Co-operative
Societies Acts of many states provide for formation of Housing Co- operative
housing societies.
Karnataka
Co-operative Societies Act also permit the formation of Co-operative housing
societies. These societies acquire the land; construct the flats, which are
allotted to its members. The society allots shares to its members. Such
societies need to be registered with registrar of Co-operative societies.
Members are
of different category, the member, associate member, and nominal member.
Individuals, Partnership firm, registered company, registered society local authority, State government, central government, public trust, any other
corporate body registered under the relevant act, may become member of the
co-operative housing society, subject to the rules governing the admission.
A minor can
also become a member of Housing Society through his guardian; Certain states
have put restriction of membership of family trust, Hindu undivided family.
There are
different types of Co-operative housing societies.
1.A society
purchases the land or takes on lease divide into several plots and allots to
its members. The members construct houses, on such allotted lands. In such
cases, the land is owned by the societies and the houses on plots to members.
Such societies are caller Tenant ownership type housing societies.
2. Societies
acquire land by sale or on lease and construct the buildings; flats are allotted to the members.
In such cases, both the land and building are owned by the societies. These are
called tenant Co-Partnership Co- operative housing societies.
3. Societies
are also formed by the persons who purchase the flats from the builders, under
agreement as per flats ownership acts of the respective states. In this case
also, both the land and building belong to the society after the execution of
conveyance by the builder in favor of the society. Such societies are called
flat owners Co-operative housing society.
Flat owners
co-operative societies issues shares to its members by which the members gets
the right to live, reside and enjoy the flat. Flat owners Co-operative society
societies are of more common. These societies are very popular in Maharastra,
Gujarat, and West Bengal and not so common in Karnataka.
Flat owners
Co-operative societies issues shares to its members by which the members gets
to right to live, reside and enjoy the flat. It is to be remembered that the
rights and interest of the member in the flat is limited only to reside and
enjoy. Member can transfer only such right. He is not the absolute owner of the
flat. On sale of the flat, society transfers the shares to the names of the
purchaser, on purchaser complying with the formalities. After the purchaser is
admitted, the purchaser becomes a member of the society and acquires right to
reside and enjoy, the flat.
4. In case
of death of a member the society transfers the shares to the name of the
nominee;
In the
absence of any nomination, the society may transfer the shares to anyone of
legal heirs on consent given by other legal heirs. In case of any dispute, the legal heirs may have to obtain letter of administration from a competent court.
The flats
are to be required to be occupied by the owners. In case the flats are let out,
the members have to pay non- occupancy charges to the society.
In case of
transfer of share to the others, the member has to give a notice to the society
along with the consent of the proposed purchaser. The member may also obtain
no-objective certificate from the society for transfer of share. The managing
committee on considering the notice of transfer will call for the following documents:
Application
of the transfer of shares along with share certificate.
Membership
application for the purpose of transfer Resignation letter from the original
member.
Prescribed
transfer fee, membership fee, price of the shares premium amount, copy of the
stamp duty paid agreement, declaration by both transferor/transferee under
urban land (ceiling and regulation) act 1976, if applicable; various reasons
for transfer declaration to use the flat for the purpose which it is brought,
under taking to discharge all liabilities to the society, no objection letter
from the financing agency, if the seller has availed loan, No objection letter
from the district collector, if the land is allotted to the society by the
government, No objection letters from any other statutory agency, which has
given land to the society.On receipt of all these requirements, the
application of transfer will be placed before managing committee. However, only
general body has powers to admit a new member,
The affairs
of the Housing Society are managed by a managing committee, elected by the
member from out of the members.
Generally,
the builders/owners sell the flats to the purchasers, but will not convey the
land to the societies formed by the purchasers. In such cases the title of the
purchasers is not perfect, since the land stands in the name of the builder
owners.
In such
cases the owner will be entitled to further FSI if permitted. Many states
provide in their statutes that the builder/owner should take steps for registration
the Housing Co-Operative society and thereafter transfer the land to the
society within a time frame. As per the sections 10, II of the Karnataka Flats
Ownership act 1972 and Karnataka Flat Ownership rules 1975, Rule No.10, 11, the
promoter builder shall submit an application for registration of the society within
four months from the date of which minimum number of persons require to form a
society have taken flats - Thereafter the promoter shall convey the land to the
society within four months from the date of registration of society.
5. Another
interesting aspect is the charge created on individual flats/ apartments by the
members. The right of the member is limited, to reside and enjoy the flat, but
they do not have any ownership right. So the members can mortgage their right
to reside, hence such flats cannot be alienated, since the ownership rests with
the Housing Co-Operative Society. In case of sale, only the right to reside in
the flat is transferred to the purchaser, he will not acquire absolute
ownership. So is the case, where the flats are mortgaged to the financial
institutions by members.No objection certificate from the Co- Operative
society is essential to mortgage the flat.
Generally,
the builders/owners sell the flats to the purchasers, but will not convey the
land, in such cases the title is not perfect.
In case of
the transfer of flats by transfer of shares, the Co-Operative societies will
not register the flats in individual names, and the entire property stands in
the name of the Co-Operative. Societies; the property is also assessed for tax
as a single entry.
Karnataka
government is of the view, that individual flats should be registered in
individual names by regular conveyance deed duly registered and tax assessment
should be done flat wise. Tracing the title of the flat requires verification
of the society records, its byelaws and share certificates Conveyance:Essential for Co-operatives societies
The purchasers must not neglect to acquire the title of the property or flat
he/she purchasers on a purchase of the flat by acquiring share certificate, the
purchaser gets only the right to occupy which is not title to the property. It
is observed that he builders themselves do not acquire ownership of land from
the landowners. They enter into development agreement and GPA with the
landowners to develop and sell the flats, which is not a good practice. But
some builders acquire ownership from the landowners them start construction
which is in a way easier to convey title to the purchaser i.e. from the
builders to the purchaser.
Housing
societies to witness freedom
The Mumbai
scenario of purchasing and acquiring the flat by share certificate is slightly
different. Nearly 60,000 flat owners are having only share certificates.
Maharastra Govt. has made certain provisions easy for them.
By approving
the self-reliant legislation by the cabinet, co-operative societies have been
made self reliant, so that there is no dual control on them. Self-reliant
legislature is on the pattern of 'Atma-Nirbhar' legislation successfully
implemented by Madhya Pradesh. Under the new legislation the co-operative
society can opt to be administered or continue under the existing act. If they
opt the self-reliant or 'Atrna-Nirbhar' law, responsibility of the co-operative
department will be only to register such societies, while the rest of the
affairs will be managed by the society. 'Atma-Nirbhar' law provides for setting
up machinery for redressed of grievances. The societies or its members need not
approach the co-operative department.
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