POSTED ON August 21, 2019

How To Register a Complaint Against Housing Society

Living in a housing society is akin to being in a committed relationship, except it gets murkier when things go awry as they sometimes do. We’ve all been in catch 22 situations where if a problem persists, we are damned if we try to solve it and damned if we don’t. After all, it is better to resolve a conflict or dispute peacefully in a way that is acceptable to both parties. If however, the society has been functioning to the detriment of its members, causing unbearable inconvenience, they have the power to right the wrong. Luckily, there are laws that guard you against real and present danger (and even inconvenience) posed to you by incompetent, ruthless or negligent committee members. This post covers the different problems that may arise for members in a housing society and various ways for redressal.

Complaints that can be raised in General Body Meeting:

  1. Issues related to maintenance of the property
  2. Not displaying society’s name board
  3. Not allowing members access to common spaces
  4. Charging excessive fines, maintenance, other dues
  5. Failure to insure the property

How to submit a complaint to the Managing Committee?

The member should submit a written complaint explaining the dispute/complaint in full detail to any office-bearer of the society. In the next committee (after the complaint is received), the Managing Committee reviews the complaint, takes a decision and communicates it to the member within 15 days. If the members do not receive any communication from the Committee within 15 days, they can approach any competent authorities for redressal of their complaints. A copy of the original complaint letter should also be attached to the escalation complaint. In cases that are not so cut and dried and require extensive study of legal loopholes and workarounds, members should think about hiring an experienced lawyer (preferably specialising in real estate laws) who can bear the load and present a winning case. As such, housing societies have their own legal advisor/consultant or lawyer who does a good enough job of defending it if trouble befalls. Members who want to present a solid case with all legal intricacies and technicalities covered in a complex situation, should be better off with legal counsel. Below is a classification of complaints and the competent authority for members to approach.

Administrative and financial mismanagement complaints and disputes that fall under the purview of the Registrar:-

  1. Non-issuance of share certificates
  2. Refusal of membership
  3. Exorbitant premium demand
  4. Refusal to produce account books and registers for inspection/ tampering or destruction of records
  5. Incomplete or falsified maintenance records
  6. Failure to prepare audit reports/ audit rectification reports/ annual reports
  7. Corruption and misappropriation of funds
  8. Investing funds without prior approval of members
  9. Inappropriate/false non-occupancy charges
  10. Failure to conduct election on time
  11. Appointing defaulting members on committee
  12. Rejection of nomination
  13. Failure to conduct annual, special or general body meetings wilfully
  14. Failure to file returns, statements or mismanagement of bank records/documents

Disputes pertaining to repair, construction and amenities should be appealed to Co-operative Court/Municipal Corporation or Local Authority:-

  1. Major and minor repairs, leakages
  2. Parking issues, disputes with allotment of residence
  3. Managing Committee resolutions
  4. Disputes with election of managing committee (except nomination refusal)
  5. High construction cost, disputes with appointment of architect or redeveloper
  6. Water supply issues and high maintenance/recovery
If you are facing harassment from the committee members, including but not limited to rude/impolite behavior on a consistent basis, verbal or physical threats or assaults, you must immediately approach the local police station and file an FIR. After receiving a police NC (non-cognizable), you can approach the Civil Court for further redressal.

POSTED ON August 21, 2019

Amendment of Housing Society Bye-laws

Byelaws are a set of instructions and rules for a society to function. They come into effect once the housing co-operative is formed and are universally applicable to everyone. They are formed on the basis of the state’s co-operative societies act. However, based on the structure, requirements and membership, there are various permutations and combinations in bye-laws that a society can adopt at the time of registration and get them approved from the Registrar. Expansive as the bye-laws are, they do not always have the solution or workaround for every unforeseen circumstance. As it evolves, a society has the right to amend its bye-laws as per provisions of the law. A society can amend its bye-laws when a pre-existing bye-law fails to meet its current situation or need adequately. For example, if your society followed a per square feet rule to arrive at a monthly maintenance charge, but underwent redevelopment and now wants to apply a hybrid maintenance calculation. In such a case, the amendment is necessary. Some societies may be facing a problem with meeting the required quorum for general body meetings and may want to reduce the required number. Others may be struggling with code of conduct within members and want to insert specific sub-clauses with respect to maintaining cleanliness, instructions to use common areas, etc. Many societies also incorporate a new penalty system to elicit better compliance from its members. Societies often put out new rules on notice boards or hand-deliver them to the members instead of amending bye-laws. However, to amend the bye-laws is a surefire policy to ensure the new rules are applied effectively.

Procedure to amend Bye-Laws

No bye-law can be amended or altered unless the members have been notified 14 days before the general meeting in which the amendment resolution is to be passed.
  1. The society should pass a resolution to amend a bye-law in the general body meeting after giving a notice to all its members with respect to the proposed bye-law.
  2. The resolution should be approved by 2/3rd of the majority from among members present in the meeting.
  3. From the date of the meeting in which the resolution was passed, the society should submit the resolution to the Registrar within two months.
  4. You are required to submit the below-mentioned documents when you send an application (with a non-judicial court fee stamp of Rs 25) to the Registrar:-
    1. Copy of the existing bye-laws and the revision/ amendment to be made along with substantial reasons that justify the amendment.
    2. Four copies of the bye-laws as they will appear after the amendment, signed by the Managing Committee’s authorized office bearers.
    3. One copy of the notice given to members about the proposal of the amendment of the bye-laws.
    4. Any specific documents required by the Registrar
Once the Registrar receives the application, he examines the proposal thoroughly and after he is satisfied that the amendment is for the benefit of the society, solves a particularly persistent problem, helps better functioning and is not in contradiction to co-operative societies act, he registers the amendment and gives the amended version of bye-laws to the society, certified and officially approved. If the Registrar fails to close the application within 2 months, he should pass it on (within 15 months from the end of the 2-month window) the same application to an officer on a higher designation than him within the same office. If the Registrar finds that a modification to the proposed amendment may be needed for it to be more effective, he suggests it to the society, explaining the rationale in writing.

Can the Registrar amend the bye-laws without the society’s own initiative?

If the Registrar believes that a particular amendment to the existing bye-laws is in the interest of a housing society and serves a bigger cause of the co-operative movement, he has the power to direct that amendment to be incorporated by the society within a specific timeframe decided by him. The Registrar makes it mandatory to implement the amendment within the given timeframe. If the society fails to do so, the Registrar gives them an opportunity to present their case and justify the failure to abide. An issued and certified copy of the amendment is provided to the society which makes it legally binding. The society can make an appeal if there are any justifiable constraints in the amendment, however, it should be noted that the legal power remains with the authority to impose an amendment. Ideally, all members should obtain a copy of the bye-laws from the housing society’s secretary, so that when an amendment takes place, they have a frame of reference to fall back on and understand why the amendment was made in the first place. The society is required a copy of bye-laws in its office for members’ perusal.

POSTED ON August 20, 2019

Roles and Responsibilities of Residents in a Housing Society

We’ve all come across that obnoxious neighbor who bangs his door shut loudly to jumpscare people three floors down, dumps banana peels straight from his balcony on to the ground, plays loud music when the world is slumbering peacefully, lets his unleashed pet out in the open to bark and claw at unsuspecting passers-by, and, worst of all, the repeat offender who blatantly flouts every rule just to be a rebel without a cause. In all fairness, we all have committed some form of misdemeanor much to the inconvenience of our neighbors, albeit not always intentionally. This article covers the fundamental duties of a housing society resident in order to keep our occasional gaffes under check and help us understand the basics of acceptable behavior. Let’s take a look.
  1. Maintenance of residence: Members and residents are required to keep their flats/homes and nearby premises clean and habitable.The residents should also maintain proper cleanliness etiquette while using common areas, parking lot, etc. and not throw litter from their balconies and windows.
  2. Permissible structural changes: If any alterations or additions are in order, the residents should first submit an application to the Secretary of the society, providing him with the specific details of the process and plan.
  3. Payment of dues: Members must regularly pay the maintenance charges and all other dues necessitated by the society.
  4. Attend meetings: Bye-laws mandate members to attend at least one general meeting in five consequent years. But ideally, the residents should regularly check the notice boards for meetings and attend them for their own benefit. Members should also participate in the annual and special general body meetings to stay updated with the affairs of the society.
  5. Follow bye-laws: Residents should be well-aware of society’s rules and obey the provisions of the bye-laws.It is highly recommended that members obtain a copy of the model bye-laws from the Secretary of the society.
  6. Allow inspections: The Secretary, after prior intimation to the member, inspects the flat/home to inspect its conditions and to ascertain if any repairs are needed. Members have to allow for such inspections at a mutually convenient time.
  7. Carry out repairs: If the Secretary recommends any repairs, renovations based on his inspection, the residents should carry them out at their own expense with the help of society-appointed architect. If they fail to do so, the society carries them out after giving a notice to the member and recovers the dues from him.
  8. Storage of dangerous/unauthorized products: Residents should not, without prior permission of the society, stock any toxic or combustible goods which requires a permit from a competent authority.
  9. Not conduct unlawful/criminal activities: Residents must not use their homes or society premises/property to engage in criminal and illegal activities of any kind. Serious legal action/penalty could be imposed if the members are found guilty.
  10. Respect neighbor’s privacy: Residents should not be found intervening in the private matters of their neighbors unless solicited for their counsel. Behavior such as snooping through their mail, spreading rumors and creating disharmonious scenarios is unacceptable.
  11. Build good rapport: Residents should maintain good relationships among one another to prosper as a society collectively.This includes being neighborly, cooperative and helpful when situations demand.
  12. Report wrongdoings: If however, as a resident of a society, you suspect any suspicious behavior, criminal leanings, misuse of residence, financial malfeasance or any other incident of misconduct that is in breach of society bye-laws, you should immediately bring it to the notice of the managing committee.
  13. Not create nuisance: Residents should not hold loud parties at odd hours so that others are not inconvenienced. While using the playground, residents should follow the time schedule for usage so that loud noises do not disturb other members.
  14. Pet etiquette: Members should not keep pets, including but not limited to birds, dogs, cats, reptiles, etc. without obtaining prior permission from the managing committee. The society, on the other hand, should make clear guidelines regarding keeping and maintaining pets as per provisions adopted in the model bye-laws or making a resolution in any general body meeting. Members are required to train their pets so that they do not cause harm or nuisance to other residents and also wash their pets regularly so that no foul smell emanates around common areas during play time or daily strolls.
  15. Maintain records and documents: Residents are required to maintain and safeguard all documents, agreements, share certificate, and other paperwork that is executed between him and the society.
  16. Using residence for personal business: If a resident intends to use his flat or home for the purpose of business such as a yoga/meditation class, dispensary, coaching class, baby nursery, beauty parlour, or any other venture, they could do so as per society bye-laws. However, any code of conduct made during general body meeting should be followed and members should ensure no other resident is subjected to nuisance or trouble by their profession.
  17. Parking responsibilities: Parking areas allotted by the society are the member’s rightful slots outside of which they should not park their vehicles. Other vehicles such as bicycles, children’s scooters should also not be haphazardly parked within society premises or placed in common areas without prior permission.
  18. Provide accurate information: At the time of application to co-operative housing society and at the time of registration, members are mandated to submit correct and verifiable information regarding themselves with legitimate documents. Fraud in identity, omission of vital information and misrepresentation of facts are not allowed.
There is always that small percentage of people who need to be explicitly told these commonplace rules that arise from common sense. Most of our good behavior instinctively stems from an empathic, understanding human nature, which is why we would not intend to do that unto others which we would not have done unto us. At the end, we must not only be familiar with our duties as a member of a society, but also abide by them for an ideal co-habitation in a gated community.

POSTED ON August 19, 2019

Transfer of Membership in Housing Society

If you’re wondering what your options are to transfer your property to a family member or anyone else you see fit to inherit your residence? Fret not, there is a simple and clear procedure provided by your society’s model bye-laws that cover every probability and circumstances that may occur in your life.

What are the rules?

You should be able to transfer the membership to any person of your choosing, be it a family member or any other. However, if the society rules that you have not been compliant according to the bye-laws, it may raise an objection. You have to be regular in paying your dues and maintenance, and should not have been held in gross violation of its rules and are not facing expulsion due to disrepute or persistent nuisance to other members.

What is the procedure?

Any member desirous of transferring ownership of his residence should give a 15-day prior written notice to the society’s Secretary, stating his intention. The Secretary puts forth this notice in the next committee meeting. Member’s eligibility to transfer shares is verified according to bye-laws. Any decision (of approval or disapproval) has to be taken by the managing committee within 30 days and has to be communicated to the member within 8 days of taking the decision. However, under exceptional circumstances, the time period can be extended to no longer than three months. If within that time period, no communication is sent to the member by the society, the person to whom the ownership is being transferred is deemed as the member of the society in place of the original member. A ‘No Objection’ Certificate is usually not needed from the society in this matter, but if the member has requested for an NOC, the society must provide it to him. A society should not have any objections if the member intends to transfer ownership to another, unless there has been a serious non-compliance of bye-laws by the owner. If it cannot provide the NOC, it has to inform the member of the reason in 15 days. The member can then appeal to the three other committee members or apply to the Registrar.

Documents required:

  1. Prescribed form in the bye-laws that states the intention of transfer along with Share Certificate
  2. Application in the prescribed form for Membership of the proposed Transferee
  3. Member/Owner’s resignation in prescribed form
  4. Valid reason for transfer of membership
  5. Letter of consent from the person to whom membership is being transferred
  6. Registered agreed copy with paid stamp duty
  7. Payment of the transfer fee of Rs 500 by the member and Rs 100 admittance fee paid by the transferee
  8. Submission of NOC from a financing agency (if any)
  9. Premium amount of Rs 25,000 (being the maximum amount to be paid, however could be less depending on what is decided in the General Body Meeting). However, the premium does not apply if the ownership of residence is being transferred to an heir/family member or if the members have decided to exchange flats between each other.

