Housing Society Problems and Solutions: Transfer Charges for Sale of Flat in Redeveloped Building
Shirish Shanbhag 05 July 2024
Home-buyers may be required to pay transfer charges or collector's fees if the cooperative housing society (CHS/Society) is situated on land owned by the district collector. The obligation to pay these charges varies based on factors such as the city or state where the property is located. The law does not clearly specify whether the buyer or the seller should be responsible for these charges. Typically, the payment is settled through mutual agreement between both parties.
 
This week, I will address one case where the builder sold a few flats in a redeveloped building but failed to follow procedures to make them new members of Society. I will clarify how flat transfer charges are to be charged and explain the maintenance charges to be levied on flats owned by the builder. We will also look at the process of relinquishing ownership in a jointly owned flat in favour of one of the owners when the building is about to be redeveloped.  
 
Flat Transfer Charges in a Redeveloped Building
 
Question: Our building was redeveloped and the builder has 50 flats, out of which he has sold 30. He has not disclosed this to the Society and has not followed any procedures for making new members by paying Rs25,000 as joining fees. He wants to maintain all our redeveloped flats and his sold and unsold ones. Please advise whether the Society must demand immediate membership of sold flat-owners or whether we are to wait until the builder sells all 50 flats. 
 
Answer: For all unsold flats, the Society should make the builder a temporary member by giving him a share certificate of 10 shares, which he will retain until the last flat is sold. At such a time, the Society will take the builder's share certificate and return his share capital of Rs500. Society will charge maintenance charges for all his saleable flats based on each flat.
 
For example, if the builder has 10 unsold flats and Society charges Rs5,000 per flat as maintenance, then the Society will bill the builder Rs50,000 per month for his 10 unsold flats. As the flats are sold, each saleable flat-owner will be made a member of the Society. If the flat's sale deed is with the builder, Society will not charge Rs25,000 as transfer charges to such a flat-owner. However, if the new flat is being resold, then for every resale agreement, the Society will charge Rs25,000 for each sale from the builder to the new buyer. 
 
It may happen that a new buyer may re-sell his flat to the next buyer, and between builder and applicant for membership, there are two sale deeds, one between builder and first buyer and the second between the first buyer and second buyer of that flat. In such a sale, when the second buyer comes to the Society for his membership, the Society will take Rs25,000 x 2 = Rs50,000 to make him a member.
 
Relinquishing Ownership in a (Jointly Owned) Redeveloped Flat 
 
Question:  My youngest brother stays alone in a cooperative housing society -CHS. The flat is jointly owned by him, another brother and me. The share certificate has all our names, with the name of the youngest brother being first and he is recorded as a member of the Society. The Society has completed 79A and is now going for redevelopment. 
 
During the routine visit from the deputy registrar's office, my younger brother represented all of us, and a development agreement is being prepared. The Society's secretary and the managing committee say the transit rent, corpus fund, and transportation will be paid to all three of us equally. I genuinely feel this is unjust to my youngest brother, who actually resides there. He will have to vacate and hand over the flat and look for temporary accommodation. The rest of us have our own independent flats and do not need to look for rental accommodation. Hence, he should get the full rent. Please advise.
 
Answer:  If the flat is owned by three brothers, for the sake of convenience, say A, B and C, and B and C have their own separate flats to live in when the concerned building goes into redevelopment, then all of you, together, should give an 'affidavit-cum-indemnity bond' to the Society. This should be on a Rs600 non-judicial stamp paper, duly registered with the sub-registrar of assurances, stating that B and C have no objection in giving the full rent for alternate rental accommodation and shifting charges to their brother A. 
 
If you would also like to give the corpus fund to your youngest brother, kindly state it in the  'affidavit-cum-indemnity bond'. Further, if B and C want to relinquish their rights to the redeveloped flat, then mention the same in the affidavit so that the builder only does a permanent alternate accommodation agreement (PAAA) with only your youngest brother. On the basis of such a document, the builder would then give rent, transport charges and corpus fund to your youngest brother.
 
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
 
Issues in Amalgamated Apartment Complex
 
Question: Our apartment complex has five buildings, built around 30 years ago by the builder. He has completed the deed of the apartment and all the apartment owners have their own documents with them. There were five plots that were amalgamated, and apartments were built. The permission from Pune municipal town planning for amalgamation is also in place along with the commencement certificate. The builder has not visited the city survey office to amend the records. Now, flat owners in the apartment complex want property cards. Can you please advise on the process?
 
Answer: Kindly make an application at city survey office to enter the names of apartment-owners in the property card of the apartment's land. To find out the location of your city survey office, you can either visit  the district collector's office or do a simple online search. 
 
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.)
Comments
asphatak55
1 week ago
For the question that appeared in serial no one dealing with flat transfer charges, the applicant had not disclosed the terms and conditions of RDA. As such, in the given circumstances, I don't think it would be proper to issue a share certificate to the builder
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