House hunting never comes to an end in the city and neither do flat owners’ list of questions about their rights. With most provisions embedded in confusing legalese, figuring out what a flat owner is entitled to gets really difficult. Gaurang Damani, who founded the website diehardindian.com, simplifies the answers to some of the most common doubts that Mumbaikars have with regard to their housing issues.
Can associate members contest society elections?
The person whose name is mentioned second on the share certificate is an associate member of the person whose name is mentioned first on the certificate. The latter is the original member. Associate member will have a right to vote provided that the original member is absent at the Annual or Special General Meeting, as per amendment to Section 27(2) of the Maharashtra Co-operative Societies (MCS) Act, 1960.
But the original member is required to surrender his voting right in writing to the society. The associate member has to fill a form and pay R100 to the society. Before the election, the society should prepare a final list of eligible voting members. The Maharashtra State Co-operative Appellate Court held that since an associate member enjoys the right to vote, it goes without saying that he could contest election to the managing committee. It is, however, suggested that, he live within the society premises.
What about an associate member’s right to the property?
No associate member has any property rights over the flat held by the member to whom he is an associate member. It is the nominee of the original member who claims property rights in the flat on death of the original member and on admission of the nominee to membership of the society. An associate member has no right in the property of the society. When the original member dies, his associate member automatically ceases to be an associate member.
What are the rules for nominees?
Nominee is merely a trustee. He does not get ownership rights in the property till the member who has nominated him or her is alive. On the death of the member, the nominee has to apply for membership. Subject to provision of Section 30 of MCS Act 1960 by sub rule No. 34, 17(A) or 19, in the event of death of the member, within six months, the nominee/ nominees shall submit their application for membership.
If there is more than one nominee, they shall make a joint application to the society and indicate which of them should be enrolled as a member. The other nominees shall be enrolled as associate members unless they indicate otherwise. The nominees shall also file an indemnity bond in the prescribed form indemnifying the society against any claims made to the shares and interest of the deceased member in the property of the society by any of them. The society shall then transfer the shares of the deceased member in the property of the society to the nominees.
What is the procedure if a member has not nominated anyone?
The procedure is as follows:
1. Bye law No. 35 provides that where a member of the society dies without making a nomination or no nominee comes forward for transfer, the society shall display a notice in the prescribed form exhibited on the society’s notice board. It shall also publish the notice in at least two local newspapers having wide circulation, inviting claims regarding property or objections.
2. After considering the claims received due to the notice, the Managing Committee should select the legitimate representative of the deceased member as per provisions of the bye laws No. 17(a) and 19. Provided that he gives indemnity bond along with his application, the society could approve the membership.
3. If there is more than one person, then such nominees shall make a joint application to the society. Society should give the first person a membership and the others co-membership. Such a person will not be owner by this transfer. He will be a trustee. The society should make them aware of this fact.
4. Society should also make them aware that legal heirship certificate from the competent court regarding ownership of the property is essential.
5. However, if there is no consensus among the persons come forward after this notice, the society can tell them that membership will be transferred only on the basis of a legal heirship certificate they bring from the competent legal machinery.
Other membership issues:
A member may have multiple flats or a flat and a shop. For each flat, the member will get a separate share certificate. Supreme Court opines in the case of Veena Kumari Tandon vs Neelam Bhalla and Others, Civil Appeal No. 5130 OF 2007 (Arising out of SLP (C) No. 525 of 2005), The principle is one flat one vote and not one member one vote.
It is binding to make provisions in the rules of a company to provide residential places for their employees. It is compulsory for the company to be a member of the society. Not more than one-fourth of the management committee shall consist of members of such firms and the remaining shall be individual flat owners. Such provision shall be made in the bye-laws of the society. No animal or bird should be housed in a flat without prior permission of the society and local authorities. The society should pass a resolution in the general body meeting to make a code for this matter as per the provisions in the law.
Who is responsible for repairs and checking illegal construction?
If a member wants to make internal structural changes in his flat, he has to obtain approval from the municipal corporation and a no-objection certificate (NOC) from the society. If he does not do so, then the society can take action under Bye-law No. 166 of the model Bye-laws and can complain to the local authority. Terrace repairs are the responsibility of the Society (Bombay High Court Writ Petition No. 7231 of 2002 Delivered on 28/06/2006).
Due to many buildings falling recently, the specific provision has been made that if a member changes the usage of the premises and carries out unauthorised construction, then he can be expelled.
Whose responsibility is leakage?
Old bye-laws stipulated that internal and external leakage of the premises were the responsibility of the society. However, in the new bye-laws, it is specifically mentioned that internal leakage is the member’s responsibility.
Solution for solving leakage problem:
>> File police complaint.
>> Mandatory injunction against him/her for carrying out the repairs to the seepage or file a civil suit for injunction and obtain stay order
>> Claim for damages to be ascertained by competent engineer at some later stage.
