Housing Society Problems & Solutions: Appointment of an Administrator by Deputy Registrar and Charges for a Gift Deed
Shirish Shanbhag 14 September 2023
Generally, the deputy registrar of cooperative societies (Dy RCS) appoints an administrator on receiving complaints from members of the cooperative housing society (CHS), if he finds that it is a fit case to expel the present managing committee. While the  DtyRCS has the power to dissolve managing committees and appoint an interim administrator, it uses such powers sparingly and only to bring erring societies and their committees to book.
 
Being an ad hoc appointee, the powers of an administrator are quite restricted. Legally speaking, the administrator replaces the managing committee and, therefore, the powers of an administrator under no circumstances can exceed those prescribed to a managing committee.
 
Furthermore, since an administrator is appointed in the place of a delinquent committee, his manner of functioning should be exemplary such that the Society, its members and the incoming committee can observe good governance. As part of the minimum requirement of such good governance, the administrator should disclose all details of income and expenditure and communicate the reasoning behind any decisions taken to all members. Failure to do so gives the residing members sufficient cause to raise a complaint with the deputy registrar. 
 
This week, I will address two cases involving administrators, one where the appointed person has illegally transferred flats to new members and another where a frivolous complaint by a resident may cause problems for the present managing committee. We will also look at the charges applicable for a gift deed and the penalties applicable for placing a shoe rack in the common area of the Society. 
 
Illegal Transfer of Flats by an Administrator Appointed by the Deputy Registrar
 
Question: We have an administrator placed in our CHS. He has transferred three flats to new members, but old members had massive amounts outstanding. He claims transfer can happen without collection or clearance of pending dues. He has also stated that the collection of dues is not his responsibility. Please advise om how we can reverse the transfers and collect pending dues. 
 
Answer: The administrator has no right to transfer the flat of a defaulting member to a new member without verification or recovery of dues. Make a complaint against your Society's administrator to the deputy registrar of cooperative societies of your area for transferring the flats without confirming clearance of pending dues. 
 
An administrator is generally placed in your Society to correct wrongs of the previous managing committee which, in your case, seems to be the collection of dues from defaulting members. After rectifying the errors of the previous managing committee, the administrator is supposed to call for an election to form a new committee. It seems that this has also not occurred in your Society. 
 
However, you have a valid point to file a complaint against the administrator and to seek corrective action from the deputy registrar. Kindly do so.
 
Frivolous Complaint by Defaulter to Deputy Registrar
 
Question: One of the members residing in our Society has filed a complaint with the Dy RCS claiming that the annual general meeting (AGM) of 2008 and 2009 was illegal and that the present committee should be dismissed and debarred from contesting elections for five years. No one from the 2008 managing committee resides in our Society, as they have all relocated elsewhere. The complainant is a defaulter and claims that due to the irregularity of the 2008 AGM, all outstanding should be nullified. Please advise. 
 
Answer: In your case, the deputy registrar will appoint an authorised officer (administrator) to your Society to verify the old records of your Society for the years 2008 and 2009. This administrator will verify the genuineness of the complaint and suggest appropriate action.
 
The present managing committee does not need to worry about the complaint until the Dy RCS issues a formal letter. Until the deputy registrar replies to the complaint with either the appointment of an administrator or otherwise, you need not worry.
 
NOTE
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Charges Applicable for a Gift Deed
 
Question: I have one flat registered under joint ownership with my mother. I now want to add my wife's name to the flat so that she can become a member. Would a gift deed be a good option for this purpose? What would be the cost of getting a gift deed done in Mumbai?
 
Answer: To add your wife's name to a flat jointly owned by you and your mother, both of you should make a gift deed and give at least 10% of the value of said flat to your wife.
 
You will have to pay 3% of the market value of the share percentage you gift to your wife as the stamp duty charges and 1% of its share as registration fees. For example, if you offer 10% of the market value of the flat to your wife and assuming that the government's ready reckoner market value of your flat is Rs1 crore, then you would essentially be gifting Rs10 lakh market value of your flat to your wife. Then, at 3% of Rs10 lakh, you have to pay Rs30,000 as stamp duty and 1% of Rs10 lakh, Rs10,000 as registration fee on the gift deed.
 
With a copy of the gift deed and its index-2 and by filling the form of appendix-5 in the cooperative housing society byelaws , your wife can become the co-owner and co-member of the flat.  
 
Shoe Racks Placed in Immediate Common Area Outside of Flat
 
Question: I purchased a flat in 2008 and taken possession in 2014. In 2018, we had installed a wooden shoe rack outside of our flat and at the time, the Society did not object to the same. A year later, the Society issued a notice that all shoe racks were to be removed from the common area on each floor.
 
Unfortunately, our shoe rack is part of the wooden work that we had carried out on our exterior wall surrounding the entrance door. Since it's affixed to the wooden framework, removing it now would be difficult and would adversely affect the look of our entrance area. Still, we had agreed to compromise, provided the Society compensated us for replacing the damaged sunmica in the area of the removed shoe rack. 
 
But the Society is now threatening us with fines. The shoe rack is small and does not obstruct our neighbours or anyone passing by. What are our legal rights in this case?
 
Answer: Keeping any article in Society's common area is a breach of bye-law nos. 165 and 169(a). Under bye-law No. 165(a), you can be levied an annual fine of Rs5,000 for keeping the shoe rack in the Society's common area. Furthermore, for not removing it, the Society can fine you up to five times the monthly maintenance until it is removed. These two fines should first be approved and passed in the AGM or SGM of the Society under the bye-law No.165(b).
 
Your Society's managing committee is right in asking you to remove your shoe rack from the common area of your Society and for its removal, you cannot claim any compensation from them.
 
Still, if you feel that the shoe rack is not causing any obstruction to the neighbouring residents, you may write a complaint to the deputy registrar of cooperative societies, under Bye-law No. 174(A)(xxii), asking him to direct your Society's managing committee accordingly. Do note that this is only possible after taking signatures from other flat-owners, that the shoe rack is not obstructing their free movement and that they have on objection to it being kept outside your flat.
 
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, 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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