Society cannot demand more than Rs 25K 

seller has to pay the transfer charges 

Hello,

1. The Society cannot charge any other transfer charges other than the normal charges as you have mentioned in your query. This is illegal.
2. Once the buyer applies for transfer of membership in the prescribed format on payment of the transfer charges the Society must transfer the membership in the buyer's name within 90 days of the application.
3. If the Society fails to do so the buyer is deemed a member legally.

- As per the Bombay High Court, a society can collect funds, only by legally permissible charges or fees and is not expected to indulge in profiteering from the members.

- Further , there is no bar on paying donations to a society, it should be done without any compulsion or coercion and in no way, can the society charge transfer fees under the pretext of donation.

- Further, the transfer fee charged by the society has a legal basis as in an existing cooperative society, the owner of the flat only holds a share in the society and enjoys the right to occupy the particular flat that he owns.

Further , under Section 23 of Indian Contract Act, the payment of more than Rs 25,000 to the society would make the agreement between the society and the buyer null and void as it would amount to unlawful consideration.

- Hence, you can check the by laws of the society , whether the payment of transfer charge is mentioned in the rule or not , and it must be pass in the GBM meeting . 

- Further, this charge is shared by the seller/owner of the flat.  

Transfer charges are fixed in approved byelaws of Society. It cannot not demand one rupee more than what is approved. Ask them to made a written demand and after that complaint to Registrar of Societies. An inquiry will be instituted by Registrar and if extra demand is proved, the MC will be suspended and admittatur will be appointed by Registrar. It is serious offence. The transferee is liable to pay transfer charges.

Societies insist on payment of a transfer premium, at the time of sale of the shares and rights in a flat by a member, which ranges anywhere from Rs 25,000 to even a percentage of the purchase consideration for sale of the flat, depending on the city where you live.

But as per Bylaw No 38 of the 2013 model society bylaws framed under the Maharashtra Cooperative Societies Act, 1960, read with circular dated August 9, 2001, issued by the government of Maharashtra. The aforesaid Bylaw No 38 and circular dated August 9, 2001, unequivocally state that the premium fixed by the society for the transfer of flats, cannot exceed a sum of Rs 25,000.

Though the ceiling is Rs. 25,000 the society would pressurise the members to pay the exorbitantly demanded amount as voluntary donation.

There may not be any resolution passed in this regard, even the bylaws would be silent on this subject, but the society would exploit the urgent situation of the seller and buyer may take advantage of this by placing the so called exorbitant demand.  

Further, the Bombay High Court, in the Alankar Sahkari case, recognised that in a situation where a flat purchaser wants a smooth transaction and transfer of the share certificate in his name, the society enjoys a dominant position. Under such circumstances, the society demands payment of exorbitant amounts from the flat purchaser, under the garb of ‘voluntary donations’.

While the legal recourse and law has been fairly settled, the question that remains, is whether a flat purchaser is willing to initiate acrimonious litigation with a society where he or she hopes to stay for the foreseeable future. However, in societies where presently there is no resolution with respect to charging of transfer premium as voluntary donations or otherwise, members should oppose the passing of any such resolution, as it is against the spirit of the law. Such acts can only be stopped, if members raise their objections at the right time.

Sir/Madam, 

You may find the details in agreement to sale. If the same is not there, the same can be shared between buyer and seller equally. 

The society is entitled to transfer charges, if any, only in accordance with its bylaws. Who has to bear the charges depends on the agreement between the vendor and the purchaser. 

Dear Client,

                   The buyer must also pay a transfer fee.The buyer will also have to pay a premium.However, in case the flat is being transferred among family member or to the legal heir of the actual owner after their death or mutual exchange of flats among the members, this fee is not applicable.As per Bye-Law no. 40(d)(vii) the Society should collect transfer charges 2.5% of the difference between the book value of the flat and the price realized by the transferor on Transfer of the flat OR maximum Rs. 25,000/- whichever is less.

Thanks & Regards

No it's illegal. They can't demand more than 25000/- as transfer fees