Cooperative housing societies routinely deal with procedural and legal questions that sit at the intersection of property ownership, regulatory compliance and the powers of managing committees. Many disputes arise not from bad intent, but from uncertainty about what the law actually requires, and what a cooperative housing society (CHS/the Society) can or cannot insist upon.
This week, I will address three such situations that frequently trouble managing committees and their members. These include the correct process for changing the Society records when a flat originally purchased in the name of a proprietorship firm is sought to be reflected in the individual owner’s name; the procedural hurdles societies face while adopting the model bye-laws and preparing for redevelopment and whether a CHS’ consent is necessary when an independently owned row house is proposed to be used for a professional activity.
Changing Maintenance Bills from Proprietorship Firm Name to Individual Owner
Question: I am the treasurer of a CHS and my query is regarding the issuance of maintenance bills. In our Society, one member had purchased a residential flat (the BMC property tax annexure shows it as residential and a family member is staying there) in the name of a sole proprietorship firm, as mentioned in the agreement executed with the builder about 25 years ago.
She has now submitted an affidavit on ₹500 stamp paper stating that the business has been shut down, the firm no longer exists and the relevant documents of the proprietorship have been cancelled. She now wants the maintenance bill to be issued in her individual name instead of the company name, in which the Society has been issuing bills till date. Can we do this? What is the procedure?
Answer: If the flat is in the name of a proprietorship firm and the said proprietorship firm has been dissolved and it is established that there are no pending income-tax returns of that firm, then the proprietorship firm should transfer the flat by executing a registered gift deed in favour of the proprietor.
Thereafter, the Society can transfer the flat's share certificate in the name of the proprietor and issue maintenance bills in the owner’s name. For this purpose, the municipal property tax record of the flat should also be transferred in the name of the owner through the assistant assessor and collector of the concerned municipal ward office.
Adoption of Model Bye-laws and Registrar’s Procedural Requirements
Question: Ours is a CHS in Borivali West. We made an application to the deputy registrar for cooperative societies in Kandivali east, complete in all respects and following due procedure, seeking approval for adoption of the new model bye-laws. However, the deputy registrar is refusing to process the application and is raising multiple queries. The main objection is that we must first apply online and then resubmit the physical application along with the fee receipt and upload the audited accounts.
We are not aware of any website where one has to apply online for adoption of bye-laws. The staff at the deputy registrar’s office is also not being helpful. Please guide us urgently, as we have been told that the redevelopment of the Society cannot proceed without the adoption of the bye-laws.
Answer: Kindly visit the Mumbai District Co-operative Housing Federation (MDCHF) at 103, Vikas Premises, 1st Floor, 11, NGN Vaidya Marg, Fort, Mumbai, to understand the procedure for adopting the model bye-laws.
It appears that your Society may not have its annual accounts audited by a government-approved auditor. After auditing, these accounts are required to be uploaded on the deputy registrar’s online portal and the prescribed fees must be paid online. If your Society is not familiar with the process of uploading audited accounts, you may seek guidance from the MDCHF or engage a government-approved auditor through them.
Before proceeding with redevelopment, the adoption of the new bye-laws is mandatory. Further, as a preliminary requirement for redevelopment, the Society must have conveyance of the building and land in its name. If conveyance has not been executed, the Society should apply for deemed conveyance. Without conveyance of the Society’s building and land, redevelopment cannot be undertaken. Therefore, ensure that conveyance is completed before proceeding with redevelopment.
Can a Society Recover Legal Advice Costs from an Individual Member?
Question: Is a no-objection certificate (NOC) from the cooperative housing society mandatory to sell an independent row house for opening a veterinary clinic? The row house is completely independent, including water connection and parking, and has separate road access.
Answer: For an independent bungalow or row-house type building with separate access, no permission from the Society is required to open a veterinary clinic. This is especially so when the property has open space around it and independent facilities.
You should apply to the municipal ward office for the required permissions. If an NOC from the housing society is required, the licensing authority will request it. If such an NOC is demanded, explain to the authority how the property is completely independent. In all probability, permission will be granted. If permission is refused, ask the authority to provide the refusal in writing. After receiving the written refusal, you may file a complaint with the municipal commissioner.
If you are in Mumbai, you may visit Moneylife Foundation’s office on Wednesdays between 3pm and 6pm for free guidance from an expert, after fixing an appointment by calling (022) 35131664 or +91 7045156415 during business hours.
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.)
