Society Registration

Housing Society Committees: Elections, Permissions & Maintenance Charges

A housing society is a cooperative, governed by a committee that is voted into power by its members. Rules for elections to the managing committee are different in some model bylaws. This article brings to you all details about housing society committees.

The apartment management committee of a housing co-operative is the steering that drives the society towards a wholesome, efficient and harmonious existence. Whether it is member grievances, financial management, or day-to-day affairs, the housing society committee has to run it like a well-oiled machine to create the best living conditions for the residents.

In Mumbai, elections for housing society members are to be held every five years. In Andhra Pradesh, the general body shall, at each Annual General Meeting of Society, appoints three directors for a term of five years, such that there are 15 committee members at all times. Even associate members (those whose names are second in the share certificate) may contest elections.

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People Who Cannot Contest the Elections

The reasons for barring a member from an election are largely the same in every state. In Delhi, the following applies: The disqualification of a member from the managing committee happens, if he

  • is a defaulter in payment of dues
  • accepts any profits of the society
  • is convicted of any offences involving dishonesty or moral turpitude (unless six years have passed since his conviction, in Maharashtra)
  • is not a member of the society
  • did not go through the proper procedure before sub-letting his flat.
  • is an associate member and does not have the proper permissions.

Removal of Managing Committee Members

The chairman, treasurer and secretary of a building may be removed by the passing of a no-confidence motion against them. Other members of the managing committee, presided by the area authority (Registrar, in the case of Maharashtra) conduct a meeting in which such a no-confidence motion has to be passed. In a housing society in Maharashtra, notice will have to be given by at least a third of the members of the committee. At least three-fourths of the committee must approve the motion, and at least two-thirds of the committee must be in attendance.

Charges and Funds

Housing societies may collect funds in ways, such as by issuing shares and collecting fees for transferring flats or voluntary donations. Also, the society charges its members for the maintenance of the building. These charges are to be split between the members. In Mumbai, for example, this is how the charges are to be split:

  1. Property charges: As fixed by the local authority, according to the area of the flat.
  2. Water charges: According to the number and size of inlets provided.
  3. Parking charges: As fixed by society.
  4. Lift maintenance: Divided equally, regardless of whether a person uses it or not.
  5. Interest on delayed payment: As fixed by the society, up to 21% per annum.
  6. Service charges: Split equally, includes common electricity charges, payment of salaries, auditor’s fees, etc.
  7. Non-occupancy charges: Not above 10% of service charges.
  8. Expenses on repairs: At a rate fixed by the general body, but cannot exceed 0.75% of the cost of construction of your flat.
  9. Sinking charges: To be decided by the general body, but not beyond 0.25% of construction cost. This fund is for the reconstruction or structural repairs of a society building. The use of these funds can be made only with the approval of the general body.
  10. Insurance charges: According to the built-up area of the flat. If the cost of insurance has increased because of any specific goods stored in a house, that member shall pay charges at a higher rate. The surplus at the end of the year is to be divided between funds. In Mumbai, for example, at least a quarter of the surplus is to be carried into the reserve fund (for general repairs and maintenance of property), according to Section 66 of the Maharashtra Co-operative Society Registration Act 1960.

The education fund, bad debts fund or employees’ provident fund share the surplus left. Payments of dividends can also happen, but not above 15% per annum (18% in Delhi). Funds, when not in use, may be invested on a short-term basis, whereas the sinking fund must be invested on a long-term basis.

What Permissions Are Needed From the Housing Society Secretary?

You will need to get a NOC from the secretary of the society in the following cases:

  1. Admission to membership of the society
  2. To transfer shares or capital in the property
  3. To sub-let the property or give on leave and licence or appoint a caretaker
  4. To make any structural changes to the property
  5. To mortgage or create a charge on the property
  6. To use the terrace or any other common area of the property
  7. For allotment of parking space
  8. To exchange flats with another resident

Transfer of Property

During the sale of a property, the seller needs to apply to the society for transfer of the flat and membership. The procedure for transfer is identical in Delhi and Maharashtra. Here’s what you’ll need to do:

1) Give the society at least 15 days’ notice of the transfer, indicating the name and consent of the person who is buying the property.

2) The society may charge a fee for the transfer of the property. In Maharashtra, this used to be 2.5% of the difference between the price you bought the property and sold it for. The new bylaws changed this rule–now, the fee is fixed at a rate that the general body agrees to, provided it is not beyond ₹25,000.

3) Once the buyer transfers the fee, and the person buying the property has paid the value of the interest to be transferred, the transfer comes into effect.

4) The society will then issue a new share certificate to the new member. In case of the death of the member, the nominee may apply for membership in the society. In Mumbai, this needs to be done within six months. No transfer fees are to be charged to the nominee.

Conclusion

A Housing Society Committee is an important body for the smooth functioning of society, and its residents. Such societies are governed by the Societies Registration Act of 1860. Every state has the right to amend the Act as per its need. You should get in touch with experts at Vakilsearch to help you register your society in a hassle-free and speedy manner.

Read more:

  1. The distinctions between a society and an NGO
  2. FPO registration procedure
  3. Is property registration required?
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