Housing Society Problems and Solutions: Contributing Expenses for Major Repairs
Shirish Shanbhag 25 April 2024
Cooperative housing societies (CHS/Society) face ongoing maintenance needs, including structural repairs and external repainting. Housing societies, typically, collect funds through a repair fund included in the monthly maintenance bill to cover these costs.
 
If the estimated repair or repainting costs surpass the accumulated funds in the repair fund, the CHS can levy additional charges on its members. These charges should be proportional to the area of each flat to ensure fairness based on the relative benefit each member receives from the improvements.
 
The decision to levy additional charges necessitates a formal process. A general body meeting (GBM) should be convened where members can discuss the need for repairs, scrutinise quotes obtained from various contractors and reach a collective decision. Transparency throughout this process helps minimise disagreements among CHS members regarding the costs involved.
 
Unfortunately, some CHSs bypass these crucial steps, leading to potential conflicts amongst members about the legitimacy of the extra charges. Following established procedures fosters a more harmonious and efficient approach to managing CHS finances. This week, I will address one such problem, where a select group of members have refused to contribute towards expenses of repairs. 
 
Contributing Expenses for Major Repairs in Housing Society
 
Question: Our building is 35 years old and is in urgent need of repairs. But, around 30 out of 149 members are not willing to pay towards the repair expense. For us, redevelopment is not an option as per the prevalent laws. As a chairman, what action can I take? Can we insist under any law that these non-complying residents are obligated to contribute towards the repair charges?
 
Answer: Major repairs to the building are to be commenced only after a municipality-approved architect completes a structural audit of the building or by appointing a project management company (PMC). Once this audit is completed and an idea is given on the nature of repairs and the expenses to be incurred, the collection of repair funds can be debated upon (on the basis of the flat area), in the general body meeting of the Society.
 
The collection of funds for major repairs to the building has to be approved by the majority in such a meeting, where the amount and number of instalments would be calculated as per the area of the flat. The Society is empowered to take action under the Maharashtra Cooperative Societies (MCS) Act Section 154b-29 (earlier 101) against those members who do not pay their repair charges for three months. Such members would be considered defaulters and legal action can be taken against them. 
 
You can appoint an experienced lawyer for this work. However, remember that the lawyer's appointment, his remuneration and his action against the defaulting members need to be approved (by a majority) in a special GBM. These legal fees should be equally shared by all the flats, irrespective of their area. 
 
Applicability of Transfer Fee in a Redeveloped Flat
 
Question: Our building underwent redevelopment and the builder developed two separate wings. One is sold to new buyers, while the other wing has been occupied by a mix of existing owners and a few new purchasers. Now, it's already been two years, but the new owners have not been added as members of the Society. The managing committee is asking for Rs25,000 from all new buyers as a transfer fee towards membership. Kindly clarify if we are supposed to pay Rs25,000 for membership.
 
Answer: In a redeveloped building, saleable flat-owners who have an agreement directly with the builder will not be charged Rs25,000 to become members of the existing Society. However, if such saleable flats have been sold to a buyer, i.e., the existing flat-owner's sale deed is not with the builder but some other buyer, then the new owner will have to pay Rs25,000 transfer premium. 
 
In other words, during redevelopment, some original members may have also sold their flat and, instead of an agreement with the builder for the redeveloped flat, it would be a sale deed between the original member and the new buyer. In this case, to make the buyer a member of the Society, they would have to pay Rs25,000 as a transfer premium.
 
In some cases, you will find that the builder sold the flat to A; then A subsequently sold this flat to B; and further B sold the same flat to C. In such a case, for C to become a member of the Society, they will have to pay Rs50,000, which is twice the transfer premium (as the original flat was sold twice).
 
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
 
Going for Redevelopment when Flat Is Under Debt Recovery Tribunal
 
Question: I reside in a registered society located in Badlapur, Thane. We are planning to redevelop our Society, but the problem is that out of nine flats, two are under debt recovery tribunal (DRT) court. So, while seven members have agreed to redevelopment, there is a dispute over the remaining two flats. What should be done? Can you please advise? 
 
Answer: You have not mentioned in your query whether the conveyance deed of your housing society has been registered. If this has not been done, kindly do so immediately. 
 
With a copy of the conveyance deed and its index-2, apply at Talathi office to transfer the land's 7/12 extract and mutation entry in form-6, in your Society's name. Also, with a copy of the conveyance deed, apply to the city survey office to transfer the Society's property card in its name. 
 
If two flats cases are under DRT court, hire the services of an expert lawyer, to get an order from the court, granting you permission for redevelopment. The court will accordingly make both these flats 'agreement for permanent and alternate accommodation', and hold it in custody until the DRT cases are settled.
 
Repair of Water Filters in Housing Society
 
Question: I am a resident of a housing society at Rasapunja, Kolkata. The problem we, as residents, face is that we need clean, filtered, and quality drinking water. For the past year, the filter system has not been working. When this issue was raised to the executive body, they expressed their inability to repair it due to insufficient funds. So we have no other option except to use our personal water filters. Please guide on what the law suggests so we can put pressure on our executive body to repair filters.
 
Answer: The supply of water purifiers to each flat is not the responsibility of your cooperative housing society (CHS). However, once in a year, cleaning of overhead storage tanks is certainly their responsibility. If you are getting dirty water from the taps in your house, then you should file a complaint with your Society. If your Society is not cleaning the common water tanks, then you should escalate the complaint to the local municipal ward office.
 
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.)
 
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