of share certificate procedure was not done. And the interest charged is @21% p.a. can this be charged without prior intimation? please reply

  5. Sir, My building chairman is asking Rs. 20,000/- from me and also from the purchaser (i.e. total 40,000/-) on the ground that you have to pay sinking fund for Rs. 20,000/- since due to default of few society members, building could not generate sinking fund. Also I have to contribute min. Rs. 30,000/- extra towars building repair fund which I am ready to pay. I argued that I am a regularly paying my monthly maintenance charges, I am not liable for payment extra Rs. 20,000/- but will pay max i.e. Rs. 25,000/- as per the Law towards transfer fees and sinking fund is always a part of the maintenance fund and since other members are not contrbuting for separate sinking fund, committee in no way should demand for separate sinking fund. Please advise how to take-up the matter with the commitee members. b/regards

  6. Transer Fees Rs 25000/- is per member or per unit /flat is being transferred? Tranaster fees is per unit and not per member.

  7. I am purchasing a resale flat but the society has not yet been formed as the builder is still building 2 wings in the premises. In this situation, should i be paying a transfer fee to the builder ? I have heard that they charge anywhere between Rs 100 to Rs 150 per sq.ft. Please usggest what needs to be done ?

  8. 1. Transfer fee is per flat and for every instance of transfer.
    2. It can be shaired between buyer and sailer 50% each.
    3. Builder is not entitled to charge in case of sale as there is no transfer as co-operative society is not yet formed.

  9. Earlier it was Rs 10,000/- as the transfer charges and one year before in the AGM, it was unanimously decided to pay Rs 40,000/- as transfer charges from the buyer and seller (a total of Rs 80,000) is earning by the society on a sale deed. The demand was Rs 50,000/- and on discussion the resolution passed with Rs 40,000/- . However, as it is already passed the resolution, can it be amended? If the maximum transfercharge is Rs 25,000/- as per the Rule, it is appropriate to the society to demand more from the members? I am expecting a respons from you via this site or through my email id.

  10. I am purchasing a resale flat but the society has not yet been formed and builder asking transfer fees for Rs. 25,000/- from me and Rs. 25,000/- from seller total of Rs. 50,000/- it is as per rul???

    Please reply on my email-id

  11. Dear Mr. Thankappan, The Society cannot charge anything more than Rs.25,000/-. This is as per the decision given by the Hon. Supreme Court. Just by passing a resolution the Society cannot LEAGALISE something which is ILLEAGAL. May be while passing such a resolution the Society was not aware of such a Supreme Court ruling but just Ignorance of the law does not entitle someone to violate it.

  12. I secretary of a soceity wants to know can we charges Rs.1000.00 to flat owners who have given their flat on leave license and also we take RS.25000.00 as transfer fees from the flat owners who sells his flat is it ok ?

  13. IF FLAT PURCHASED FROM BUILDER / DEVELOPER IN TDR BULDING , THEN TO DO BUYER HAVE TO PAY ANY SOCIETY CHARGES TO GET SHARE CERTIFICATE FROM SOCIETY ? SOCIETY DEMANDING RS.25000 OR MORE TO GIVE SHARE CERTIFICATE , IS THIS LEGALLLY RIGHT ? CAN SOCIETY ASK / DO SO IN SUCH CASE WHERE THERE IS NO TRANSFER , SALE OF FLAT FROM ONE EXISTING MEMBER TO NEW MEMBER/BUYER … ????? .. THANKSWITH REGARDS

  14. My wife is signing a gift deed agreement with her aunty. We are paying stamp duty and registration fee, are we supposed to pay transfer fee to the society as we are entering gift deed and not transfer by sale? Please clarify. Thank you.

  15. Dear sir, the managing commitee of my society are asing for transfer fee of 3% of the agreement amount which comes upto Rs. 1,26,000/- i:e 3% of 40 lakhs rs. dear sir according to the law the maximum transfer fee is rs. 25,000. is it so that if the society commitee has in their agm in 1986 decided to charge 3% of the agreementr amount and can they force me to pay the same on the basis of that? kindly reply to my question urgent as im going through this fight since quiet a long time i:e 6 months.

  16. Can Managing Committee charge an amount of Rs.25,000.00 towards major repair funds apart from Rs.25,000.00 as Transfer Fee from a purchaser of resale flat by passing resolution in its GB.?

  17. Hi,

    I had recently purchased the flat. Seller and Purchaser (myself) had already paid  Rs. 29000 as a transfer fees (shared 50-50) and submitted all transfer documents before the societies AGM. Recently AGM conducted and they had increased the rate and said to be applicable from 1st April,2012. Society wants Rs. 55000 as transfer fees (25000 as Muncipal Premium and balance 30000 as Repair fund).
    So I want to ask Whether society can impose/change its fees structure from AGM onwards or from financial year starting?
    Also Society can take “Major repair fund” on name of “transfer fees”?

  18. I am purchasing a resale flat but the society has not yet been formed as the builder is still building 2 wings in the premises. In this situation, should i be paying a transfer fee to the builder ? They are charging Rs 200 per sq.ft. Please usggest what needs to be done and what is as per law.

  19. hi,
    recently i do my gift deed from my uncle name to my father’s name

    so how much amount i paid to my society for as transfer fees.
    pls guide me

    regards
    rajesh

  20. sir, i am a resident of ahmedabad. i had recently entered into an greement to buy an independent house from its owner (under resale). the house is NOT in a co operative housing society. however, for providing common facilities such as water, cleanliness, security, maintenance of common space like garden etc, the members had formed a CO OP HOUSING S E R V I C E SOCIETY and got it registered. I am the first person buying the house under RESALE as all others are its original members. Now can this SERVICE SOCIETY demand transfer fee of Rs 3 lakhs from me or any other person buying a house from the existing owner. Your valuable guidance will help me in this respect.

  21. One of member is signing a gift deed agreement with his brother. We are paying stamp duty and registration fee, are we supposed to pay transfer fee to the society as we are entering gift deed and not transfer by sale? Please clarify. Thank you.

  22. sir, we are making a cooperative society and we have made 4 different size of flat as per our requirements . i believe there is no problem in having four different size of flats in one buildingnof 19 members in west bengal.
    Thank You

  23. Housing society is demanding rs.125000 as building development fund in addition to rs 25000 as transfer fund .otherwise they are not accepting my application for transfer of flat. I am from mumbai please reply and give the solution

    1. Any donation in whatever form is not allowed. The upper limit is 25000/- only. If you pay then it is not refunded.

  24. Kindly advise if a current member of a flat in a co-operative society is liable to pay transfer fees to the society and also stamp duty to the registrar if he/she buys another flat in the same building while retaining his/her exisiting flat.

  25. Society demand me 150000 for transfer flat..I have complain to deputy register pune..so Deputy register send letter to society to transfer my flat in take rs 25000 .or deputy register will take serious action…
    Society:nirmal nagar cooperative housing society .pune 411037..

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