Procedure to transfer membership upon death of the member

Most members appoint nominees to whom the society transfers the shares/interest in case of death. The nominees are required to submit an application for membership within six months from the death of a Member. If there are multiple nominees, they should decide whose name will be primary and the others become joint or associate members. If there are multiple nominees and they wish to nominate only one among themselves as the owner, they should give the society an Indemnity Bond, securing it against legal liability for its actions. Such cases occur when one is a trustee and holds the property till all the heirs are brought on record. As such, the society verifies the nomination form and executes the transfer according to the court probated will or civil court succession certificate. It is not the society’s responsibility to verify who the actual heir should be as long as the nomination is according to its bye-laws and legally accurate. If the member has not provided a nomination for transfer of ownership, the society (at the expense to the member) within six months of the member’s death, issues a public notice inviting claims or objections to the proposed transfer of shares and interest of the deceased member. This notice is published in two local newspapers with a good circulation. After receiving a response, the society decides who is the legal heir to be granted ownership after receiving an Indemnity Bond from them securing itself against claims made by any other. If the society cannot decide, it transfers the ownership after asking the claimants to produce a succession certificate from a competent court.

POSTED ON August 16, 2019

Mukesh Kumar: “It’s not just my family, but 432 families that we need to think of while making decisions”

Weekly markets within the compound, access to all the modern amenities, strong security systems, tree-lined avenues – Bangalore’s BREN Unity in Marathalli is a model gated community. Spread over five acres, it is today home to around 432 families. Ensuring a convenient, secure community life for all is no easy task, of course; behind it all is an 18-member management committee (MC) that sees that all is functioning to residents’ satisfaction. We sat down with Mukesh Kumar, an MC member at BREN Unity who has been managing its IT Infra for close to four years, to discuss his day as a committee member, recent changes introduced to the community, and the impact of MyGate on residents’ day-to-day lives.

How does your regular day look like as a committee member?

I work at Qualcomm, so I’m pretty busy all day. However, I am in constant touch with other MC members and our site managers. I also make myself available if any priority calls are to be taken during the weekdays. Otherwise, every evening I spend an hour visiting the maintenance office to check for issues, if any, or complaints highlighted during the day.

What is your most pressing challenge?

So, the major challenge that we have faced is thinking at scale. It’s not just about my family or the families of the committee members; rather, it’s a total of 432 families that we have to think of, at present. Therefore, whatever rules we set and decisions we make, we have to ensure that there is no negative impact on even a single resident.

What kind of issues are typically raised by residents?

Since I handle IT infra, the complaints that reach me are largely related to security concerns. For instance, I intervene if the network is down or if something goes wrong with physical security and the security footage needs to be monitored. All these complaints were raised through email previously, but we now have a ticketing system in place for efficient communication and resolution.

What innovations has the committee introduced in the community?

We observed that there weren’t any daily needs stores in close proximity and residents were facing challenges trying to arrange for items in times of emergency. Therefore, we worked with multiple small vendors to set up weekly market within the compound. We also signed up with Bigbasket to install a kiosk for vegetables and other daily essentials. Also, as a common practice in Bangalore, we don’t see CCTVs or surveillance cameras in the basement areas of residential complexes. However, we have installed CCTVs in our parking areas and basement for security purposes.

In what ways is MyGate helping BREN Unity?

The system is helpful in multiple ways. To quote examples – earlier, it was a nightmare to monitor fake entries. We had to go through a bundle of books to see if the entry was done or not, if yes, was it done right. But now, everything is streamlined. I can fetch reports any time. Like when one of our interim vendors exited, it was a cakewalk to glance through the reports and settle payments. Another helpful aspect is the househelp notifications. Whenever they enter or leave the complex, everyone is notified, which nullifies any chance of forged entry. Visitor validation through e-Intercom is another valuable feature. Previously, for each visitor validation we had to call the resident and if they were unavailable, they used to pass a different number, We would be left wondering if that number was valid or not. It was a crucial security risk. However, with MyGate, it’s actually sorted out, There are no long queues near the main gate for visitor validation as it all happens automatically and the system seamlessly takes care of it.

Which features do the residents find the most useful?

We have on-boarded the Clubhouse feature that the residents are loving, especially parents. They are now aware of when their kids are entering and exiting the play area. Currently, this feature is being appreciated the most.

How do you see the guards evolve in the past two and a half years?

We definitely had our own apprehensions around how will the guards operate the system and the difficulty levels that we might have to deal with. However, much to my surprise, they were quite comfortable with the use of smartphones. Moreover, with untiring on-boarding support from MyGate, the guards were able to easily, and very quickly, adapt to the system. They are extremely happy as they can focus better on surveillance rather than maintaining physical entry books.

How would you summarise your MyGate experience?

You are doing a great job by securing the gated societies. It gives a deep sense of security to the society residents. We have seen few tenants who decided to stay at BREN Unity just by seeing that we are on MyGate. That’s a great attribute. “Kids and families feel safe” – this is the feedback we have got from few of the tenants. So, it’s going great! We definitely feel a solution like MyGate is critical for ensuring safety in gated complexes.

POSTED ON August 14, 2019

Procedure to Change the Name of a Housing Society

In a rare but completely plausible scenario, your society and its members may feel that its current name does not really represent the essence of the residents’ collective spirit and may want to change it to something more in tandem with its motto and beliefs. Some societies also intend to change the name due to astrological or numerology beliefs, while some just intend to adopt a new name for a new beginning. Whatever your reason is, the government has provided you with an option to change the name of your society. But use it wisely, follow the guidelines and pick a name that resonates at all levels.

How do I change the name of my housing society?

There are no explicit guidelines in co-operative societies acts of states or bye-laws as such. But as a matter of fact, the Societies Registration Act 1860 lists a section titled – Societies enabled to alter, extend or abridge their purposes – which does list a series of small steps that co-operative societies can adhere to if they intend to change their name. Follow the steps listed below and you’re good to go.
  1. If the Managing Committee decides that a name change for the society is required, it may propose the idea to its members with appropriate reasons. A special body meeting should be held in which name change proposal of the society should the talking point.
  2. The members who are not likely to be present at the meeting should also be notified of such a resolution ten days prior to convening the special body meeting.
  3. One month after the initial meeting, a subsequent special body meeting should be held where (after reviewing opinions/objections (if any) from members, a final resolution is passed involving name change.
  4. The new name should be approved by 3/5th of the majority. Note that some states require 2/3rd or 3/4th of the majority. Delhi, Maharashtra, Gujarat, etc. need 3/5th majority. Unless the requirement of majority vote is met, no resolution is allowed to pass.
  5. A written notice is signed by the Secretary along with seven other members is to be executed and sent to the Registrar for sanction.
  6. If the Registrar approves the new name, the Society is required to send the original registration certificate to his office for incorporating the new name in the place of the old one in its records and the change of name is affected in the registration certificate as well. The new name is considered to be in effect from the date of registration.
The above mentioned procedure is a general one cited from the Societies Registration Act 1860. Different states may apply some minor differences, so be sure to check with the Registrar for any specific requirements.

Things to remember

  1. The new name of the society should be incorporated in the bye-laws and all other official documents, letterheads, etc. of the society.
  2. The new name should also be declared in the official government gazette so that it is publicly notified as well. The name change of the society is just that. It doesn’t change any obligations or liabilities the society has towards other entities, local authorities, service staff, members (living or deceased) or vendors. If the society is involved in any legal proceedings or cases, they have to be continued as before.
  3. There is zero to minimal cost in changing the name of your society.
  4. The new name cannot be identical to that of an already existing society in the area under the purview of your Registrar. If it is, the Registrar will not approve it.
  5. The new name of the society should not be misleading, negatively charged, and be in conflict with the motto or object of the society. It should not allude to or suggest racial, gender, caste or political discrimination in any manner so as to not offend or victimise any citizen.
  6. The new name should also not suggest or state explicitly that it is part of the government of India or any arm, department, wing or institute which is constituted by the government of India, thus not misleading the general public into thinking that it is under the patronage of the government. In other words, the name should not evoke conflict, negativity, prejudice or misrepresentation.
Before you go through the rigamarole of the legal procedure and brainstorm new names for your society, check with the register of societies to see if another society in your area already exists with the same name. This is to avoid the pitfall of disapproval from the Registrar. Generally, this is one of the simplest procedures to abide by in the legal maze of the constitution and should cause no heartburn if you follow the guidelines listed above, conjure an acceptable and maybe even an inspiring new name for your society.

POSTED ON August 13, 2019

Deemed Conveyance of a Co-operative Housing Society

The legal ownership of your society as a whole is not automatically acquired once the homeowners buy individual residences or once you form a co-operative housing society. A conveyance deed is a mandatory legal document that literally seals the deal. A big percentage of societies across the country exist without a Conveyance Deed which presents a set of challenges, including no ownership to the entire property and redevelopment woes.

What is a Conveyance Deed?

A Conveyance deed is a legal document of ownership right over property (land and building). It is a document designed to transfer the property ownership right from the developer/builder to the society.

Regular Conveyance vs Deemed Conveyance

Within four months of the formation of a housing society, the developer is required to legally convey the land and the plot ownership to the society, ideally to the managing committee members who are in charge of legal documents. When the developer/builder/landowner prepares and executes a conveyance deed within stipulated time period and presents it to the Registrar’s office, they have said to create a Regular Conveyance Deed, in which the society is handed over all the original documents from the builder without any inconvenience to either parties. However, the builder/developer is not always prompt and proactive in following the legal guidelines and it has been recorded a few years ago that around 80% of housing societies had not been given the conveyance deed in Maharashtra alone. Builders refrain from giving conveyance in hopes of increased FSI that they could avail in the future or simply because they are negligent in following the mandatory procedures. In such scenarios, the societies have the provision of obtaining Deemed Conveyance with the help of competent authorities and the Sub-registrar. When the builder proves to be an obstacle in obtaining the Conveyance Deed, the society has to follow a procedure of obtaining certificates and documents from local authorities while simultaneously applying to the Sub-registrar who examines the documents provided and allows the builder to present his case. Only after due diligence and after ascertaining that the society is correct in demanding conveyance, the Registrar passes the order of issuing Deemed Conveyance under the Registration Act 1908, which is then considered legal and final.

The procedure to get Deemed Conveyance

This process involves a lot of paperwork and it goes without saying, a lot of groundwork by the Managing Committee of the Society. But it’s not impossible and certainly doable when you have the right guidance.
  1. Submit an application in Form -7 to the District Dy. Registrar, Co-operative Societies (Competent Authority)
  2. Along with the form, add the court fee stamp of Rs 2000
  3. Affix the documents listed below along with the application form
The decision is taken by the Sub-registrar within the time period of six months or less. Any official who does not provide a Deemed Conveyance within 6 months is penalised between Rs 500 to Rs 5000. Documents needed to obtain Deemed Conveyance
  1. Affidavit made before a Notary or Executive Magistrate
  2. List of all members and details of each member’s share certificate
  3. True copy of Society Registration Certificate
  4. Index II (extract after registering the document of immovable property) and copies of Registered Agreements for all Flats/ Shops with Stamp Duty & Registration
  5. Copy of the legal notice issued to the builder for issuing Regular Conveyance Deed
Land revenue documents from city survey office/collector’s office
  1. 7/12 Extract
  2. City Survey Plan
  3. Property Card
  4. Village Form VI or register of mutation
  5. Urban Land Ceiling Clearance Certificate (Collector’s Office)
  6. N.A Order and latest NA tax receipt (copy of Non Agriculture Order from Collector’s Office)
Documents from Municipal Corporation
  1. Property taxes paid
  2. Approved plan of layouts of residences along with approved building plans and location plan of the building
  3. Intimation of Disapproval (IOD) – a clearance to the builder to start the construction process
Documents needed from professionals
  1. Architect’s Certificate of the layout plan
  2. Full report of FSI left in the property from Panel Architect
  3. Advocate issued Search Report of Land (for the last 30 years minimum)
  4. Advocate issued Title Certificate of the Property
Documents needed from promoter/builder/developer
  1. Copy of Partnership Deed of all the partners of the builder firm
  2. Development Agreement between landowner and builder
  3. POA provided to builder from landowner
  4. If necessary, the Will and Probate copy if land agreement signed by landowner’s heirs along with Death Certificates of Landowners if needed
Up until a few years ago, it was mandatory for the society to submit an OC (Occupation Certificate) and BCC (Building Completion Certificate). But this was a harrowing process for societies as many builders had abandoned the project before complying with all completion norms and handed the reins to the society before obtaining these certificates from authorities. Homebuyers found this step a major roadblock in obtaining Conveyance Deed as the authorities would not issue OC and BCC without proper compliance. The government has scrapped the need for these in order to get a Deemed Conveyance. However after it is granted, the society is required to obtain OC and BCC from the municipal corporation.The copy of Deemed Conveyance Deed along with the Index II has to be sent to local authorities/government offices to officially incorporate the name of the society. After the submission procedure, the Registrar sends an official/s for a spot visit and issues a notice to the builder. The builder has the opportunity to present his plea if he so chooses, after which a hearing is held formally. The intention is published in a regional and English newspaper. If no objection is raised on any counts, the society is given the Deemed Conveyance. It is crucial for a society to obtain a Deemed Conveyance in case if the builder creates trouble with a Regular Conveyance as a Conveyance is mandatory to establish legal ownership and also when the society wishes to opt for redevelopment at a later stage. Many projects are stalled due to the older societies not being able to produce a Conveyance.

