The share certificate is a legal document issued by the cooperative housing society (CHS/Society), to a member who has purchased a flat in the Society. It represents the member’s ownership stake or share in the Society and is an essential piece of documentation in the context of housing societies. It essentially certifies that a member holds certain number of shares in the Society, corresponding to their ownership interest. This certificate is proof of membership, ownership and financial participation in the CHS.
It is essential for any future sale or transfer of another housing unit within the Society, as potential buyers will require this certificate as proof of ownership. It will also be needed for all financial transactions related to the flat or unit such as applying for loans. When a buyer purchases a flat from an existing member, the Society has to initiate process of transferring the share certificate in the new owner’s name, provided all procedures have been complied with.
However, there is a provision in the bye-laws which State that a share certificate of a new member cannot be transferred to the buyer, if the transaction has occurred within a year of the seller’s membership.
This week, I will address and clarify the doubts on this issue. We will also take a look at maintenance charges for a terrace-attached flat and a housing society’s refusal to accept membership.
Transfer of New Member’s Share Certificate within a Year
Question: I am one of the committee members in my Society. We have transferred five shares in the name of one member, who hold an office premises. This new member as wants to sell the office premises and wants a no objection certificate (NOC) from the managing committee. I was of the impression that shares once transferred to a new member cannot be transferred again within a year. In our case, we can only transfer after March 2025. Please advise whether this understanding is correct.
Can the committee issue a NOC without any rider, i. e., the shares cannot be transferred before a given date? If the member sells the premises and files all transfer papers, then can the committee hold the transfer for a year (or until the time when the shares are eligible for transfer)?
Answer: If circumstances force some flat or shop owner in a CHS to sell it within a year of acquiring membership, then the Society can give such a member the NOC clearly mentioning that the transfer of share certificate would be carried out a year later.
More specifically, the NOC should mention the date of transfer in the seller’s name and also the date (a year later) on which the Society will initiate transfer to the buyer’s name.
Calculation of Maintenance Charges for Terrace-attached Flats
Question: In our Society we have attached open terrace flats. There is a dispute between the committee and the owner regarding maintenance charges. The managing committee has been charging full maintenance for the attached open terrace and flat. The dispute occurred on the point of whether maintenance should be charged on the attached terrace along with the flat. Please advise.
Answer: Only some items as stated below, are charges which are calculated on the basis of area of the flat. When considering the area of an attached-terrace to a flat, the area of the terrace needs to be taken into consideration.
Under bye-law 67(a),
(i) property tax
(iii) expenses on repairs and maintenance of the Society’s building
(v) sinking fund
(xi) building insurance charges
(xii) lease rent for the building, and
(xiii) non-agricultural land charges
are to be calculated on the basis of the area of each flat. It only these six headings where such a calculation is to be made. For the terrace flat, these items would be calculated including the terrace area.
NOTE
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Society Refusing to Accept Membership
Question: The Society has not accepted us as a member even after an order from the sub-registrar office. Instead, they keep asking for documents over and again. Also, the Society has levied false dues on my flat, for which I have asked them to furnish all charges on a month-to-month basis. They have yet to comply and since I am not clear about which charges are genuine. I have stopped paying maintenance dues, as they have not accepted me as a member and have not issued a maintenance bill in my name. Can you please suggest how I can resolve this issue.
Answer: For the Society not making you member even after deputy registrar's order, file a complaint with the registrar under bye-law no. 174(A)(iii), with a copy of all the documents and forms that you have submitted to the Society. The deputy registrar will send his officer to the Society to ensure that you are given a share certificate in your name.
For imposing wrong dues on your flat, you should make a separate complaint to the deputy registrar, under bye-law no. 174(A)(xxii).
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.)