>> Seek the appointment of a commissioner also from the civil court to inspect your house and ascertain the extent of damage caused to your house along with a competent civil engineer
>> Interim prohibitory injunction restraining the person from using the area which is the cause for the seepage
>> Consequent damage to your house pending disposal of the civil suit
>> Criminal cases can also be filed against him/her with charges of criminal intimidation and verbal abuses/insult.
>> For quick response file a petition u/s 133 crpc in the court of local 2nd Class Magistrate.
What are the rules regarding transfer fees or donation on transfer of flat?
The Co-operative Court has held that the co-operative society can place reasonable restrictions on transfer of a flat to prevent nuisance from unwanted elements but that does not mean that the society has the right to profit out of the co-operative movement. Maximum transfer fee allowed is R25,000.
Even though there is no necessity for an NOC from the society for transfer of flat, according to rule 24 of the Rule 1961, one has to give 15 days’ notice to society before transferring the flat. On receipt of such notice, the Secretary should place the same before the meeting of the committee and take decision thereof before 30 days and inform the member within eight days. If Society has not taken any decision on transferring the share certificate within the three months’ stipulated period as per provision in Section 22(2) there is a provision to appeal before the Register u/s 23(2). Donations under Model bye Laws 2001 have been expressly prohibited. Societies having bye laws as per earlier Model Bye Laws can accept donation given voluntarily.
How much non-occupancy charges can be taken from flats vacant or given on lease?
Co-operative housing societies registered under the Act cannot charge non-occupancy charges for flats given out on rent, an amount beyond 10 per cent of the service charges (excluding municipal taxes), as per Government Order dated 1/8/2001 issued in public interest under Section 79A of the MCS Act. Exemption from payment will not be applicable to near relations such as son-in-law, brother-in-law (sister’s husband), sister-in-law (wife’s sister) and sister-in-law’s (wife’s sister) husband. It shall be applicable only to the members of the family, including a married daughter and grand children.
Non-occupancy charges of 10 per cent will also be applicable to the paying guest, as per GR SAGRUVA- 2010/PRA.KRA-173/14S.
Is it necessary to get an NOC from the developer for sale or resale of flats?
In a major relief to flat buyers, the state government has said that there is no need for a NOC from the developer for sale or transfer of flat (resale) in a fully constructed building. The state housing department has said there was no requirement for NOC under norms mentioned in the Maharashtra Ownership of Flats Act (MOFA). The department has also written to the Inspector General of registration, to ensure that officials in the registration department register sale documents without insisting on a NOC from developers.
Can members see documents about transactions made by the society?
Section 32 of the MCS Act (1960) states that any registered member cannot be denied the right to see how the society is functioning. If the society is not co-operating, then the member can make an application to Chairman/ Secretary to inspect the required information, with prior permission, in the society office during office hours. Your society is bound to give you the required information within 30 days of the application on payment of legitimate charges prescribed in the bye-law, at R5 per page. It is important to use polite language, and avoid accusations and references to previous incidents.
In your application you may mention that under section 164 of the MCS Act 1960, no suit shall be instituted against a society, or any of its officers, in respect to any act touching the business of the society, until the expiration of two months next after notice in writing has been delivered to the Registrar or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims, and the plaint shall contain a statement that such notice has been so delivered or left. With luck, this notice may itself subdue the managing committee, causing them to give you the necessary documents.
Can one make an application under Right To Information (RTI)?
Cooperative Housing Societies are not directly covered by the Right to Information (RTI) Act 2005. But they are indirectly covered, through the office of Deputy Registrar under Section 2(f), which entitles you to information relating to any private body which can be accessed by a public authority under any other law for the time being in force. The Deputy Registrar has to provide the said information, after getting it from your Society, using his powers under Sections 77 & 78 of the MCS Act. But if the desired information is not provided within 30 days, you can invoke the mechanism of First Appellate Authority under RTI Act, Section 19(1).
Who else can members approach for solving their grievances?
It has been specifically provided in the new bye-laws that every application made to the society should be acknowledged by the society. Managing Committee members live under the mistaken notion that the General Body is the supreme body for resolving all grievances.
Recourse to general misappropriation/ frauds:
To prevent fraud, members should meet office bearers at least once in three months for informal discussions on society matters and ask for explanations. Once the audit is done, the members can appoint an outside Chartered Accountant (CA) to scrutinise the audited accounts if they feel that there is any misappropriation.
If the managing committee refuses to give information or if a fraud has occurred in the affairs of the society then a minimum of one-third of the members can together complain in writing to the Deputy Registrar of Co-operative Department under Section 83 of MCS Act, 1960, for investigation and recovery of losses done to the society. You can ask for penalties and punishments to be imposed on the managing committee under Section 146(J) and section 147 of the MCS Act. Under Section 89A of the same Act, you can petition the registrar to “inspect” the affairs of the society.
On receiving the complaint letter, the officer or his nominee is duty bound to conduct such an inquiry. The registrar may direct the applicants to deposit a nominal amount with him. They will forfeit this amount if it turns out that the allegations were made with malicious intent. If the inquiry discloses substance in the charges made, the amount has to be refunded to the applicants. If the allegations are not false but yet cannot be proved, the state government would bear the cost of inquiry.
