Rajiv Shah
I regularly follow your blog and they are very informative. Really appreciate your help. Request your advice on the following as I am about to purchase a resale flat in Pune. She is the first owner.
1) She purchased the flat from builder and the sale deed was done in Dec 2012.
2) She got the possession in August 2013 and staying there since then.
3) The building completion certificate was received in April 2014.
4) The housing society was registered in June 2014.
5) The share certificates have come just this month i.e. Feb 2015.
6) The society is ready to give NOC for this resale by accepting transfer charges.
I read that as per MCS act 29(2)(a), the member cannot transfer his share/interest in the property before one year. So will this rule apply in my case? Because she is the first owner and she has held this flat for 2 years and this is going to be first ‘transfer’ of flat. So will there be any problem in this transaction? Can the seller sell the flat? Can I get the share certificate transferred to my name immediately? Or will I have to wait for one year?
Please help ASAP. Thanks a lot in advance for your kind support.
I C Naik
Your apprehensions are absolutely correct. There is a statutory ban on transferring (i) any share or (ii) interest in the capital or property of any society during the first year of acquisition of such (i) share or (ii) interest by a member of a cooperative society by virtue of Section 29(2)(a) of the M C S Act 1960. This restriction was made part of the Model Bye-laws of the cooperative housing societies for the first time in the Model 2001 approved by the CC & RCS on July 2, 2001 [Bye-Law No 38(c)].
The managing committee s used to overlook transfers in violation of this statutory provision with impunity. Housing societies having Bye-Laws registered as per Model 2001 or 2009 are conscious of this provision and hold back conferring membership in such cases though it may happen that after expiry of one year of the date of purchase of the flat the transfer of the flat was not hit by this restriction, though such deals were not totally risks free as prior approval of the managing committee was necessary for such transfer. In Bye-Law No 43 about sub-letting of the flat there is a clause 2 and a sub-clause (d) therein reading as under:
“(d). Non Occupancy Charges shall not be levied to the flat purchaser who is intending to become a member and who submits the documentary evidence thereof.”
This clause seem to suggest that a Purchaser of the flat after expiry of one year from date of purchase of the flat from a builder (as that does not hold the seller of the flat as circumventing the ban) has to wait for completion of one year before he can be admitted to membership or in other words the seller continues as a member and the purchaser is a deemed sub-lettee but not liable to extra burden of a NOC as he intends to become a member and the documentary evidence being the purchase agreement .
As such exemption is part of the bye laws the same binds the managing committee also. It also appears necessary to have a care taker agreement for the flat as without that the managing committee cannot let purchaser occupy the flat. It cannot be ruled out that a difficult Committee may refuse to accept this version of interpretation of clause (d) as it looks like the CC & RCS has devised a mechanism to help out genuine user of a flat. At the same time one can politely request the managing committee for their version of the genesis of this clause.