POSTED ON August 12, 2019

How a Leading Chennai Developer Leverages Tech to Cater to Evolving Customer Expectations

Homebuyers are increasingly showing interest in a digital upgrade. In fact, 2018 was a record year for the home automation industry, which showed a growth of 30% year-on-year. Developers, therefore, now commonly integrate their projects with smart solutions, such as home automation, smart security and the like. MyGate is one such solution that is helping over 200 leading developers deliver a safer, more convenient community living experience to its residents. Additionally, its e-intercom feature is a cost-effective alternative to the traditional intercom system, at a negligible monthly spend, which helps developers save up to 95 per cent. Radiance Realty, one of the largest developers in the south, today counts MyGate among the solutions it provides to its residents. It today uses MyGate to enhance the security of over 1500 homes across seven of its sites in Chennai and Bangalore. We had the chance to speak to T Srivathsan, Business Head at Radiance Facility Management Services, about how MyGate has improved the experience of its residents.

What are customer expectations from technology in the real estate space?

Customers are, of course, very comfortable with technology today. Every day, they come across innovations that claim to make their lives easier in one way or the other and there is no shortage of options to choose from. However, they are not just looking to automate processes, but are keen to adopt user-friendly products that can give solutions at a single stop.

Did you believe that the gate was one such solution?

Yes, so we were always managing security operations manually. However, due to high attrition among guards, we weren’t able to get the desired results. Also, the probability of human error in manual entries and physical registers, was always high. With MyGate, as residents directly approve or disapprove visitors, they are always aware of the visitors they are expecting. To a large extent, this prevents any strangers from visiting the house and it’s quite safe as well. Our residents are adopting the app well and there is positive feedback around them feeling secure and in control of who knocks at their door.

How would you define your experience with the MyGate team so far?

One of our initial projects, Radiance Mandarin, adopted MyGate a year ago and that’s how we started. Today, we have the app installed at seven sites. The residents find the app useful as they don’t have to waste time writing in registers and can access data in real-time. We are currently using the Visitor and Helpdesk management features. However, we are also getting requests to deploy the Community Management module to facilitate bill payments and other community related tasks from a single platform.

How has MyGate improved the way your communities operate?

The operation efficiency of our sites has certainly been enhanced. In early days, we weren’t sure if the idea would work well with the security guards as it requires a certain level of skills. But with exceptional onboarding support and regular training sessions, the guards are able to use the app efficiently. They do not have to spend time calling residents for verification every time a visitor hits the gate. The app solves this problem. Overall, it is a very good innovation that helps to streamline visitor management at gated community.

POSTED ON August 12, 2019

De-registration of Co-operative Housing Societies

Every year state governments strip off a select unfortunate societies of their legal status as co-operative housing societies, leaving them powerless to transfer shares, unprotected from legal protection over disputes and deprived from using the word ‘society’ in any manner. Many members who are residents of deregistered societies have found themselves entangled in consequential backlash and have not been able to carry out any ownership transfer in addition to the problem of diminishing value of their residences because of the associated stigma of deregistration. The most common offence leading to deregistration is the failure to comply with bye-laws regarding maintenance and submission of mandatory financial audit reports. Many societies fail to abide by this. Either the managing committee does not have the time to follow yearly audit submissions or they simply lack the awareness or skills to do so. Another reason for deregistration is when the society members are found to be involved in falsifying information on their registration submissions and engage in misrepresentation of any kind. Bombay High Court had ruled in 2018 that if some members are found to be erecting unauthorized construction in their own residences, it does not warrant a deregistration of the entire society, however other corrective measures may be taken as per society bye-laws against such members. Once the Registrar passes the order, the society’s managing committee has no legal recognition and no respite if found under the law if there are any grievances or disputes within the members. They still continue to have the ownership of their residences, but other than that, any other transactions such as buying, selling, assigning additional nominees, etc come to a standstill. The Maharashtra Co-operative Societies Act 1960 in section 21A states that – If the Registrar is satisfied that any society is registered on mis-representation made by applicants, or where the work of the society is completed or exhausted or the purposes for which the society has been registered are not served, he may, after giving an opportunity of being heard to the Chief Promoter, the committee and the members of the society, de-register the society. What this means essentially is that the Registrar follows a due process before deregistering a society.

What is the process of deregistration?

  1. The registrar communicates to the society that it is found lacking in adherence and gives them a chance to present their case by offering an interim directive to them before taking a final decision of deregistration.
  2. If the Registrar doubts that its office has the correct addresses of every member or if the society is too large that reaching out to everyone is not practical, he gives out a public notice of the proceedings of the de-registration so that such a notice is considered as an official communication to the Chief Promoter and all members and no objection can be raised legally by the society on the grounds of ‘failure to communicate’ from the Registrar’s office.
  3. As a follow-up, the Registrar may appoint an Official Assignee to oversee the remaining procedure. The job of the Official Assignee is to acquire/realise the society’s assets and liquidate the liabilities. He does this within one year from the date that he is assigned the society’s books, records, property, assets, etc. The Registrar could extend this time-limit but it is not to exceed a period of three years.
  4. The Official Assignee is compensated for his services as prescribed by the Registrar but is not entitled to any allowance beyond the prescribed amount decided by the Registrar.
  5. The Registrar and Joint Registrar of Co-operative Societies and no other officer below these have the right to deregister any society.
Approximately only less than 10% of the total number of registered societies face such extreme measures from the government. But even so, there is a provision in the laws to counter such decisions and if the society finds substantial grounds to disagree with the Registrar, have the right to approach the court for further redressal. In some cases, the society has approached the court citing that the Registrar did not give them a legal notice for deregistration and therefore they were not allowed to be heard or present their case. The law does give the following provisions in the Cooperative Societies Act
  1. No suspension or cancellation may be made by the Registrar until he has given the society a chance to be heard. The Registrar may even suspend registration in case of offences not too grave and even if no rectification has been observed by the society, the deregistration is considered final.
  2. The managing committee of the society is responsible for submitting audit reports as that is found to be the leading cause for cancellation. Other than that, any society registered under fraudulent documentation or misrepresentation is sooner or later bound to be deregistered when the Registrar suspects wrongdoing.

POSTED ON August 9, 2019

Refusal of Membership in Cooperative Housing Societies

Say you have found your dream home in a housing society, followed the application procedure with due diligence and have already started picking out furniture for your new home. Much to your chagrin, the society denies you a membership. Do they have the right to do that? Let’s understand the scenarios under which you can and cannot be refused membership.

Who is eligible to join a co-operative housing society?

Co-operative Societies Acts and model bye-laws have clearly defined the eligibility of membership which state that any individual who is competent to contract under the Indian Contract Act, 1872 (which essentially means someone who is of legal age and a sound mind) is allowed to join a housing society.

What are the grounds for refusal?

If the society does a background check and finds that you have a criminal history and have exhibited sketchy and suspicious conduct, they may refuse membership. If that’s not you, you can produce legitimate character certificates from authorities. The same may be the decision if there is a stay order on that society. One common ground for refusal is that there are simply no units to assign to the member, in which case the applicant can do little. To quote from a decision cited by the larger bench in a legal case – “In our opinion, a society can, on valid ground, refuse membership, where the new membership will be prejudicial to the interest of the society. For example, if in spite of having the requisite qualifications based on the bye-laws of the society, a person who is guilty of an offence involving moral turpitude applies for admission, the society can be justified in refusing to admit such a person as a member on the ground of protection of the existing members of the society. Similarly, if it appears from the bio-data supplied by the prospective member that the income of such person is so meagre that he will not be able to even pay the monthly maintenance amount payable by the members of the society or future maintenance, the society, to avoid unpleasant situation and impediment in smooth running of the society, may decide to refuse admission.” You can always confirm your financial capacity with the necessary proofs. However, there should be no discrimination on the basis of race, gender, religion or social status in allowing membership. Some societies have been taken to the court by applicants when they have denied membership due to their religious beliefs or caste/community discrimination. Flimsy and prejudiced reasons are invalid and not recognised by the Indian Constitution.

What should be done if you are refused membership?

There is a definitive procedure with an application form which the prospective member has to submit along with an entrance fee, tendering of shares, property declaration, etc. The Secretary is required to review and respond within 7 days of receiving the application and communicate to the member if any for further documentation is needed for review. All the paperwork is then presented to the Managing Committee for its perusal and final decision. Once you apply for membership in a housing society and they decide to refuse membership, they are required to communicate the decision with reason within fifteen days of the date of the decision, or within three months from the date of receipt of the application for admission, whichever is earlier. If there is no response, it means that you have been accepted as a member. The Maharashtra Co-operative Societies Act 1960 states that – No society shall, without sufficient cause, refuse admission to membership to any person duly qualified under the provisions of this Act and its bye-laws. If the society refuses to accept your application and payment, you have the right to apply to the Registrar u/s 23 (1A) in the prescribed H-1 form and payment for membership. The Registrar forwards the application and the amount to the society (within thirty days from the date of receipt) and if within 60 days (from the date of receipt of such application and the amount ), the society doesn’t communicate a decision, you are accepted as a member. In essence, this means that the society is required to respond appropriately and in a timely manner to the applications and provide members with payment acknowledgements as well. In cases where there is an explicit written refusal from the society and if you are not in agreement with their decision, you can approach the Registrar with an appeal. But note that the decision of the Registrar in such matters is final and he communicates his decision to the society as well as the applicant within 15 days. Such appeals from the applicants are usually addressed by the Registrar within three months of receipt. If not, the Registrar records and communicates the reason for delay.

POSTED ON August 6, 2019

Withdrawal of Membership in Housing Societies

Most people become part of a co-operative housing society with the intention of becoming a lifelong member. But what happens when a member decides to opt out of the membership, transfer ownership or passes away? A membership can be considered terminated under the following circumstances:
  1. Upon resignation: If a member decides to resign and his resignation is accepted by the society, his membership is considered withdrawn and ceases to exist. However, the original member is required to give a three-month notice period to the managing committee and give a written request, explaining his reason for withdrawal. An associate member, on the other hand, can resign at any time (in writing) without a notice period. In both cases, the society duly reviews the resignation after an internal discussion. Cessation of membership does not absolve the member from any financial or other liabilities he has as a member. No society accepts resignation from a member unless they have paid their dues to the society in full. The member who resigns is still entitled to be paid back his share value from the society. However, the law puts limitations on the maximum amount to be refunded in a period of one year.
  2. Transfer of shares and interest in the capital/property of the society: If the member decides to transfer his ownership shares in the society to another member or a new person, his membership is considered terminated. However, such a member is required to give a 15-day notice to the MC of his intention along with the prescribed form, consent of the person to whom the shares are being transferred and a set of documents required to be produced by the bye-laws of the society.
  3. Upon the society’s dissolution: If the society is dissolved, terminated or if its registration is cancelled (for whatsoever reasons), the individual membership also comes to an end.
  4. Upon death: When a person passes away, his membership to the society ends. However, since the members have the right to nominate others to whom the ownership is granted in the event of his death, his shares are legally transferred to that nominee. The amount is to be refunded by the society according to the bye-laws or by the agreement made between the inheritor and the society, but usually, it is within 6 months after the death of the original member.
  5. Upon expulsion: If a society decides to expel the member due to internal conflicts, repeated breaches by the member with respect to defaulted payments, breaking of bye-laws, involvement in criminal conduct, or other irreconcilable differences that qualify for the expulsion of membership under the bye-laws, his membership is considered terminated. However, such a decision has to be made in agreement with the other members and the case of expulsion has to be presented to the Registrar, who then investigates the matter and hears both the parties. If and only if the Registrar approves the expulsion, the membership can be terminated.

When is an associate membership terminated?

An associate member ceases to hold membership in the event of death or resignation. However, even if the original member’s membership has ceased to exist, the associate member still continues to remain the member if he/she holds ownership/title in the share and property of the society.

When is a nominal membership terminated?

If the original membership ends due to death, resignation, expulsion, the person who is a nominal member also ceases to be the member. If a tenant or sublettee lives in the original member’s residence under a tenant’s agreement, his nominal membership ends at the end of the expiry period of the agreement or if the original member (owner) decides to terminate the agreement. Things to remember:
  1. All decisions regarding resignations, expulsions, and other reasons for termination are to be officially recorded during general meetings in the form of minutes of the meeting.
  2. All of these correspondences have to be communicated between members and committee members in the form of official written correspondence.
  3. The committee of the society is expected to remove from its register the name of the member whose membership is terminated due to any reason.
  4. If the society fails to do so, the Registrar may take the necessary action and make it mandatory for the society, a decision it has to comply with.
It should be pointed out here that the cases of resignation or expulsion are few and far in between. Most memberships are passed on from generations to generations as nominees inheriting the ownership. As such, housing society memberships are a beneficial commitment. However, under any pressing circumstances if there needs to be the cessation of membership, both parties, i.e the member and the managing committee should follow the bye-laws/regulations specified in societies act with respect to refund and transfer.

POSTED ON August 1, 2019

RERA or Consumer Court: How to Seek Legal Remedy Against a Builder

For most of us, real estate is the single largest financial transaction in our lifetime. It’s expensive, complicated – and there’s lots of potential for grievance: the builder’s work could be shoddy, there may be project delays or hidden charges, and much else. Luckily, the government has ensured proper redressal machinery at the local, state and national levels. In fact, there are four bodies you could approach for relief against a builder. The most well-known of these is the Consumer Court, but you may also be familiar with Real Estate (Regulation & Development) Act (RERA), which also looks into such matters. So let’s clear it up. Before we go there, though, here are the reasons you can make a complaint against a builder.

