Transfer premium: how much can a society charge?
When a flat is sold, the society may charge a transfer premium for transferring the membership. Government has fixed the maximum.
Key points
- A housing society may charge a transfer premium only up to the limit fixed by the Government Resolution of 09.08.2001: ₹25,000 in municipal corporation and development authority areas, and less in smaller towns and villages.
- The limit applies whatever the society’s resolutions say; a higher amount cannot be recovered.
- The limit cannot be bypassed by calling the extra amount a “donation”, “development fund” or similar.
What a transfer premium is
When a member sells a flat, the purchaser applies to the society for membership and for the transfer of the seller’s shares and interest in the property. Many societies charge a premium for this transfer. Without a limit, some societies demanded very large amounts, which is why the State fixed a ceiling.
The limit
The Government Resolution of 09.08.2001 lets the general body fix the transfer premium, but caps it according to where the society is: ₹25,000 in municipal corporation and development authority areas; ₹20,000, ₹15,000 and ₹10,000 in “A”, “B” and “C” class municipal councils; and ₹5,000 in gram panchayat areas. A society’s bye-laws and resolutions must stay within this limit. Read the full explanation of the GR.
Other demands at the time of transfer
Societies sometimes ask for further amounts at the time of a transfer, described as donations or contributions to a fund. Where the payment is a condition of the transfer, it is in substance a premium and is subject to the same limit. Regular charges that every member pays, and any arrears on the flat, are different and may be recovered in the ordinary way.
If the society demands more
The member or purchaser can write to the society pointing to the GR and, if the society persists, approach the Registrar of Co-operative Societies. Refusal to admit a purchaser for not paying an amount above the limit can be challenged.
Documents
This guide explains the general position in Maharashtra. A society’s bye-laws and the facts of a case can change the answer. Nothing here is legal advice.
Have a question about your society?
Write to the office with a brief description of the matter. Meetings are by prior appointment.