Builder would demand substantial sum of money for transfer of flat 

wait for society to be formed then buy flat as you will have to pay only Rs 25 k to society 

Transfer fee is paid to society as remuneration towards transfer procedure. When no society is formed no need to pay any transfer fee. You can register the flat directly from builder.  

If the possession of the flat has been handed over to your vendor/seller then no transfer fee is required to be paid to the builder

the builder would want to have control over the project till infinity and he may never take any steps to form a society or to register a conveyance in favour of the society

so that does not mean that the builder would be entitled to charge transfer fee from the flat purchasers or the purchasers of such flat purchasers

that would amount to unjust enrichment

had the flat been sold when it was still under construction then the builder could have charged the transfer fee and in such a case he would hand over the possession to the purchaser of the flat purchaser

in this case possession is already with the flat purchaser and he is put in possession as an owner of the flat. so he can do whatever he wishes with his flat

the builder cannot sit as some landlord and charge transfer fee, which in my view is completely illegal

Share certificates are issued only after society is formed 

society will issue share certificate to those whose names are on society record

 better wait till society is formed then only buy the flat 

legally builder cannot charge you any transfer charges as he has no rights once flat is sold 

Rs 25000 maximum will be the transfer fee

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. The transfer fee amount is decided by the members of the general body of the society.

There is no legal basis on which a builder can levy transfer charges on the apartment owner.

It violates the Transfer of Property Act, 1882; which states that ‘a transfer of property, passes forthwith to the transferee, all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof’. According to the Act, the owner alone holds the full right to property and the builder has no right, title or interest over the property post registration of the property in the name of the owner.

 It violates the Indian Contract Act, 1872. It is an extra contractual demand made by the builder on the buyer, which infringes the buyer’s ownership rights.

A builder has no rights over the ownership of the buyer’s property and hence if the buyer wants to sell the property off to a third party, then no payment can be demanded on the part of the builder.

The builders threaten that upon non-payment of transfer charges, the buyer would not be able to sell off the flat. This is a punishable offense under Section 384 and 385 of Indian Penal Code (IPC).

The undue influence exerted by the builder is prohibited by Competition Act, 2007. Imposition of unlawful transfer fees by builders is deemed ‘abuse of dominant position’ as defined under section 4 of the Act.

The builder is not a society that he will provide the share certificate.

If you ignore the builder and get the sale deed registered to your name through the seller, them you may get yourself registered with the society as a owner when the society is formed at a later stage.

The builder is not a society that he will provide the share certificate.

If you ignore the builder and get the sale deed registered to your name through the seller, them you may get yourself registered with the society as a owner when the society is formed at a later stage.

for that you will have to check the specific wording of the contract between the builder and your seller

Dear Client,

Builder-buyer agreements, which are drafted and executed at the time of sale of an under-construction property, act as a sale agreement between the buyer and the builder. The buyer and the builder have to conclude the property transaction, based on the terms and conditions mentioned in the builder-buyer agreement, which clearly states the nitty-gritties involved in the property sale.

Transfer charges in builder-buyer agreements

This clause in agreements used to state that the buyer had to pay the developer a ‘transfer charge’, if the apartment was resold before the buyer took its possession. No disclosure was, however, made about what kind of amount the buyer would have to pay.

Section 13 (2) of the law prescribes that the builder-buyer agreement contain each and every detail, leaving little scope for confusion in terms of the builder’s responsibilities.

“The agreement for sale shall specify the particulars of development of the project, including the construction of building and apartments, along with specifications and internal development works and external development works, the dates and the manner by which payments towards the cost are to be made and the date on which it is to be handed over, the rates of interest in case of default, and such other particulars,” says the law.

Without registration, a buyer has no legal right over the property so, one cannot sell it to anyone under the Transfer of Property Rights Act.

Section 79 of the Cooperative Societies Act says that the premium amount of transfer charge should not exceed Rs 25,000.

A transfer fee is applicable only at transfer of property not at first sale by builder. Demand of society for transfer is illegal.

While your sale deed is the proof that the property has been legally transferred in your name, a share certificate is legal proof that you are the rightful owner of the co-operative housing society’s shares. It is the duty of the managing committee to issue share certificates after due diligence. In the case of society share certificate transfer, the share certificates should be issued to transferee within a period of one month of receipt of the instrument of transfer by such Company.

In case of a resale, if a person needs to transfer the share certificate, all of the paperwork and necessary requirements pertaining to the transfer of shares must be completed on time. It is the new member who needs to pay the transfer premium and ensure that all the dues are cleared by the previous homeowner.

In case of transfer/resale, the original share certificate has to be given to the society along with the other documents needed. If the share certificate is being transferred to a new member after resale, they have to finished all paperwork prior to handing the share certificate, including the required transfer of shares procedures.

Thank You.

- If the property is already transfer in the name of that owner after executing sale deed in his behalf , then NOC from the builder is not necessary 

- If there is only agreement in favour of the owner , then the NOC and consent is required from the builder 

- Further, if you purchase the said property after forming the society , then the society can issue Share certificate in your name.