Reasons to File a Complaint Against a Builder

  1. If the builder has erected poorly constructed buildings;
  2. If the builder has not handed over the residence with layout, specifications and structure that was agreed upon;
  3. If the builder has not constructed or provided you with parking space in the premises;
  4. If the builder has charged you with a higher amount for the residence than the one agreed upon;
  5. If the builder levies any hidden charges on you which you were misled into believing did not exist;
  6. If the builder has not provided you with the receipt against the payment you made or not given you a valid sale agreement in spite of advance payment;
  7. If the builder has cancelled or stalled the project without any legitimate explanation or reason;
  8. If the builder has not constructed a water tank, proper ventilation and lighting in the building;
  9. If the house is not delivered to you within the stipulated time limit. Usually, the time period is two years from the date that the construction commences;
  10. If the builder has not created a housing society and not handed over the reins to it;
  11. If the builder has not obtained the required permissions from relevant authorities such as the municipal corporation, water authority, etc;
  12. If the builder has not issued to you the copies of all the required documents such as NOC, OC, POA, approved plans by authorities, development agreement, non-agricultural permission, among others;
  13. If any fraud such as bribery, embezzlement, etc has been committed by the builder, real estate agent, or any relevant person in the booking, buying or selling of the property.

Consumer Court vs RERA vs CREDAI: Which body is applicable?

Consumer Court

Consumer courts are country-wide, with experienced judges and have heard thousands such cases over the past three decades. This is why the consumer courts are preferred when seeking legal relief against a builder. However, matters move slowly and such forums only award compensation or refund, which is narrower than what can be done under RERA.

Filing a Consumer Complaint

While you can go to consumer court on your own, it is recommended that you hire a property lawyer. The process would be as follows:
  1. Send a well-written legal notice to the builder and inform him of the stipulated time frame within which you expect a response;
  2. Wait for a response from the builder. If he wilfully compensates, the dispute ends. If not, follow the next step.
  3. Approach the Consumer Court and file your petition, which should contain precise details of the builder, yourself, builder-buyer agreement, proof of payment, your particular grievance, property details, and the type of compensation you are seeking
  4. The court fee ranges from Rs 100 to Rs 5000 depending upon the value of the claim.
The consumer court you must approach depends on the valuation of the claim.
  1. If the value of the property/compensation sought is less than Rs. 20 lakh, you can approach the District Consumer Dispute Redressal Forum.
  2. If it is between Rs. 20 lakh and Rs. 1 crore, you can approach the State Consumer Commission.
  3. If it is above Rs 1 crore, you should approach the National Consumer Dispute Redressal Commission.

RERA

RERA appellate authorities have been set up in most Indian states. If your state’s RERA authority is in place, it may make sense to approach it before going to consumer court. The big reason for this is that cases need to be decided within 120 days. Moreover, RERA takes into account consumer interest and project completion dates, in addition to awarding compensation.

Filing a Complaint Against a Builder with RERA

  1. Visit the State Portal of RERA
  2. Find the Complaint Registration section and input the details of your grievance
  3. You are also required to enter your personal details and asked to attach evidence or documents to support your claim
  4. Fees usually start from Rs 1000 but can be Rs 5000 for an Adjudicating Officer.
The last option is Confederation of Real Estate Developers Association of India (CREDAI), but the builder in question should be registered with this organisation.

POSTED ON July 30, 2019

How a 70-year-old Community in Mumbai Ensures the Happiness, Health and Safety of its Residents

The Mysore Cooperative Housing Society is a landmark colony in Mumbai’s Chembur area. An oasis in the crowded city, it comprises over 100 bungalows and many lush green spaces across several acres of land. This is no antidote for all of Mumbai’s problems, of course. Like all large communities, it also needs to deal with the growing footfall at the gate, the threat of water-borne disease and much else, particularly given that the majority of residents here are senior citizens. Jayaram Sharma, who has been the Chairman of the society for four years and has lived here since the 1960s, discussed with us the various ways in which the 10-member management committee ensures a healthy, secure and happy community.

The Management Committee, Mysore Co-operative Housing Society

What is the role that the management committee plays at The Mysore Co-operative Housing Society?

The majority of residents here are in their sixties and typically live alone. Therefore, the management committee’s job is to provide every assistance to ensure their lives run smoothly. To give you a few examples of what we do:
  1. The housekeeping staff cleans common areas regularly and are also trained on waste segregation;
  2. We maintain gym and yoga facilities and encourage our residents to leverage these for better health;
  3. Each house within the community has a water sump to battle water scarcity; we offer tank cleaning facility twice a year;
  4. We arrange regular pest control activities to keep mosquitoes and other insects at bay;
  5. The last Saturday of every month is dedicated to a community gathering with snacks and music;
  6. We have provided an Optical Fibre-based connectivity to each house, which means residents get free unlimited internet access.;
  7. We also have a wet waste management system that is used to compost green waste.
All of this is done at a very low maintenance charge.

What measures have been taken to increase security?

There are about 24 CCTV cameras installed across the premises. To ensure foolproof security, we regularly monitor them to identify any abnormal activity and take necessary action. Each home has an intercom facility. In case of an emergency, the residents can press 1 and get in touch with security instantly. Slip-resistant walkways in the society gardens make an ideal hangout place for the residents Also, our society is surrounded by lush green gardens with walkways for the elderly to walk and jog. There have been instances in the past when the residents have tripped or slipped while walking around. In order to avoid this, we have installed rubber tiles to offer a slip-resistant experience.

What made the committee feel the need for a solution like MyGate?

With an ever-increasing footfall of unidentified faces at the society main gate – cab, taxi and rickshaw drivers, and other household staff – security is our primary concern. We were looking to adopt a system that could help us with better visibility as to who is entering the gate and being allowed access on a daily basis. Broadcasting communications across the society members was another area of concern as most of the announcements would happen on WhatsApp and residents would tend to miss. We are leveraging MyGate’s Notice Board feature to avoid any loss in translation. Additionally, we were looking to integrate some kind of technology with existing CCTV cameras that would allow easy entry for vehicles with automatic boom barriers. This is where we find MyGate’s ANPR feature extremely helpful and our discussions to implement it are in the final phase.

What are the challenges you face as a member of the committee?

In a society with our kind of demographics, the biggest challenge is bringing about a behavioural shift – whether it is the residents who are used to a certain kind of lifestyle for decades and prefer it that way or the security guards who are accustomed to saluting familiar faces and letting them walk in and out of the society without questioning them. In such an environment, trying to introduce a modern system requires a radical shift in mindset. But still, we are off to a good start and with user-friendly, intuitive solutions like MyGate, we will arrive soon!

POSTED ON July 29, 2019

Everything You Need to Know About the Sinking Fund

When you are handed your society maintenance bill every month, you may have noticed an item which usually makes up around one-third of the total charges and is known as Sinking Fund. What does it really mean and why is it charged every month? Think of it as an investment that you are making every month in insuring your residence will be taken care of in the long term when the need arises to rebuild or construct it due to damage and dilapidation. Let’s understand the why, the how and the how much of a Sinking Fund in detail.

What is a Sinking Fund?

In general parlance, a Sinking Fund is money set aside in a separate account to pay off a debt, a way to generate funds for a depreciating asset, to pay off a future expense or repay long-term debt. It is a financial technique of ensuring that a monetary lack does not arise causing any hardships in case of insufficient funds. In other words, it literally saves an organized legal entity from ‘sinking’ in debt.

How does a housing society use its Sinking Fund?

With respect to co-operative housing societies, a sinking fund is to be generated in specific ways and used for a particular purpose. While a housing society is expected to set aside other funds such as Reserve Fund, Repair and Maintenance Fund, Education and Training Fund, a Sinking Fund is to be utilised when structural repairs are needed. When a reconstruction/alteration, heavy repairs or additions need to be carried out (with inputs, guidance and opinion of the Architect), the Sinking Fund kicks in as a go-to fund. Such decisions are discussed, negotiated and approved during general body meetings after inviting feedback and opinions from the members of the society.

How does a housing society generate a Sinking Fund?

It is mandatory and highly recommended that a housing society create a Sinking Fund, which it can do by collecting financial contributions at a fixed rate from each of its members on a monthly basis and then accumulating it over the years so that a substantial amount is generated. It makes sense to start Sinking Fund from the time that the society is incorporated and occupied because even though a new building is sturdy and in good standards, yet as time rolls by it falls into relative degradation. Thus a Sinking Fund collected over a good number of years comes handy for structural repairs.

How does a housing society invest its Sinking Fund?

It takes a sizeable number of years for a new building to require reconstruction. Thus a Sinking Fund has a long time to grow through the way of a smart investment policy that is not only beneficial in the long-term but also reliable in general. The Registrar of your district or area instructs you, at the time of registration, to open your society’s bank account in a co-operative bank. Each state has its specific list of state co-operative banks. For example, in Maharashtra, the banks are Maharashtra State Co-operative Bank Ltd and Bombay District Central Co-operative Bank Ltd. After consulting the financial auditor/expert or bank manager, you should decide the best option for your society’s Sinking Fund investment. Even though you may open accounts with nationalised or urban co-operative banks with prior permission from the Registrar when it comes to day to day transactions. The bye-laws of Maharashtra state that – “A Banking Account shall be opened by the society in the nearest State or District Central Coop. Bank or its branch or in any scheduled co-op Bank… investment in long-term should be made in the District Central Co-operative Bank only.” Such a law has been passed so that the co-operative bank sector can get the necessary boost and can compete with private or nationalised banks. If you need to utilise the Sinking Fund for structural repairs, you need to undergo an approval procedure from the Registrar after devising redevelopment plans with the help of an Architect.

How is the Sinking Fund calculated?

To quote the bye-laws, “The Sinking Fund at the rate decided at the meeting of the general body, subject to the minimum of 0.25 per cent per annum of the construction cost of each flat incurred during the construction of the building of the Society and certified by the Architect, excluding the proportionate cost of the land.” However, the process is not always black and white. Each residence is sold at a different price, higher or lower, depending upon a variety of circumstances. Also, in any given society, there may be 2,3,4 BHK apartments, some buildings may be brand new construction while some wings of the same society may be constructed over an existing structure. Thus the actual cost incurred in making every flat may not be the same in every incident. Therefore it is unfair to charge every resident with a contribution derived from the same fixed rate on different buildings. At times, the builders are also unwilling to give out the actual cost of the construction as they sell the residential unit at a higher price than the original amount it cost to build it. Thus the price a customer pays for flat proportionate land is not always based on the actual. One way to determine the right rate is to calculate the rate of per sq. ft. of reconstruction of the flats, as that will remain the same for all flats if they were to be reconstructed. This will ensure the exact amount that the society will need to collect as a Sinking Fund if the actual reconstruction were to take place in the future. However, it is imperative to arrive at this amount after consulting an Architect or a Valuer of the property, i.e take professional help to determine the valuation of the construction. The experts may do so by factoring all components including rate per sq feet, valuation of shops, common premises, etc. The amount to be collected from members for the Sinking Fund should be revised every five years by following the same valuation procedure.

POSTED ON July 26, 2019

GST Applicability to Housing Societies: 5 Important Questions & Answers

The subject of GST confuses most housing societies and their members. Every week, we receive a number of GST-related queries on how GST is applicable to co-operative housing societies. Therefore, in this article, we have curated the five questions we’re most commonly asked. Let’s begin…

1. Is GST applicable to maintenance charges paid by residents?

Maintenance charges up to an amount of Rs. 7500 per month, per member, are exempt from GST. Earlier, the exemption was available on a monthly maintenance charge of up to Rs. 5000 per member. The limit was increased to Rs. 7500 with effect from 25th January 2018.

2. When does a housing society need to register for GST and pay GST on maintenance charges?

A housing society is required to get a GST registration if its aggregate turnover for a financial year is more than Rs. 20 lakh. Also, in such a case, GST is payable only if the society collects a monthly maintenance charge of more than Rs. 7500 per member. Societies with an aggregate turnover of Rs. 20 lakh or less are exempt from GST – irrespective of whether monthly maintenance charges are less or more than Rs. 7500 per member. Find out if your society is exempt from GST
Annual turnover of a housing societyMonthly maintenance chargeGST
Rs. 20 Lakh or less Rs. 7500 or lessExempt
More than Rs. 7500Exempt
More than Rs. 20 LakhRs. 7500 or lessExempt
More than Rs. 7500Applicable

3. When is a housing society entitled to take Input Tax Credit (ITC)?

Housing societies are entitled to take ITC of GST paid by them on capital goods – generators, water pumps, lawn furniture etc. – other goods – taps, pipes, other sanitary/hardware fillings etc. – and input services such as repair and maintenance.

4. How does the GST exemption work if a person owns two or more flats in a housing society?

In such case, GST exemption of Rs. 7500 per month, per apartment, shall be applied separately for each apartment owned by him. For example, if a person owns two residential apartments in a society and pays Rs. 15000 per month as a maintenance charge (calculated at Rs. 7500 per month, per apartment), the exemption from GST shall be available to each apartment.

5. How is GST payable in societies where maintenance charges exceed Rs. 7500 per month, per member?

In case, for a society, the maintenance charges exceed Rs. 7500 per month, per member, the entire amount is taxable. Let’s understand this with an example. If the monthly maintenance charges for a housing society are Rs. 9000 per member, the GST @18% shall be payable on the entire amount of Rs. 9000 and not on Rs. 1500. * Refer to the latest GST circular issued by the Government of India, Ministry of Finance Department of Revenue (Tax Research Unit), New Delhi.

