Transfer and Transmission of Flats
Flats being units in a large complex structure, their ownership and enjoyment
of which is subject to conditions aimed at ensuring peaceful possession and
enjoyment by other unit holders sharing common amenities and having undivided
interest in land over which the building stands. Unlike an independent
residential house, the management of common amenities and ownership of land in a
multi-storeyed structure is with an independent entity and the rights and duties
of flat owners are regulated by the respective statutes governing such
independent entities.
Two applicable laws which govern these transactions in the state of
Maharashtra are:
- Maharashtra Ownership flats (Regulations of the Promotion of
Construction, Sale, Management and Transfer) Act, 1963 (MOFA)
- Real Estate (Regulation and Development) Act 2016
These laws require constitution of a co-operative society or a company or any
other form of organisation of flat buyers as soon as minimum prescribed number
of flats are taken by the purchasers and to convey the title over the land and
building to such Society/ Company.
MOFA also provides for an alternative to the constitution of Co-operative Society/Company by permitting the flat purchasers to submit their
respective apartments to the provisions of Maharashtra Apartment Ownership Act,
1970 (MAOA) and form a condominium by making a declaration u/s. 2 and executing
Deeds of Apartment as per Sec. 5(2) of that Act.
Transfer of Flats
Co-operative Society |
Company |
Condominium |
Ownership of the building vests in the Society and the members have
right of occupancy which right itself is a specie of the property |
When a Company is formed in accordance with the provision of MOFA
the land and building conveyed by the promoter belongs to the Company |
Flats in condominium are not the property of the condominium but
remain the property of the apartment owner and can be transferred like
any immovable property by execution and registration of a Deed of
Apartment (Sale Deed) |
The right of occupancy is represented by the share certificate |
The Articles of Association provides the nature of rights of the
shareholders over the individual flat(s) as well as the manner of
identifying the particular flat(s) in relation to which such rights are
to be exercised |
Section 4 of the MAOA, 1970 provides that each apartment, together
with its undivided interest in the common areas and facilities,
appurtenant to such apartment, shall for all purposes constitute
heritable and transferable immovable property within the meaning of any
law for the time being in force in the State |
Section 29(2) of the M.C.S. Act lays down that the member shall not
transfer any share held by him or his interest in the capital or
property unless (a) he held such share or interest for not less than one
year and (b) the transfer is made to a member of the Society or to a
person whose application for membership is accepted |
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An apartment owner may transfer his apartment and the percentage of
undivided interest in the common areas and facilities by way of sale,
mortgage, lease, gift, exchange or in any other manner whatsoever in the
same manner, to the same extent and subject to the same rights
privileges, obligations, liabilities etc., as any other immovable
property |
Bye-laws lay down the procedure for transfer of shares and interest
in the capital/property of the Society |
Whatever rights are held by the shareholder in respect of the
particular identified flat(s), are transferable by transfer of shares
which represent his rights and interest in the company's property |
Transfer of flat in a condominium will be subject to the procedure
and conditions laid in the bye-laws of the condominium |
On the transfer application having been accepted, the share
certificate will be transferred to the transferee with necessary
mutation of names therein |
Flat is transferred by subscribing to shares of the company |
Flat is transferred by executing Deed of Apartment (Sale Deed) |
If the flat has been purchased by two brothers by contribution in
equal proportion, only one will be admitted as member by the Society,
the other one will remain the Associate Member only. |
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If a flat is acquired in a condominium by two co-owners, the rights
of both the co-owners are distinctly recognised and each co-owner is
treated as the owner of his share in the apartment. |
Transmission of flats
Transmission is passing of property or rights therein on the death of the
erstwhile owner. It takes place in accordance with the wishes of the deceased
or, in the absence of any expression of such wish, in accordance with the
provisions of succession laws applicable to him.
Nomination
Membership in Co-operative Society or Company can be conveniently transferred
if the original owner of shares makes a nomination in favour of somebody else.
Person acquiring membership by nomination shall hold the flat in trust till
the legal heirs are brought on record and shall not have the right to ownership
and shall not create third party interest or alienation in any way whatsoever.
If the member dies without making a nomination or no nominee comes forward
for transfer, the Society invites claims or objections by a public notice and
then the committee decides the person who, in its opinion, is the legal heir of
the deceased.
The transmission by nomination in respect of shares in a co-operative society
is not a conclusive proof of ownership and can be challenged by other claimants
in appropriate proceedings.
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