Housing societies often face complex legal and administrative challenges, ranging from property ownership documentation to society elections and maintenance cost allocations. Many of these issues stem from unclear regulations, differing member opinions and procedural hurdles. This week, I will address three pressing concerns raised by members of the cooperative housing society (CHS/the Society).
First, I will explain the importance of updating the property card after obtaining the deemed conveyance. Many societies mistakenly believe that conveyance alone secures ownership, but failure to update the property card can lead to legal and financial complications.
Next, I will clarify the election process for key office bearers in cooperative housing societies. With large societies having hundreds of members, concerns over indirect elections and limited committee representation often arise. Can societies opt for direct elections or increase the number of committee members to prevent manipulation? I will address these concerns and provide possible solutions.
Finally, I will tackle the debate over generator expenses—should they be included in the electricity bill or categorised under building repairs and maintenance? Understanding how such costs should be allocated can prevent disputes and ensure transparency in financial management.
Change of Name on Property Card
Question: We have obtained deemed conveyance for our Society. We seek clarification on the following:
1. Is it necessary to update the property card in the Society's name?
2. If not, what are the disadvantages of not doing so?
3. If yes, what are the advantages of updating it?
4. Can the cost of updating the property card be collected based on square footage or equally among members? If yes, why?
Please guide us on the best course of action.
Answer: Obtaining deemed conveyance alone is insufficient, unless the Society's name is officially entered as the holder on the property card. Below are the responses to your queries:
1. Yes, it is necessary to update the property card in the Society's name.
2. Disadvantages of not updating the property card:
- The property will continue to remain in the old owner's name.
- Property tax liabilities, as well as any existing or future FSI (floor space index) benefits, will accrue to the old owner and title holder, not the Society.
3. Advantages of updating the property card:
- The Society will have a clear legal title over the land.
- It can take action against defaulting members or occupiers more effectively.
- It can initiate legal proceedings in its corporate name against third parties.
- The Society will be in a stronger position for redevelopment in the future.
4. Cost-sharing for updating the property card:
The mode of cost distribution (either per square foot or equally among members) is a policy decision to be taken in the annual general body meeting (AGM) or special general body meeting (SGBM), as applicable.
Election of Chairman and Secretary of Housing Society
Question: We have purchased a new flat in a gated community and, as per the law, all flat-owners are required to form a CHS for its maintenance. An ad hoc committee was formed, which then registered the Society with the office of the deputy registrar of cooperative societies (DRCS) in the city.
We have been informed that the Society must elect a minimum number of managing committee members, who will then elect the chairman and secretary through an indirect election within 30 days. However, since the managing committee consists of only 16 members out of a total of 600 flat-owners, a large group of owners believes that the chairman and secretary should be elected directly to prevent any manipulation.
Their concern is that a small group of 16 members can be easily influenced, leading to the same individuals being elected as chairman and secretary every year without proper accountability, given the Society's funds. The DRCS has stated that direct elections for the chairman and secretary are not legally permitted. However, many owners suspect he is colluding with the ad hoc committee to limit the management committee to 16 members.
We seek clarification on the following:
A) Can the election of the chairman and secretary be conducted directly by all members as per law?
B) If direct elections are not allowed, can the number of managing committee members be increased to 200, making it less susceptible to manipulation?
C) Given the current stalemate, what is the best way to conduct the Society's election? The DRCS has warned that if elections are not conducted within 30 days, the Society will be dissolved, and a new one will have to be formed from scratch.
Answer: With the given facts, my replies to your queries are as follows:
A) No, the election of the chairman and secretary cannot be done directly by all members as per law.
B) No. The number of managing committee members cannot be increased to 200. In Maharashtra, the number of managing committee members for a CHS with more than 501 members is fixed at 19.
C) You must proceed with the election as per the existing legal framework.
If the Society consists of multiple buildings or wings, the residents of each wing or group of buildings may consider submitting an independent application to form a separate Society. If no legal entity exists yet, all such wings or buildings can, by mutual consent, form a new Society with a notional demarcation of land. For larger land parcels, the formation of a federation of societies can be considered to manage common interests effectively.
Clarity over Inclusion of Generator Charges in Electricity Bill
Question: Should expenses on the generator be considered as part of the electricity bill (service charges) or as building repair and maintenance charges in the routine maintenance bills? Most of our members are of the opinion that it should be included in the electricity bill but I personally feel that it is part of the building repair and maintenance. Please provide some clarity.
Answer: In light of the facts presented, your viewpoint—that generator expenses should not be included in the electricity bill for common areas—is valid. However, these expenses should not be categorised under building repairs and maintenance either.
Instead, they should be documented separately, similar to the expenses for repairing and maintaining lifts. The costs of running the generator, like those of operating lifts, should be shared equally among all members, regardless of the area they occupy.
This allocation should be governed by bye-law 64, sub-clause (xvii), in conjunction with bye-law 65(m) of the Model Bye-laws of Cooperative Housing Societies (as amended up to December 2019).
NOTE
We will not be answering queries posted in the comments. Only questions sent through the Moneylife Foundation's Legal Helpline will be answered. If you want to seek guidance or ask questions to Mr Shanbhag, kindly send it through Moneylife Foundation's Free Legal Helpline. Here is the link: https://www.moneylife.in/lrc.html#ask-question
Disclaimer: The guidance provided in these columns and on our Legal Helpline is on the sole basis of the facts provided by the reader/questioner and does not amount to formal legal advice in any form whatsoever.
(Shirish Shanbhag has an MSc in Organic Chemistry, a Diploma in Higher Education, and a Diploma in French and has completed his LL.B. in first class in 2021. Before his retirement, he was a junior college teacher at Patkar College from July 1980 to May 2012, teaching theoretical and practical chemistry. Post-retirement in 2012, he started providing guidance and counselling to people on several issues, specifically focusing on cooperative housing society-related matters. He has over 30 years of hands-on experience in all matters about housing societies and can provide out-of-box solutions for any practical issue.)