POSTED ON July 26, 2019

Rights of Associate Members in a Cooperative Housing Society

Let’s say if you are not the primary owner of your residence and are a spouse, mother, father, son, daughter living in a housing society along with your family (or even alone). Do you still enjoy rights granted to the other residents? The answer is yes. As long as you hold joint ownership of your residence in a housing society, and if your name appears on the society’s share certificate, you are liable to receive all the benefits of membership. The rules are simple, but you need to be aware of certain technicalities that entail an associate membership. An associate member has similar rights in a co-operative housing society as the original member, albeit there are some exceptions and written consent of the original member is required with respect to certain actions. Let’s understand the basic rights of an associate member by defining the term. According to Maharashtra Co-operative Societies Act 1960 – “Associate member” means a member who holds jointly a share of a society with others, but whose name does not stand first in the share certificate.” This makes him a legitimate member of the society, if only after the original member. The Associate Member is admitted into the society after filling a prescribed form and paying a Rs 100 admittance fee. Model bye-laws clearly state that an associate member shall have any rights or privileges of an Active Member with some exceptions in the voting procedure. More on that later.

An associate member has the right to:

  1. Get a copy of the model bye-laws of the society. This can be obtained from the Secretary of the society.
  2. Inspect the books of the society without being charged any money; this includes books, registers, documents, the last audited annual balance sheet, the profit and loss account, a list of the members of the committee, a register of members, the minutes of general, annual or special meetings, among others. These can be obtained from the Treasurer or Secretary and must be done if you are investing a fraud or wrongdoing.
  3. Occupy the flat/residence after obtaining the consent of the Original Member and written intimation to the Society, all of these procedures are to be followed as decided by the Managing Committee.
  4. Resign from the membership of the society at any time as opposed to the original member who needs to give a three-month notice period to the society. However, there is a specific procedure to be followed. An associate member can resign any time by writing a letter of resignation to the Secretary of the Society, via the Original Member, with whom he/she has the joint ownership in the society. The Secretary presents the request for resignation by the associate member (duly agreed upon by the original member) in the next committee meeting for acceptance. The Managing Committee’s decision is then communicated to the Original Member and Associate Member within 15 days (although there is mostly no resistance against such resignations by the MC) But for whatsoever reasons, if the resignation is not approved, the reason is also conveyed to the member within the same timeframe and the same is recorded in the Minutes of the Meeting.
  5. Right to nominate another in the event of death. The Associate Member of the Society has to apply with a prescribed form to nominate a person (can be more than one) to whom the whole or part of the shares/ interest of the Society should be transferred in the event of his death. The Secretary’s acknowledgement is considered to be an acceptance of such nominations. The same can be revoked and revised too.
  6. Continued membership. Even if the Original Member whose name stands first in the share certificate, ceases to be the member (due to death, resignation, etc.), the associate member still continues to be the member of the society as long as they hold title and interest in the property jointly with the member.
  7. Has all the other rights as the member, such as the right to attend general/special/annual body meetings, the right to transfer shares, exchange and sublet apartments/housing units, the right to voice their opinion in the general meetings about maintenance charges, other relevant issues, file grievances against other members who are breaching the byelaws, etc.
  8. Has the right to file official complaints (along with the Original Member). Depending on the misconduct or offence that the associate member faces in the society (from co-residents, committee members, builder, etc.), he/she has the right to approach authorities for remedial measures, including the Registrar, Co-operative Court, Civil Court, Municipal Corporation, Police, among others.
  9. Has the right to be part of the affairs of the society. Just like the original member, the associate member has the right to participate in any events, celebrations, drives, etc. organized by the society and has equal access to all the common spaces, parking lot, garden, gym, etc.

Does the Associate Member have election rights?

Some confusion persisted in the past regarding election rights of an associate member. However, based on the guidelines published for election procedure by Maharashtra State Co-operation Election Authority, as well as provisions in the Maharashtra Co-operative Societies Act along with a housing manual published by the Registrar, the rules with respect to voting and contesting rights of an associate member are clearly defined. No matter how many members live in one household, every house gets one vote in the society’s election as per the rules. When it comes to voting, where there is joint ownership, the person, whose name stands first in the share certificate (original member), if present, has the right to vote. But in his absence the person whose name stands second (associate members), and in the absence of both, the person whose name stands next, who is present and who is not a minor, will have the right to vote. Some housing societies operate under a fallacy that once a member pays Rs 100 fee to be admitted as an associate member, he/she automatically gets the right to vote or stand as a candidate in the election. Such is not the case. The original member by default has the right to contest in the election. However, not every man or woman of the house has the time or inclination to take on the additional responsibility of the society’s management. If the original member does not want to contest the election, with his written consent or no-objection letter, the associate member can stand as a candidate in the election and be part of the managing committee, provided his name follows the original member in the share certificate. If a member is not listed in the share certificate, he/she has no right to vote or contest an election. To quote directly from a housing societies manual published by the Registrar “ In case the associate member gets elected as a committee member, he becomes office bearer also. A person, who became an Associate member by paying only admission fee, shall not get any rights in voting or election behalf the original member. It is necessary for the Associate member that his share/name is included in the ownership of property for holding share jointly.”

POSTED ON July 24, 2019

10 Ways to Make the Bathroom Safer for The Elderly

The bathroom is a dangerous place. Over 80% of all falls occur there, and the elderly are most likely to be the victims. Particularly due to the presence of sharp objects (faucets, for example) in the bathroom, these falls can also be very dangerous. While there are standards in place for baby-proofing the home, there aren’t any for making the bathroom safer for the elderly. However, there are several steps you can take to do so. Here are a few of them: 1. Install grab bars Most Indian bathrooms are fitted with towel bars, but these cannot endure body weight. Instead, install grab bars strategically (the shower area and the toilet seat) to help support balance. Also, avoid the ones with the gloss finish to ensure they’re slip resistant. Bolted on bars are preferred over suction cup bars for durability. A tension pole is a good alternative, in case retailers in your area do not have grab bars. 2. Use a shower chair For an elder with difficulty in balancing and standing for long periods of time, shower benches are an ultimate stability tool. A quality shower chair comes with rubber tips on the legs to prevent sliding, while others have armrests, suction cups and height adjustment options. 3. Deploy non-slip mats A bathroom is a slippery area. Stepping on to a towel while heading out of a shower is even worse – the towel can easily slide away, leading to a fall. To avoid this, get non-slip mats and adhesive strips. The mats must be placed at the entrance of bathrooms, in front of toilets and right outside to the shower area. Slip resistant tiles are costlier, but, of course, safer as they are placed across the bathroom floor. 4. Raise the toilet seat Simple tasks such as getting on and off the toilet seat can be challenging for the aged. Due to lack of strength and balance they may have difficulties lowering themselves down to sit on a low seat and rising up to a standing position. Elevating the height of the toilet seat ensures that their knees remain straight and stable, thereby reducing the risk of falling. 5. Store toiletries within reach Elders should be able to access all toiletries without having to stretch or bend. Install a cabinet by the shower area and incorporate a soap dispenser on the wall of the shower. This way, you won’t have to worry about shower gel bottles or bar soaps slipping from their hands during use. 6. Improve lighting Is the pathway from the bed to the bathroom dark? A poorly lit pathway can cause severe accidents. Also, overhead lightings are a bad idea as they cast shadows and do not illuminate certain spaces. A better option is to add multiple lights so that all areas of the bathroom receive light uniformly. Additionally, use contrast colors to demarcate different sections of the bathroom. Instead of high-gloss vanishes, choose matte since former may cause a confusing glare. 7. Outward swinging bathroom doors Where does your bathroom door swing to open… outward or into the bathroom? Such a minute detail but makes a lot of difference in case of medical emergencies. Doors that swing outwards will always allow caregivers easier access in the event of a serious fall against the door. 8. Install a bathroom phone A waterproof phone in the bathroom can be considered in case an elder lives alone or is frequently home alone. 9. Consider labelling products The visual perception of the elderly is often impaired. Labeling bathroom products, particularly medication, can make it easier for them to find what they’re looking for. 10. Eliminate clutter If you live with an elderly person, you must declutter and place shower gels, drugs, toothpaste, lotions, and other bath items in places where they belong. More importantly, get rid of dirty, unused rugs and any products that are never used, and keep the shower area clean and dry.

POSTED ON July 24, 2019

Role and Responsibilities of a Treasurer in a Housing Society

In a housing society’s affairs, the role of a treasurer cannot be undermined. The Treasurer is the backbone of the entire financial framework of the society and accountable for any monetary mismanagement or fraud. In this article, we define the functions of a treasurer for a clear understanding of his scope of work.

Who is a treasurer? What kind of a treasurer should a housing society pick?

A treasurer is the elected office bearer of a housing society who is responsible for financial and legal compliances, assets and liabilities and whose primary job is accurate management and oversight of a society’s financial transactions/undertakings. A society should elect such a person for the role of a treasurer who is financially literate, has a working knowledge of financial and accounting systems and has skills such as attention to detail, meticulous record-keeping habits and sound ethical values.

What does a treasurer do in a housing society?

Often the roles of a Secretary and Treasurer are confused by some people. Such misinterpretation may also occur if one reads the model bye-laws of a State’s housing society in which most financial management duties are assigned to the secretary. (Note that the bye-laws always assign these roles to ‘Secretary’ or ‘any other person designated for the task by the MC – which means the Treasurer). Also, the role of a secretary is administrative and communication-oriented in nature, while the treasurer is the one who is actually responsible for carrying out finance-related tasks.

Financial Management

The Treasurer is required to:
  1. Deposit all the monies received by the society to the bank/depository and issue receipts to the payers.
  2. To keep a record of member’s contributions towards maintenance, reparation, common funds etc, to bring to the Secretary’s notice any late payments or consistently defaulted payments, and to implement a functional due collection procedure that the Secretary/committee members can follow.
  3. Pay all the vendors, service providers, etc through cheques, bills of exchange, etc. by being the signatory of the cheques or (transferer of online payments).
  4. Reconcile member’s ledgers, passbooks, statements, bills received from depositors with respect to the general accounts ledgers and have them reconciled annually too.
  5. To compute maintenance charges, parking charges, premium payable by the transferor, and to compute the contribution amount of the members in any other charges, verify dues by members and interest payable by defaulters.
  6. Create a financial transaction policy when paying the vendors and creditors petty cash policy for internal expenses, cash withdrawal policy, etc to be followed by the MC

Budgeting

  1. To prepare an annual budget of the society
  2. Prepare the budget for an ongoing or future activity, such as festival celebrations, repair and renovation, etc.
  3. To prepare a revised financial forecast based on the actual expenses on a project or for the overall year

Accounting/Book-keeping

  1. To open and manage the society’s bank account
  2. Keep a detailed and true account of all of society’s financial transactions
  3. To manage and make timely entries in all account books, manage cash flow, securities, vouchers, receipts, invoices counterfoils, bank statements.
  4. To ensure that petty cash doesn’t go over Rs 5000 and any amount over Rs 1500 is paid by cheque
  5. To maintain audit memos and prepare audit rectification reports in response
  6. To produce society’s accounts before the external Accounts Auditor
  7. To prepare monthly, annual account statements and the society’s profit loss balance sheet
  8. To make available any financial records that members want to inspect and to also produce the same for the Registrar, Managing Committee or other government authorities

Asset Management/Investment

  1. To ensure that there is an updated inventory and financial maintenance/reparation records of all fixed and moveable assets of the society
  2. To compute insurance on assets and pay regular premiums
  3. To advise the Managing Committee on where and how to invest profits or surplus and alternatively create investment guidelines/policies keeping in mind the suitability of the investment with respect to the society’s needs, considering risk factors, society’s financial capacity, and calculating ROI effectively

Fundraising

  1. Recommend and create fundraising strategies for the society
  2. To set forth rules and regulations on how the funds should be utilised
  3. Ensure compliance of fund utilisation as predetermined by policy/plan, observe and report any wrongdoing to the Managing Committee

Compliance

  1. To ensure that the society is compliant with the guidelines of the financial institutions such as co-operative, nationalised banks as well as RBI
  2. To stringently review and adhere to any legal, contractual or builder-related compliances that impact society’s funds and financial management
  3. To be well-versed with the society bye-laws so as to be compliant with internal or external rules that directly affect financial undertakings by members, vendors or the society
A treasurer is also allowed to appoint a sub-committee of accountants or finance experts from within the society and supervise their work, however, he remains answerable to the managing committee eventually.

POSTED ON July 24, 2019

The Zero-Hardware Replacement for The Housing Society Intercom

Intercom systems are costly, outdated, and, yet, everywhere. The reason for this is that they’re assumed to be part of the package when buying a home. The reality, as we all know, is that it’s a dreaded device that usually goes unanswered. Why? Because the residents at most housing complexes are aware of the reason for the call and know that there will be no change in outcome whether or not it is answered. If there’s a person asking for them at the gate, they will be let in regardless or the visitor will eventually call. But still, a lot of money is spent on the intercom, first on installation and later to maintain it. In this article, we will discuss the case a replacement devised by the team at MyGate that makes the intercom relevant once again and requires no hardware.

The Cost of An Obsolete System

Wired systems are more of a hassle than a smart solution for the time that we live in. At around Rs. 5,000 to Rs. 7,500 for installation of each device, the system, which is usually taken for granted, ends up costing tens of lakhs and takes two to three weeks to go live. As if that isn’t enough, housing societies typically end up shelling out 5-10% of the original cost on an annual maintenance fee! All while there’s a system that can get the job done at no cost whatsoever.

