Cooperative housing society (CHS/the Society) members are often confronted with decisions that raise questions about fairness, legality and the limits of a Society’s authority. Whether it is the imposition of additional charges on tenants, the recovery of fees on behalf of a builder or confusion arising from nominations and legal ownership, such issues can lead to disputes within housing societies. Understanding what is permissible under the bye-laws and where to seek remedies is essential for protecting members’ rights. This week’s queries address these concerns and outline the appropriate course of action in each case.
High Charges on Tenants and Security Deposits: Are Such Demands Legal?
Question: Our Society has recently started imposing charges of ₹30,000 to ₹45,000 per year for clubhouse use for tenants, even after charging the owner non-occupancy charges. The Society has also started collecting a ₹1 lakh security deposit for any interior work. I wish to know whether these charges and deposit demands are legal.
Answer: These charges may not be justified if they are not in accordance with the bye-laws or approved by the general body.
Check whether your Society charges membership fees for using the clubhouse facility from owner-members as well. If not, then it may not be able to levy charges on tenants.
Further, as per the Maharashtra government resolution no.CHS-1064/15165/Sr. No. 317/14-C, Mumbai-32, dated 1 August 2001, the Society can charge only 10% of the monthly maintenance charges (excluding municipal property taxes) as non-occupancy charges for keeping a person on a leave & licence basis. Service charges in the monthly maintenance bill, however, will be charged equally to all.
While not explicitly detailed in the model bye-laws, CHS may sometimes demand a refundable security deposit for carrying out interior or similar repairing or modification work inside the flat/unit. The purpose is to cover common-area wear and tear resulting from work, in this case, the interior work.
Under bye-law no. 174(A)(xii) (misappropriation/misapplication of the funds of the Society), make a complaint against your society to the deputy registrar (DR) of cooperative societies, with proper proof, such as the Society’s notice demanding such amounts. You have to be very persuasive when making a complaint to the DR. If you do not receive a reply within 15 days, then file an RTI application with the public information officer (PIO) of the DR, seeking information on the action taken on your complaint. If no action is taken within one month, you may make a complaint against the DR to the district deputy registrar for inaction.
Simultaneously, you may file a Lokshahi Din complaint with the district collector for inaction on your complaint.
If you have already paid these charges and wish to recover them, you may, under bye-law no. 174(B)(ix) (excess recovery of dues), make a complaint against the society in the cooperative court. As you are aware of these excess charges, you need not take the services of an advocate for making complaints.
Can a Society Recover Clubhouse Charges on Behalf of a Builder?
Question: Our Society convened a special general meeting (SGM) in which two resolutions were passed. First, to collect clubhouse expenses from members and pay the builder who owns and runs the clubhouse. All members have to pay such charges, which are included in the bill.
Second, such charges will be shown under maintenance charges. There are separate agreements between each member and the builder regarding membership and maintenance charges.
I objected to both resolutions on the grounds that the Society cannot collect such charges and pay them to the builder, as they fall outside the Society's jurisdiction. Further, it cannot be shown under maintenance charges because the clubhouse is owned by the builder.
However, the majority of members have passed the resolution and the managing committee has decided to implement it. Please advise.
Answer: Clubhouse charges generally cannot be recovered from Society members if the clubhouse is owned by the builder. If your housing Society recovers such charges, then affected members may, under bye-law no. 174(B)(ix), make a complaint in the cooperative court against the Society, by making the owner of the clubhouse a party to the complaint. Kindly hire the services of a competent lawyer.
Nomination vs Legal Ownership: Validity of Membership and Committee Election
Question: In our Society, a flat originally belonged to a member who had nominated her son. After her death, her Will has not yet been probated due to a family dispute.
The son later nominated his wife, but he also passed away. His wife then nominated her son, made him an associate member and he has since been elected to the managing committee.
The current managing committee has now realised that these successive nominations may not be legally valid, and consequently, the associate membership and election may also be questionable. What is the best course of action in such a situation?
Answer: All procedures followed by the nominees and the Society are wrong. As per the law, only an owner-member of the CHS can nominate one or more nominees. Further, a nominee does not become the absolute owner of the property merely because his name is recorded. Since the Will is not yet probated (it opens succession in favour of all legal heirs under the applicable personal law), the son of the original owner did not become the owner and, thus, cannot nominate another person (his wife). Subsequently, the son’s wife cannot nominate her son, since she is not legally the owner.
If the flat is in Mumbai, kindly file a testamentary petition in the High Court to transfer the flat to the legal owner. If the flat is outside Mumbai, then file a testamentary petition in the district court. Until ownership is legally established, such nominations and consequential rights may be open to challenge. Kindly engage a competent lawyer for this work.
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.)