The MCS Act, 1960 provides that all office bearers and members of the society, past and present, should co-operate with such an inquiry and produce any document that is needed and is in their possession. The registrar is supposed to inform the society of its findings. The registrar also has the power to commence an inquiry on the basis of a complaint filed by even a single member. The society can also pass a resolution in the general meeting to expel any of the office bearers of the society.
For maximum effect, file separate complaints with the following offices:
The Deputy Registrar of Co-operative Housing Societies (at the concerned Ward Office)
The District Registrar of Co-operative Housing Societies
City: Malhotra House, 6 Floor, Opp. GPO, Fort, Mumbai-1
Western suburbs: Ground floor, MHADA bldg, Bandra East, Mumbai - 51.
Eastern suburbs: Vardavat mansion, First floor, Station Rd, Opp Thane District Co-op bank, Thane West 400601
The Mumbai District Co-operative Housing Federation Ltd, 103, Vikas Premises, First Floor, Dr NGN Vaidya Marg, Behind State Bank of India Head Office, Fort, Mumbai 400001.
The Commissioner and Registrar, Cooperative Housing Societies (Maharashtra State), Central Building, Station Road, Pune 411001. Email: firstname.lastname@example.org
The Registrar of Co-operative Societies, Co-operative Societies Dept, Sakhar Sankul Bldg, Pune 411005.
The Chief Secretary of the Cooperatives, 3 Floor, Mantralaya, Mumbai - 20
State Minister of Housing & Co-operatives, 7 Floor, Mantralaya, Mumbai -20
Can one go to Co-operative court or Consumer courts?
If your RTI is not replied to, you can invoke Section 148A Contempt of Co-operative Courts, which says, If any person when ordered by a Co-operative Court or the Co-operative Appellate Court to produce or deliver any document or to furnish information, being legally bound so to do, intentionally, omits to do so, he shall, on conviction, be punished with imprisonment for a term which may extend to six months, or with a fine of up to Rs 1,000, or with both.
Complaint can also be made in the Co-operative court on matters regarding repairs, leakages, parking, escalation of construction cost, unequal water supply and excess recovery of dues from members. As a consumer of services provided by a co-operative housing society, you are covered by the Consumer Protection Act in matters concerning the business of the society. Failure to give you necessary documents is a deficiency in service, and so you may approach the Consumer Court (engaging a lawyer is not required) and ask for relief. But this must be done within 24 months from the date of grievance arising. Please bear in mind that these are not for settling personal disputes, but for housing society matters.
Even if you have initiated proceedings in Cooperative Court and Consumer court, you may also file a FIR and initiate proceedings in Criminal Courts, if you have documentary evidence of nefarious activities such as misappropriation of funds, forgery of society records, duplicate share certificates, renting out the society property for mobile towers, advertisement hoardings etc. without the written consent of 75 per cent members, rigged and manipulated elections, refusal to transfer membership based on caste, creed, religion, threat, for assaulting members or for making noise after prescribed deadline hour in the evening. This can be done without any permission from the Registrar of Co-operative Housing Societies, because it is against individuals and not against the society.
What are the rules regarding the provision of parking and garage facilities?
The definition of a flat includes garage, as per MOFA Act, but does not include an open car parking space. An enclosed garage is not the same as a stilt parking slot. Stilt portion is not charged with property tax whereas garage which is closed on all the four sides is charged. Parking facilities have to be given to members having shops on the ground floor. Visitors also have a right to park in the building premises. 10 per cent of the total parking space has to be reserved for visitors as per Table 15 of the Development Control Rules.
Just because one member has paid money to the builder for car parking space, does not mean that the said member is entitled to the said parking space. Court judgements are crystal clear on that. Even if a member has not paid for car parking space, he is entitled to park his vehicle in the building premises, based on a resolution passed by the AGM.
As per Bombay High Court and Maharashtra State Consumer Disputes Redressal Commission judgements, no builder can sell parking space under stilts separately; it is classified as common parking space and can be allocated by the housing society committee. As per sub regulation (18) of Regulation 38 of the Development Control Rules, the size of a clearly marked parking space should be 2.5m x 5.5m. The size of scooter/ motorcycle parking space must be 2 sq m.
DISCLAIMER: The writer states that the article has been compiled after consulting various experts including JB Patel, Adv Ameet Mehta, Mukund Parikh, Adv Vinod Sharma, Adv. RP Rathod, Rajendra Popat and Adv Hemant Agarwal, Housing Times, MSWA Housing Societies Review and also on the basis of his personal experience. This write-up is not intended to be a replacement for legal opinion. Readers are requested to seek a legal opinion for problems.
>> As a consumer of services provided by a co-operative housing society, you are covered by the Consumer Protection Act in matters concerning the business of the society.
>> Cooperative Housing Societies are not directly covered by the Right to Information (RTI) Act 2005. But they are indirectly covered, through the office of Deputy Registrar under Section 2(f).
>> The state government has said that there is no need for a NOC from the developer for sale or transfer of flat (resale) in a fully constructed building.