The MyGate Replacement

As part of MyGate’s app-based security and community management solution, residents get complete access to a feature called ‘Connect With Residents’, which is a flat-wise directory of all the residents in the community. Simple as it may seem, it is hugely beneficial. Here’s why:

Benefits for Residents

Always connected: Whether the residents are home, at work or on vacation, they can always stay connected to their home with the MyGate app. Two numbers can be listed to ensure that, in case of an emergency, they can always be reached. Always within reach: Very often, the intercom goes unanswered because it is fixed to a certain location, whereas most people aren’t used to changing their position to answer their phone. With a mobile-based intercom facility, this goes away, too. Zero hardware: All residents are connected via the mobile app. To reach out to another resident or the main gate, all they need to do is scroll through the list of flats and hit call. There’s no need for a wired phone connection. Low Cost: There is no cost attached to the intercom feature, as it comes bundled with the MyGate solution, which currently makes life within a housing society more convenient for over 600,000 homes.

Benefits for Developers

Massive savings: At even Rs. 5,000 a device, the intercom system comes with a huge price tag, which would be justified if it were used. However, in most cases, the system is underutilised. The MyGate solution keeps everyone connected at almost no cost, with a much higher usage rate. Minimal set-up time: Instead of waiting three to four weeks to set up an intercom system, the eIntercom system can be set up – along with a host of security and community management features – in just a few days. The cost of communication are far lower than ever before. Given that the intercom was built for a time that has passed us by, it makes little sense to invest in such a system today. Learn more about the MyGate solution, used by thousands of communities across urban India.

POSTED ON July 23, 2019

Training Days: How We Ensure Over a Million Seamless Check-ins Per Day

MyGate is today at over 6,000 gates, processing a million entries for over 600,000 homes every day. Each of these million entries represents the valuable saving of time or effort in an increasingly chaotic urban India. As you can imagine, this is an effort on a mammoth scale. The MyGate app and our 500+ workforce spread across our cities are certainly at the forefront, but we’re by no means alone. Joining us on this journey are tens of thousands of security guards who define a major part of the experience for our users and each of their visitors. In case you’re wondering how they are able to operate the app, here’s a behind-the-scenes look at the training process for our guards.

Initial Training

Before our systems go live, each of the guards at the society receives in-person training from MyGate personnel over four to six days. In the month of June 2019 alone, over 800 such training sessions were conducted. We begin each training by explaining the purpose of MyGate and then move on to a demo of the guard device (note: this is a locked device on which only the MyGate guard app runs). Once the guards are familiar with its interface, we get started with the four main modules. These are interactive sessions conducted in smaller groups over two hours across the week. To ensure that guards are not overwhelmed by the information, we have split up the training into the following modules: Profile Creation, Approval & Pre-Approval Creation, Pre-Approval, Leave at Gate and Overstay Alert. At the end of the week, a test is conducted to assess the comfort level of the guards with the MyGate system. Until the guards do not clear this test to our satisfaction, our systems do not go live. In the past three years, over 55,000 guards have completed their training. The ones that do exceedingly well here receive certificates of appreciation. Certificate of Training awarded to a MyGate guard

Knowledge Monitoring & Re-training

For the bulk of the guards, this single training is sufficient, and it’s common for the majority of check-ins to be error-free from the first week itself. However, a single test can’t guarantee success. Therefore, our team also monitors guard performance on a regular basis. The first clue to inadequate guard performance is delays in the check-out process. In case we find that a particular society is checking out visitors, particularly delivery executives, after a significant delay, another training is immediately scheduled. But this isn’t the only reason we go back to retrain our guards. There are even instances when guards themselves have asked for another training because they are keen on learning more advanced features on the app or wish to improve their performance.

Encouraging Better Performance

The MyGate guard app has a simple interface and is as intuitive as any other app with a high usage rate. To ensure that guard interest remains high at all times, we have also gamified the app to some extent, with a monthly leaderboard. Every month, in each of our cities, the guards stand a chance to win a cash incentive as acknowledgement of their good performance under what we now call the SuperGuard Programme. Since its launch six months ago, we have noticed a significant improvement in guard performance across the board. A few of MyGate’s recent SuperGuards Of course, no training would ever be sufficient if MyGate didn’t make the job of the security guard easier, more interesting and more impactful. From the feedback we collect from them, we know that it does all three. And if there’s one thing that makes us happier than good feedback on the app from our users, it’s hearing about the MyGate experience from our guards – the most active users on our platform. It is they who ensure convenience and security over a million times each day for our users.

POSTED ON July 22, 2019

Types of Membership in Co-operative Societies

A member of a co-operative society is someone who applies for admittance into the society by purchasing shares in it and is eventually granted registration, membership and a residential unit to occupy. Let’s understand the six classes of membership in brief. 1. Original Member An original member is a person under whose name the membership exists (whose name is on the purchase deed) and is registered as a shareholder and allowed admittance into the society. He is the first point of contact for the society and his name is recorded as the primary shareholder on the share certificate. If there are any other members nominated after the original member, their names appear subsequently. After having purchased the residence (owning shares) in the society, he is considered an ‘Active Member’ if he attends at least one general body meeting in a period of five years, pays his maintenance charges and other society charges on time. 2. Associate Member An associate member is someone who jointly owns the shares/property in the society and whose name appears subsequently after the original member’s name in the share certificate. Associate members are admitted into the society after paying the admittance fee of Rs 100. Even though the ownership of the residence is not primarily under the associate member’s name, he/she has the right to occupy the residence after the written consent of the original member and (upon written approval) is also allowed to attend the general body meetings of the society. Associate members are usually the spouse, parents and children of the original member. An associate member can also vote and contest in the election of the housing society and if he/she wins, has the right to be the office-bearer in the Managing Committee of the society as well. Keep in mind that any associate member who only paid the admittance fee but does not have joint ownership in the shares/property of the society, cannot contest for the Election. As associate membership ceases to exist upon the death or resignation of the member. Even if the original member ceases to be a member anymore, the associate membership still holds value as long as they own shares/property in the society. 3. Nominal Member As defined by the model bye-laws, “Nominal Member” means a person who does not hold the right, title and interest in the property individually or jointly admitted to Membership as such after registration. A nominal member is not given any shares in the society. Usually, nominal members are sublettees, tenants or licensed caretakers (such as agents), etc. As the name suggests, a nominal member only has the right to occupy the residence and live in the society by following the bye-laws, but they do not have to attend general body meetings and cannot stand for election or vote and do not have a say in the workings of the Managing Committee but are treated as the rightful residents of the society. Admittance fee for a nominal member is also Rs 100. 4. Sympathizer Member A sympathizer member is somewhat of an honorary position and it is given to a member who shares the common goals, interests and objectives of the society. He has no right to vote and is not allotted any shares in the society. A sympathizer member is usually someone with a high degree of specialisation and responsible for guiding the society in his area of expertise. This could include architects, engineers, finance experts, housing experts, etc. They are not admitted as members with any residential or title rights. 5. Corporate Member A legally registered company can become a member of a society to provide accommodation to its employees. But the government dictates that more than 50% of total membership cannot be granted to a company in a housing society. The company’s MOA should have a clause that they can invest money in purchasing residences/shops in the society. The managing committee of such a society should have no more than one-fourth of company members in. Only if the company has invested funds in the society, they have the right to be a part of the committee and the appointed representatives have the right to vote as well. The company is also responsible for informing the society the change in residence occupants and pay monthly contributions to the society. 6. Minor Member A minor is eligible to enter into a contract and obtain membership of the society but only through his guardian or legal representative; when he is no longer a minor, he has the statutory right to participate in any sale transactions of the residence on his own. If the property is under the name of the minor and handled through the guardian, the society cannot undertake any legal actions regarding transfer unless a judgment is ruled by ‘competent court’.

POSTED ON July 22, 2019

Expulsion of a Member from a Cooperative Housing Society

Co-operative societies function on the concepts of mutual assistance and self-help and work towards common goals with harmonious living. If there are a few bad apples in the communal kitchen, the model bye-laws provide guidelines on how to get rid of them. It is important to note that the removal of a member from a co-operative society is not a pleasant or rewarding task and should only be used as a last resort when the case of harassment or non-compliance from the member’s side is extreme and cannot be remedied by peaceful means.

Under what circumstances can a member be expelled from a society?

Detrimental acts that endanger the safety or deregulate the workings of the society are grounds for expulsion. A member can be expelled if:-
  1. He constantly and persistently refuses to pay due charges to the society (despite reminders and notices)
  2. He intentionally gives false information to the society to mislead and deceive
  3. He misuses his residence for immoral, illegal or inappropriate reasons time and again
  4. He breaches the bye-laws or rules of the society consistently and if they are considered of a serious nature by the managing committee
  5. He has submitted false information at the time of registration or failed to submit essential information that could have potentially hampered his membership
  6. He is a non-active member who has not attended a single general body meeting for five years

What is the procedure for expulsion?

Model bye-laws of every state give guidelines for the expulsion of a member. We have referenced Section 35 of the Maharashtra Cooperative Societies Act 1960. Other state provisions also provide similar guidelines. The member has to be given a show-cause notice 30 days prior to passing a resolution to expel him. The agenda for the member’s expulsion has to be included in the general body meeting. In the said meeting, a resolution to expel the member in question is to be passed by no less than a three-fourth majority of the members who are entitled to vote and who are present at the general meeting. Before passing the resolution, the member must be given an opportunity to be heard and should be able to present his case to the general body. He can also choose to represent his case in a written format or take help of other members who may be willing to support his case. The proceedings of the meeting have to be presented to the Registrar of Co-operative Societies who will either approve or disapprove the resolution (within 180 days) after hearing both the parties and their presentation of the case. Such precautions are taken to make the expulsion procedure fair and transparent so that no one party can take advantage of any loopholes. Only after the Registrar approves the resolution, it is considered valid. The society cannot consider other prejudicial or discriminatory reasons to expel the member such as racial, gender or caste distinctions. If the member has evidence that the society is expelling him under false pretexts or personal prejudices, he has the right to approach the court and fight for his own cause. But this will eventually take a toll on both parties. The Registrar examines every aspect of the case, so the society is not allowed to modify its bye-laws to defend the grounds under which it hopes to expel the member.

What happens after the resolution to expel the member is passed?

On the date that the Registrar approves the resolution, the member ceases to be the member of the society legally. The forfeiture of shares also takes place simultaneously if the society decides the member should give up the right to hold shares to the society as well. The expelled member is not allowed to occupy the residence after the resolution is passed. He is expected to handover the vacant possession of the flat/house to the Secretary of the Society in a peaceful and conflict-free manner at the time and date that the society considers appropriate for the member. If the member refuses to vacate the residence, the Society has the right to send him a legal eviction notice. If the society has decided to simply expel the member and not forfeit his shares, the interest in the capital/property of the member in question and its value is acquired by the society and the same is to be paid to the member in three months after he hands over the possession of the residence or his eviction.

Are expelled members allowed readmittance to the society?

An expelled member is not allowed to return back to the co-operative until after one year has passed since his expulsion, except if the General Body of the society recommends such readmittance under any special circumstances that call for early reentry, but that too has to be approved by the Registrar of Co-operative Societies. Usually, if the member is at fault and has been a repeat offender, a peaceful dialogue or even a moderated confrontation is helpful in solving the problem. If however, the society believes that it has done everything within its power to make the member compliant, and yet there exists a clear and present danger from the member to the society, it should follow the expulsion procedure exactly as per the law and resolve the matter with help from the Registering Authority and not take any illegal actions on its own.  

POSTED ON July 19, 2019

Recovery of Dues in a Cooperative Housing Society

A common problem in housing societies (and quite a persistent one at that) is non-payment of dues by members. Defaulters often refuse to pay for common charges such as electricity, lift, water, service staff payments or even dodge overall maintenance charges. At times, the managing committee is found to be lax or apathetic to defaulting members and does not recover dues on time or in full. This is unfair to other residents who regularly pay their dues and they might have to bear the brunt of surplus charges that they are not responsible for. A member who has failed to pay dues for three consecutive months is considered a defaulter. In the past, the procedure to recover dues was to file a case in the cooperative court. However, after an amendment in Section 101 of the Maharashtra Cooperative Societies Act 1960, the procedure for recovery has been laid down definitively and has been handed over to the Registrar of Co-operative Societies.

What is the procedure to recover dues from society defaulters as per law?

Step 1: The first measure is to send a simple letter of notice to the defaulter, informing him of the outstanding dues (with interest that could lead up to 21%) instructing him on how and when to pay the arrears. Issue a warning in the letter stating failure to comply will lead to Registrar’s order to obtain recovery of dues. Step 2: If the member still doesn’t pay, pass a resolution in the general meeting to file for recovery of dues and send a final warning letter to the member informing him of the decision. Step 3: Apply to the Registrar’s office for recovery of dues by submitting necessary documents and paying a fee (between Rs 15 to Rs 1000 – refer to the table below) via a challan payable to RBI.
Amount to be recoveredInquiry Fee based on claim amountCourt Fee
Up to Rs 10005.5%Rs 15
Rs 1001 - Rs 20004.5%Rs 20
Rs 2001 - Rs 50003.5%Rs 20
Rs 5001 and more3.0% (up to Rs 1000)Rs 25
Step 4: The Registrar investigates the matter, verifying the claims made by the society of outstanding dues and may even ask for a hearing from the member to understand his side of the story. After due diligence and verifying the truthfulness of the claim, the Registrar issues a Recovery Certificate. Step 5: Thereafter, the society approaches the state government court where the presiding Recovery Officer issues a demand notice to the Sale Officer who is required to attach the moveable property of the member. Step 6: The Sale Officer visits the residence of the defaulting member and submits an inventory of all his movable property, hands it over to the member along with the demand notice. At this stage, the member has the opportunity to pay his dues. Step 7: If the member does not pay up, the Sale Officer will seize the movable property and hand it over to the managing committee (usually Secretary or Chairman) of the society. Step 8: The next action is to organize an auction of the defaulter’s property so that the proceeds can be made to settle his outstanding dues. The Sale Officer fixes the date, time and place for the auction. Step 9: If the amount is still not completely recovered in spite of the auction, the Sale Officer has the right to auction the member’s residence to recover the balance dues. (Note that such extreme cases are few and far in between as the member generally agrees to pay the arrears before such circumstances can arise).

