A member died without a nomination: who gets the flat?

Nomination and ownership are different things

A member of a housing society can nominate one or more persons to whom his shares and interest in the society should be transferred on his death. People often assume that the nominee becomes the owner. That is not the law. Since the 2019 amendment, Section 154B-13 of the Maharashtra Co-operative Societies Act says that on a member’s death the society transfers the share and interest on the basis of a will or other testamentary document, a succession certificate, a legal heirship certificate or a family arrangement executed by the persons entitled to inherit — or to the nominee. A nominee is admitted only as a provisional member until the legal heirs, or the person entitled under the will, are admitted. The model bye-laws say the same: a nominee holds the flat as a kind of trustee until all legal heirs are recorded, and cannot create third-party rights in it (Bye-law 34).

The Supreme Court made the same distinction in Indrani Wahi v. Registrar of Co-operative Societies (2016): the society must act on a valid nomination, but that does not decide title among the heirs.

When there is no nomination

Bye-law 35 of the 2014 model bye-laws lays down what the society must do:

1. Public notice within six months. Within six months of receiving written intimation of the member’s death, the society displays a public notice, in the prescribed form, on its notice board, inviting claims or objections to the proposed transfer. It also publishes the notice in at least two local newspapers with wide circulation. The cost is recovered from the value of the deceased member’s shares and interest.
2. Enquiry and decision. After considering the claims and objections received, and making such enquiry as it thinks fit, the committee decides who, in its opinion, is the heir or legal representative of the deceased member.
3. Admission on an indemnity bond. That person, if otherwise eligible, applies for membership in the prescribed form, with an indemnity bond protecting the society against any later claim to the shares and interest.
4. Several heirs. If there are several claimants, the society asks them to file an affidavit naming the one who should become the member; that person files the indemnity bond.
5. No agreement. If the committee cannot decide who the heir is, or the heirs cannot agree, the committee can ask them to produce a succession certificate from a competent court.

Section 154B-13 adds that where no one has been nominated, the society may admit as a provisional member the person who appears to the committee to be the heir or legal representative, so that the flat is not left without a member while things are sorted out.

If nobody comes forward at all, the bye-law provides that the deceased member’s shares and interest vest in the society. In practice this is rare, but it is one more reason not to delay.

What the society can — and cannot — insist on

• The society can ask for the death certificate, proof of relationship, the claimants’ affidavits, the indemnity bond, and the society’s dues to be cleared. It has a charge on the deceased member’s share and interest for dues (Section 154B-14).
• Where the heirs are agreed, the committee can decide on the basis of its own enquiry and the affidavits; a court certificate is the fallback when it cannot decide or the heirs disagree, not the first demand in every case.
• The society does not decide disputes about who owns the flat. A transfer of membership does not take away any heir’s rights under succession law, and the disputing heirs’ remedy is in the civil court.

What the family should do

1. Inform the society in writing with a copy of the death certificate, and ask whether a nomination is on record.
2. Talk to the other heirs. Agree who will become the member. Each heir who is giving up his claim in favour of another should give an affidavit or no-objection; a registered family arrangement or release deed is the cleaner way to settle the title itself.
3. Apply for membership in the prescribed form after the notice period, with the affidavits and the indemnity bond, and clear any dues.
4. If the heirs cannot agree, apply to the court for a succession certificate, or probate if there is a will that requires it, and give it to the society.
5. If the society sits on the application, a membership application must be decided within three months, failing which the applicant is treated as a deemed member; a refusal can be appealed to the Registrar within 60 days (Sections 22 and 23).

The lesson: file a nomination

A nomination does not replace a will, but it keeps the flat from falling into limbo. Any member can file one in the prescribed form, and change it at any time; the society must place it before the committee and enter it in the nomination register within seven days of the meeting (Bye-laws 32 and 33). Joint holders should each nominate.

Related on this site

This post is general information, not legal advice. Bye-law numbers refer to the 2014 model bye-laws; check your society’s registered bye-laws. Every case turns on its own facts.

← All posts