Why should the dues be paid on time? What should be the society’s responsibilities in due recovery?

Payment of dues on time is not a debatable issue. It is the member’s duty as per model bye-laws to pay all maintenance charges and any other charges that are agreed upon originally between the member and the society. Members should understand that not paying their dues on purpose and prolonging such irresponsible behaviour can result in serious legal action against them. In case if the member finds that the charges are unnecessarily high and disputes them, the right way to resolve the issue is to take it up officially with the managing committee instead of defaulting on payments. At the same time, if the society faces defaults in payments for over three months in spite of sending notices, it should follow the above-stated procedure and not resort to other illegal measures such as cutting electricity, water or gas connections. Ideally, even without having to involve the Registrar and the subsequent formalities, member and the society should be able to come to some sort of a resolution internally. If not, the law should be followed precisely.

POSTED ON July 17, 2019

Income Tax Rules for Co-operative Housing Societies

The topic of taxation and filing returns is perhaps one of the most tedious and debatable. Housing societies in the past dwelled under the misconception that since they are a co-operative society and not primarily focused on profits, they are not liable to pay tax. Nothing could be further from the truth. Many societies especially those who run a tight ship with their accounts audits and have a well-informed and proactive committee members are regular with their taxes and returns. The problem of misinformation or lack of initiative lies with the outlier societies who have failed to comply either due to lack of knowledge on housing society tax rules or due to a certain apathy. In this article, we will elaborate upon the income tax rules, tax slabs, and penalties with respect to housing societies. Under the Income Tax Act of 1961, co-operative societies are a taxable entity. It falls under the category of Association of Persons (AOP) which is a group of individuals (whether incorporated or not) who get together with a common purpose and have a legal entity. Under the Co-operative Societies Act, housing societies are granted a separate legal existence. But not all income earned by housing societies is taxable. Section 80(p) of the Income Tax Act applies to co-operative housing societies, providing rules of deduction in respect of income of co-operative societies. Let’s understand in detail the deductions, exemptions and ITR rules for housing societies.

What are the various income sources for a housing society? And how many are taxable?

While a housing society has a number of sources that bring in finances, not all of their earnings are taxable. Their income can be roughly divided into two parts; the one that comes from members and the one that comes from non-members. Let’s understand these in detail. 1. Contribution from members The main source that runs the society is the pooling together of the members’ financial contributions to pay for the service and amenities. This includes a gambit of charges paid by members such as maintenance expenses, water, electricity, service staff charges, lift charges, etc. All these are simply collected by the managing committee who acts as a collector and then pays it forward to the relevant parties. These are not taxable under the income tax act. Even after the charges have been paid by the society and there remains some surplus, it is not taxable and is categorised as an exemption under the ‘concept of mutuality’. It means that one cannot profit from one’s own contributions. All the expenses are paid by the members towards a common fund which is not considered as an individual’s income. 2. Interest charged on defaulting members: If the housing society earns any interest from penalising late payments, i.e. charging defaulters interest, it is allowed a 100% exemption and not subject to taxation. 3. Interest earned on investments Any income earned through the way of interest from any co-operative entity (a co-operative bank) is subject to an exemption. However, if any interest is earned from investment in any other non-cooperative entity is taxable. 4. Interest earned from fixed deposits Up until 2016, many housing societies would deposit their sinking funds, corpus fund and surplus from member charges as fixed deposits in co-operative banks so that they would be exempt from taxes. However, that amount would run into lakhs. The government then decided to charge these as the Income Tax Appellate Tribunal declared: “Deduction us 80P (2)(d) is available to co-operative housing society on interest on FD with other co-operative banks.” (Source: The Economic Times). This also includes nationalised banks. 5. Dividend Dividends earned from any other non-cooperative entity is taxable, however, if earned from a co-operative organization is exempt from tax. 6. Rent earned from open spaces Some societies rent out premises for billboards and signages to companies and also sell their rooftop/terrace space to install mobile or cable towers. Income earned from these rental sources is subject to tax. 7. Non-occupancy charges As the non-occupancy charges are paid by members not availing the benefits of the residence, it does not qualify for the concept of mutuality benefit, thus is taxable to the society. The transfer fee is exempt from tax. 8. Income earned from parking charges Earnings made from members paying parking charges is not subject to tax. However, if a housing society rents out parking space to non-members, income earned is liable to be taxed.

Tax slab for housing societies

– If a society earns up to Rs 10,000, the tax slab is 10% of total income. – If a society earns between Rs 10,001 and Rs 20,000, the tax slab is 20% of the amount by which the income exceeds Rs 10,000 + Rs 1000. – If a society earns above Rs 30,000, the tax slab is 30% of the amount by which the income exceeds Rs 20,000 + Rs 3000. Note: In the case of housing societies whose income exceeds Rs 1 crore in a year, their tax liability increases by a surcharge of 12% on the tax. For the period of 2018-2019, taxation increased by 3% for Education Cess and Higher Education Cess. This is levied by the government over and above the base tax liability to raise funding for education.

How to file income tax returns for a housing society

Every housing society is mandated to file ITR according to an amendment was made in section 80 AC of the Income Tax Act in 2018 Budget. Income Tax Return form that housing societies are to use is ITR-5. Housing societies are required to have their PAN Cards, to register themselves as a co-operative and also to open a bank account and file their tax returns. You can file the returns electronically (e-Filing) with a digital signature or send the transmission of data electronically and submit verification with the ITR5 form by post to the income tax department.

Advance Tax

If a society is liable to pay Rs 10,000 or more as tax (Tax liability minus TDS), it is required to pay advance tax in three instalments. By September 15 of the previous year, advance tax is up to 30% of the tax payable, by December 15 of the previous year, up to 60% of tax payable and by March 15 of the previous year, up to 100% of tax payable. Non-compliance interest is 1% per month on tax but no interest is charged if 90% of advance tax is paid from the total tax payable.

Penalty for filing late returns

The due date to file tax returns of the previous year is 30th September of every year. If a housing society fails to file its returns by the due date, it is required to pay interest at 1% per month or part of the month, calculated under simple interest on tax payable on the outstanding tax liability.

Salaries and TDS for housing societies

If salaries paid to its employees exceeds Rs 2,50,000, tax is required to be deducted from salary as per Sections 24, 80C, etc. Housing co-operatives are required to have a TAN (Tax Deduction Account Number) when it deducts TDS (Tax Deductible at Source). If a housing cooperative is making payments (usually to contractors, lift maintenance, security services, professionals, etc) that are taxable as TDS they have to deduct it as per the prescribed rate and file remittance amount to the income tax account (within seven days from the end of the month in which the payment is made). If the one-time payment exceeds Rs 30,000 or if the total payment for a year exceeds Rs 75,000, TDS is deducted at 1% to individual / 2% to a company. If the professional fee of a person is more than Rs.30,000 in a financial year, the society deducts TDS at 10%. TDS certificate in form 16 A is to be issued to the person whose TDS the society deducts. Quarterly TDS returns have to be filed by the housing society, the due dates for which are, 15th July, 15th October, 15th January (first three quarters of FY), and 15th May (last quarter of FY). If a society does not deduct TDS, a penalty interest of 1% p.m. is charged and if does not send remittance of the TDS, the penalty is 1.5% per month.

GST for housing societies

A housing society has to get a GST Registration if its income exceeds Rs 20 lakh in revenues. But GST does not apply if the monthly member contribution is less than Rs 7500. Property taxes, electricity bills are not to be included in the Rs 7500 and are exempt from GST. If your society has been non-compliant with income tax deductions and returns so far, it is not too late to get back on the horse and start with basic corrective measures from the managing committee. At a later stage, you can always consider hiring a tax consultant or advisor if you decide your books need professional expertise.

POSTED ON July 16, 2019

Feature In Focus: Communications

Introducing Zumba classes within your community? Maybe you’d like to announce and spread the word. But, how?… Print handouts?… That’s a lot of paper and definitely a lot more to manage. With ‘Communications’ as a fresh feature on MyGate, you can now broadcast community updates and always keep the residents aware of what’s coming. Not only this, the feature allows you to create polls and send meeting invites, while the residents can initiate and participate in need-based, in-app discussions. The ‘Communications’ feature lets you to be in-sync with the latest. It offers the flexibility to hide discussions that don’t concern you, without having to worry about missing a critical update that could otherwise go unnoticed in huge chunk of conversations.

What can be done with ‘Communications’ ?

Create a Meeting: Available to the admins Looking to call for a meeting to plan an event? The ‘Meeting’ feature will help you create an invite just as you would do on iCal or Google Calendar. It allows you to list the meeting description, agenda, venue, date & time, and participating groups for attendees’ convenience.
The ‘Meeting Details’ screen lists the meeting whereabouts such as description, agenda, venue, date and time, and attendees. Start a Discussion: Available to admins and residents Have an idea for the upcoming event celebration? Check into the ‘Communications’ section and pen down your suggestions to start a discussion. What’s more, you can also participate in event planning, and comment on other ideas that excite you. A vehicle mistakenly parked at your spot? Trying to shell off that match ticket you now don’t plan to go for? Don’t stress! Just start a discussion in the ‘Communications’ section and get quick help.
The ‘Discussion Details’ screen lists multiple ongoing discussions with an option to add a comment or leave a reply. Run an Opinion Poll: Available to the admins Create opinion polls to understand what your residents want and make quick decisions. ‘Should there be Zumba sessions made available?’… run a poll and know what the residents want.
Your latest feeds on the ‘Communications’ screen showcasing current meetings, events, polls and discussions.

How It Works

1. Open the MyGate app; 2. Click on the ‘Community’ tab on the top right section of your screen and select the ‘Communications’ card. 3. You can either directly start a discussion by tapping the ‘Start Discussion’ button or choose an option from the ‘Type’ drop-down at the top left section of your screen. 4. As per your need, you can choose to create a meeting, start a discussion or run a poll. 5. Recent interactions are listed on the ‘Communications’ screen. You can comment, hide, turn down or accept meeting invites using the quick actions provided.

POSTED ON July 15, 2019

Unregistered Housing Societies

A registered society is a legal entity by itself, subject to the laws, liabilities, and rights under the government of India. Mandatory bye-laws applicable to a registered society ensure smooth functioning of the day to day affairs and in case of disputes, faster and more streamlined resolutions are available to the registered housing societies. Let’s understand why it is critical to register a society.

Why is it important to register a society?

The Societies Registration Act 1960 or a registration act applied by the state government provides clearly defined steps on how to register a housing society. Listed below are the advantages of registering your society: 1. Regular and uniform maintenance charges: Only if your society is registered, the model bye-laws are applicable to every resident. Each member is mandated to pay maintenance charges under the law. In an unregistered society or apartment association, members cannot be forced to do so. In most cases, the members are themselves held accountable for fixing any damage or paying for services since there is no managing committee to look after such needs. Thus it has been observed that while in an unregistered society, some members get together, form an Adhoc committee and collect maintenance charges. Some members pay willingly while others refuse to pay up, burdening others with their share of financial responsibility. In the case of a registered society, the Managing Committee can penalise defaulting members and collect the dues as well as interest. 2. Internal dispute resolution: The managing committee of the society has the right to act as a mediator or arbitrator with the power to resolve disputes among members. In case of an unregistered society, with no supervising authority, petty or big disputes such as parking slot occupancy, late-night partying, the encroachment of space, etc.persists without a satisfactory resolution. In worst-case scenarios, members facing major problems have the option to approach the police or civil court. But if a society is registered, many problems find solutions with peaceful negotiation and conflict resolution provided by the managing committee. 3. Tax benefits: An unregistered society cannot avail and enjoy the tax benefits provided to a registered society. In other words, tax is levied on the society if registered, not on the individual members, thus certain exemptions that co-operative societies enjoy are not open to individual unregistered societies. 4. Better financial accountability: Registered societies have a separate bank account under the society’s name devoted only for the financial transactions of the society. They have the right to collect deposits, annual Sinking Fund and regular maintenance charges from the members. Thus any emergency expenses or repair are promptly and easily taken care of. Yearly financial audits ensure no embezzlement occurs. In the case of unregistered societies, members pay heavy amounts out of pocket to fix any broken amenities or if an emergency occurs. This is not a feasible approach to handling financial management in the long run. 5. Complete rights over premises: In the case of a registered housing society, the builder hands over the charge of entire premises to the society. In case of a standalone apartment complex or unregistered society, the builder has the right to common areas including terraces, parking areas, etc., which they can put for sale. Increased Floor Space Index (FSI) is also of interest to the builder. Registered societies have the right to all the premises including FSI, thus giving them complete autonomy of occupation and management. 6. Safer environment: In a registered society, the homeowner is required to take the permission of the society before renting out his residence and a screening/ police verification is done. In the case of unregistered individual apartments or homes, the owner can lease out the property to anyone regardless of their social or criminal status. This could lead to illegal or anti-social activities in the rented residence (although this is not always the case). In general, a registered society has set rules in place to maintain the safety and security of its residents. Such may not be the case with unregistered societies.

What are the registration options?

To register as a co-operative housing society, a minimum of 10 members (varies from state to state) are needed to apply for registration with a society name reservation, along with the name, address, share capital, entrance fee from each promoter member, which need to be deposited in the bank suggested by the Registrar. Some vital documents needed for registration are 7/12 extract of the land or property card, title deed, sanctioned layout/plans, Completion Certificate, OC, NOC from various authorities, Architect Certificate, list of members, Notarized Guarantee letter by the Chief Promoter, Promoter Members, Builders, affidavits, two copies of bye-laws, and other essential documents asked by the Registrar. Another option (for apartment complexes) is to form an Apartment Owners Association, which is not a co-operative society but gets the legal benefits under the law, can act as an arbitrator for disputes, collect maintenance fees and dues, and manage the amenities and common spaces. Documents needed are proposal letter to the Registrar signed by all committee members, name and address of the association, proceedings of the first general body meeting, memorandum of association, bye-laws and registration fees.

A registered society is a legal entity in itself

A registered co-operative housing society can approach a number of legal authorities to solve its disputes, whether they be cases against the builder’s malfeasance or neglect, a vendor’s fraudulent business transactions or inadequate water supply. Similarly, membership issues, non-maintenance or fraud within the managing committee can also be remedied by taking legal action against societies. The legal avenues are the Registrar, Co-operative Court, Municipal Corporation, Civil Court, Criminal Court, or the police (all depending on the nature of the complaint). In the case of unregistered societies or apartment association, one usually has to approach the civil court of the area and there can be a significant loss of time in the process and delayed results are usually the norm. Co-operative courts generally provide verdicts faster. The prudent and advantageous action would be to register your society at the earliest and receive a complete handover from the builder. Not registering your society can leave you vulnerable to disasters and unforeseeable circumstances.

POSTED ON July 12, 2019

Amalgamation of Housing Societies

Some housing societies who may be struggling with efficiency in management or financial losses may choose to amalgamate with another society, divide into smaller segments or transfer its shares and liabilities to another society. Such decisions are taken strategically to benefit the original society as well as the society it wishes to amalgamate with. But proper checks and balances are put in place by the government in such scenarios. Let’s delve deeper in the procedure of amalgamation. Cooperative housing societies are allowed to do the following:- 1. Amalgamate with another society 2. Transfer its assets and liabilities, in whole or in part, to any other society 3. Divide itself into two or more societies 4. Convert itself into another class of society (e.g convert from an individual society to a multi-cooperative or federal society). Societies co-operative acts, Muti-cooperative act and Society Registration Acts all have provisions and guidelines for amalgamation of housing societies. For the purpose of this article, we will use the terminology from two of the most well-defined state co-operative acts which are Maharashtra and Delhi.

Procedure for amalgamation:

1. File an application: The society is required to send an application to the Registrar with full details of the intention, whether it is a decision to amalgamate, transfer assets and liabilities, divide itself or to convert to another class of society. 2. Registrar approval: The Registrar gives permission to members, shareholders, creditors and any other person who may have an objection to such a decision and may be affected by it. They may ask for additional information or particulars from the cooperative society, and after a thorough examination, gives his approval. 3. Special General Meeting: The society has to convene a Special General Meeting by giving a 15-day notice to its members & creditors. The resolution to amalgamate can only be passed if there is a two-thirds majority vote by the members. 4. Resolution and statements: The resolution should contain a detailed purpose of why the society intends to amalgamate, transfer or divide along with proposed plan or scheme demonstrating how such a transformation is in the interest of the society. The proposed scheme for the transfer of liabilities and assets to another society should also be clearly laid out if such is the intention of the housing society and a statement is to be submitted with the application. If the plan consists of the transfer of liabilities or assets, the co-operative society is mandated to give written notice to all the members, creditors and any other person who are likely to be affected by such a decision. 5. Options for all parties involved: Creditors are given a chance to secure their dues from the society after the notice is put out. Members/shareholders have the opportunity to become part of a new society, or continue being part of the amalgamated society. At the same time, if the member/shareholder wishes to discontinue their involvement, they are allowed to receive payment for their shares and other dues. 6. Notice of amalgamation in Delhi: The notice shall also be published in at least one newspaper in English and Hindi and one in vernacular language in circulation in the National Capital Territory of Delhi and a copy thereof shall be exhibited on the notice board in the office of the co-operative society and the office of the Registrar. The State Government may decide against such a notice depending on the society’s financial capability and the extent of its liabilities and other pertinent factors. 7. One month waiting period: Within one month of the passing of the resolution, creditors and other people who may be affected by the amalgamation can raise objections and clear their dues. The society takes the necessary resolutions for each objection (if any raised). The amalgamation procedure cannot be completed if there are any unresolved disputes from members, creditors or other persons. If any of the parties involved fail to raise objections or demand their dues within this one month, it is automatically assumed that they have consented to the amalgamation. 8. Society’s Report: The society is required to submit a report to the registrar recounting the actions it has taken with regards to clearing dues and objections and request a decision for amalgamation, transfer or division, whichever the case may be. The new or amalgamated society has to be registered and the existing registration has to be cancelled. 9. Registration approval: After inspecting the society’s report, the Registrar if thoroughly satisfied with the proceedings, will register the amalgamated, divided or converted society and cancel the registration that was filed for the society previously.

Things to remember

1. In the case of determining the member’s share value during the entire process, the calculation will be determined on the financial position of the society based on the last audited balance sheet, but it will not exceed the actual amount the society had received from the member. 2. On the very same date that the amalgamated, divided or converted society gets registered, the old registration is considered cancelled. 3. Even if the society amalgamates, transfers its shares liabilities, divides or converts itself, it does not affect any legal proceedings that the society may have started against someone or if any such proceedings were started against the society by another party. The newly transformed society will still continue the same processes legally. 4. The registration itself is enough conveyance to vest the assets and liabilities of the original society. 5. Even when the society has not intention to amalgamate or divide, the Registrar has the power to cause amalgamation, division or reorganisation of societies if it considers that such an action is in the interest of the general public and the co-operative movement and that it will lead to better management of the society. However, the registrar sends a copy of the proposed order to each society in question. The Registrar also makes modifications based on the suggestions or objections received by the society within a period of two months. The members willing to opt out still receive their share amount and the creditors will receive their dues even if the Registrar decides for amalgamation, division or reorganisation.

POSTED ON July 10, 2019

What is RERA? How Builders and Homebuyers Benefit From RERA

In 2016, the government enacted The Real Estate (Regulation and Development) Act, commonly known as RERA, that came to be implemented in May 2017 all over India. Its purpose is to encourage and develop the real estate sector while also protecting the interests of home buyers, bringing every activity of the buyer and the seller under one regulatory central and standardised legislation. RERA was established to do away with project delays, malpractice, irregularities in norms and increase transparency and accountability from builders and homebuyers both. Various states of India have been allowed to create their own regulatory practices in compliance with the Act. At the end of December 2018, around 35,000 projects were registered under RERA and the number is only growing. Maharashtra and Gujarat are considered the most RERA-compliant states and other states who have interim RERA are expected to follow suit. Let’s understand the highlights of the landmark act that has positioned the real estate sector on an upward trajectory, bringing in standardisation that never before existed in India.

Salient features of RERA

  1. RERA is applicable and mandatory to all residential and commercial properties in all the states of India (excluding Jammu and Kashmir). All projects are required to be registered under RERA, whether they are in the launch or construction phase (provided the land is over 500 square metres or eight apartments).
  2. Any changes in the design or plan of the property have to be implemented after the permission of the (two-thirds of the) allottees and the authorities.
  3. The act lays down clear instructions about the carpet area (usable area within the walls). The buyer only pays for the carpet area and not the super built-up area.
  4. 70% of the funds acquired from the buyers are required to be kept in a separate bank account and utilised for the development of the project.
  5. The project completion date has to be clearly mentioned in the agreement and strict measures are implemented to have the project finished on time.
  6. All project details have to be made available to buyers other than the sale deed, including financial statements, registration copy, project prospectus, design/plan of the flat, among others.
  7.  RERA websites publish lists of developers and their ongoing projects (as well as complete project repertoire), including certificates, project litigation, FSI details, plot bearings, certifications, etc.in order to give buyers an in-depth look at the developer’s credibility and their projects.
  8. In case of any delay, both the parties (buyer and seller) will pay the same interest which is 2% above SBI’s Marginal Cost (of funds based) Lending rate.
  9. Each state is mandated to form a real estate appellate tribunal that is responsible to resolve disputes between buyers and sellers within a time period of 120 days.
  10. Builders are not allowed to demand more than 10% of the total cost of the property as an advance payment/booking amount before they sign the final sale agreement.
  11. If there are any malfunctions or defects in the building, the residents have one year to bring it to the notice of the builder who then is responsible to fix the problems within 5 years of possession, free of cost.
  12. The builder is not allowed to publish any advertisement related to the project unless he has registered the project with RERA (state or central RERA). Advertisements must mention the registration status and the details of the project are published on the RERA website as well.
  13. To file any complaints under RERA, you can visit the ‘Complaint Registration’ section on their website.

Documents needed for Registration under RERA

As mentioned earlier, each state has its own requirements for which the state government maintains RERA websites where you can find exact specifics. However, below is the commonly needed paperwork for project registration.
  1. Authenticated copy of the PAN Card.
  2. Photograph, contact details, address of the builder and partners, chairman, etc.
  3. Builder’s Income Tax Returns of the last three years and balance sheet.
  4. Legal title deed attested by an Advocate.
  5. In cases where the builder is not the land owner, any agreements made between the owner and the builder are done with the owner’s consent letter.
  6. Documents related to the project such as sanctioned plan/floor plans, proposed plan, parking area arrangements, carpet area, TDI/FSI details, proposed numbers of buildings/wings, aggregate area of the open common spaces.
  7. Architecture and Design Standards, Type of Construction Technology, Earthquake Resistant Measures.
  8. Name and number of contractors, architects, engineers, and any other professionals involved in the construction.
  9. Details of the total duration of the project and completion date.

How does a builder register under RERA?

  1. Fill an application for registration along with the required documents and registration fees. The fee amount is calculated on the basis of project type and square meters (detailed fee structure is available on RERA websites). The RERA Maharashtra project registration fee is Rs.10 per square meter or minimum of Rs. 50,000 only and maximum up to Rs.10,00,000 only.
  2. After the application, you will receive a RERA registration number, which is to be displayed in every advertisement of projects.
  3. The process of granting registration may take up to 30 days.
  4. The project can receive extension in case of natural calamities or any other case if deemed reasonable by RERA (extended period is usually one year).
  5. RERA holds the right to cancel the registration if the builder defaults, violates the laws, misrepresents facts, conducts unfair practices or falsely advertises services.

Penalties imposed by RERA

  1. Non-registration penalty is 10% of the estimated cost of the project. Further non-compliance with respect to registration may lead up to imprisonment for three years with or without a fine.
  2. False presentation of information is penalised at 5% of the total cost of the project.
  3. Non-compliance or contravention of any RERA order is calculated on the basis of defaulted days and may add up to 5% of the cost of the project.
  4. Not abiding to the decision of the appellate tribunal may lead to imprisonment of three years with or without a fine leading up to 5% of the total cost of the project.

What are the benefits of RERA for homebuyers?

  1. Buyers will get what they pay for in terms of carpet area. Earlier they used to be conned by false promises of builders who used to advertise higher carpet area and then hide behind technical definitions.
  2. All the project details and progress reports will be made available to the buyers on RERA websites, making them aware of every aspect of the construction.
  3. There will be fewer projects being stalled, more projects will be completed on time.
  4. The buying decisions will be faster. Dispute resolution will no longer be delayed for months or years, as the appellate tribunal will be responsible for a verdict in 120 days.
  5. Projects will not run out of funds as the builders will not be allowed to move funds from one project to another and maintain transparency about the fund allocation.
  6. Builders will be accountable for a botched job on the construction and will be held responsible to fix the problem for free.
  7. The government has decided to start a common online platform for RERA authorities of all states so that buyers can exchange views, seek advice and discuss their problems.
  8. Advertising and promotional materials will not contain any misleading information so the buyers will be well-informed about their prospective purchases.
  9. In case of default of payment by the buyer, the interest rate to be paid by the buyer to the builder was high, whereas if the builder delayed the project, the interest paid by him to the buyer was less. Now the same interest rates are applicable to both parties.

Benefits of RERA for builders

  1. The buyers are expected to occupy the residence within 2 months of Occupation Certificate. This is good news to builders as it reduces unoccupied properties.
  2. Lenders will be more willing to provide flow of money to the builders due to renewed faith and transparency provided by RERA norms.
  3. RERA mandates regular payments from the buyers, including registration fees, maintenance charges, taxes, installment payments, water/electricity charges etc. This is a relief to builders who often used to bear the brunt of defaulted payments quite often.
  4. The real estate sector will be more organized as there will be fewer fraudulent and unreliable builders who made the burgeoning sector otherwise unorganized. Such spring cleaning will increase buyer trust in the builders and the credibility of all registered developers will see an increase.
  5. There will be less incidents of insolvency, bankruptcy in developers as the 70% of the funds will be correctly engaged in the project and not moved around for other projects.
In all fairness, RERA has only been enacted for two years so its progress and outcome are still to be measured in entirety. However, states that have shown compliance and quick implementation have already seen the initial fruits of accountability and stable growth. RERA not only benefits buyers massively, it also provides strict and necessary guidelines for builders and real estate developers to contribute positively to the economic growth of the country.
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