In Maharashtra Co-operatve housing society related questions and answers MOFA 1963 maintenance

'Terrace waterproofing costs should be equally divided'

WHO BEARS THE COST FOR WRONG DECISIONS?

I am a senior citizen residing in the society having two buildings, where the chairman, secretary and the members of the committee have taken a decision to construct a toilet for the shop owners in the garden of the building, in spite of the fact that the developer had already constructed the toilet for the shop owners, which they have decided to demolish to have the society's office. The members of one building of the society have objected in writing because of the security and other factors. But they did not bother and constructed it. Ultimately, the members complained to BMC, which demolished the said toilet, as it was illegally constructed. In such a case, who should bear the construction cost of the demolished toilet, as the money was spent from the society's funds.

In case any action of the managing committee or any of the office bearers is contrary to the provisions of the bye-laws or the Act or Rules and without the required approval of the authorities concerned, the office bearer or the committee members associated with such a decision shall be responsible and liable for the same. The issue may be taken up with the Dy. Registrar of the Societies for suitable action against the erring office bearers or the members of the committee for causing financial loss to the society.

CAN THE SOCIETY WITHhOLD MY SHARE CERTIFICATE?

I have a flat in a society, which has been registered only 8 months ago without the cooperation of the builders. The builder gave assurance to form society within 3 months and asked to pay the maintenance till the registration of the society. Since he did not form and register the society, I stopped the payment of maintenance to him. Now the society is registered since last 8 months and the managing committee is asking me to pay the maintenance charges for the last 15 months, which were due to the builders and they have issued me a bill for all the outstanding in the first month itself. I would like to know whether the society can ask for the maintenance charges, which were due to the builders and whether the society considers me a defaulter even though I am paying the maintenance every month regularly after the registration of the society. Society has told me that they would not issue the share certificate, unless the dues are cleared. Can they hold my share certificate?

The maintenance charges have to be paid to the builders till the formation and registration of the society as per the terms and conditions of the Agreement for Sale (Refer to Section 12 of MOFA 1963). But the builder has to maintain a separate account of all these collections and shall hold the said collection as a trustee and disburse the money only for the purpose it was collected and on demand is bound to make full and true disclosure of all the transactions in this account (please refer Section 5 & 6 of MOFA 1963). The society cannot force you to make the payment of maintenance charges prior to the date of its registration and since you have been paying the society charges from the date of its registration regularly, the society has no right to with-hold your share certificate. You may approach the Dy. Registrar of the Societies to issue necessary directions to the society.

SHOULD WATERPROOFING CHARGES BE LEVIED AS PER THE AREA OF EACH FLAT?

I am a member of a cooperative society in Navi Mumbai and our society has decided to cover the full terrace before the rainy season to avoid leakage problem. Due to insufficient funds, committee has decided that each member should contribute Rs.10,000 within 3 months for this purpose. But some of the members have argued that the contribution should not be equally divided, but it should be based on the area of the flat i.e. lower amount for 1 RK flat and higher amount for 1 and 2 BHK flats and so on. Since the terrace is common for all I think it should be equally divided and the decision of the committee is justified. Please advise whether such charges should be equally divided or based on the area of the flat.

The terrace of the building of the society is common to all the members and it is the property of the society and every member has to contribute the expenses equally but before taking the steps to cover the terrace, the prior approval of NMMC should be obtained because it permits only temporary cover only in the rainy season. In the absence of the permission from the NMMC to cover the full terrace permanently, there could be problem to the society as it may demolish it, being unauthorized. Further instead of covering the full terrace at such a huge cost, it would be advisable for the society to consult some architect/engineer to suggest some other alternative method to solve the leakage problem.

CAN SOCIETY LEVy PENALTY FOR MEETING ABSENTEEISM?

In the AGM of our society most of the members demand to impose penalty on the members who do not attend the AGM. Is it possible to charge penalty for the absenteeism of such members?

There is no such provision in the bye-laws to impose penalty on the members who do not attend the AGM, though normally it is expected that all the members of the society should attend the AGM and contribute to the discussions for deciding issues as per the agenda. However, the decisions of the AGM will be perfectly legal, if there is proper quorum in the AGM and the decisions are not contrary to the bye-laws, Act or Rules.

CAN I CLAIM REPAIRS EXPENSES INCURRED FROM SOCIETY?

I have purchased a flat jointly with my wife in the year 2003. At that time the society had given NOC for the transfer of the flat. But when I approached the society for transfer, secretary informed us that repairing contribution for the flat is outstanding, so we must first clear those dues. We approached the seller and he paid the dues and we got the flat transferred in our name. In our society except transfer case members, nobody has paid repairing amount. Now a period of 7 years has passed and neither repair work has been taken up by the society nor has any other member paid their contribution. The new committee has been formed and I am one of the committee members. The new members are demanding their money back. I have spent out of my own pocket for the replacement of the water pipeline because of some leakage from outside, as the managing committee was not ready for repairing the same on the ground that other members were also facing the same problem. Shall I be deemed to have contributed these expenses towards repairing fund?

As per the bye laws society is under the obligation to maintain the building of the society in a proper condition and when it has been collecting the contribution for repairs etc. and if the building needs the repairs etc., it has to take up the repairs of the building and collect the amount from the other members. The society has enough power in the bye laws for recovering the amount due from the members. When the members are facing water shortage due to leakage in outer water pipe lines the society has to attend to it and stop this wastage forthwith. If a member spends the money on the repair out of his own, he cannot claim the said amount towards the repair fund payable by him to the society. In case the society is not tackling the problems of leakage, repairs etc., the members may approach the Dy. Registrar of the Societies to issue necessary directions to the society.

There is no Termination clause in the original redevelopment agreement with the developer. We would like to cancel the agreement and go for redevelopment by self only. Please advise us.

Even if there is no termination clause mentioned in the agreement, the society who has granted the redevelopment finds any breaches committed by the developer can give a legal notice for termination and by adopting the due process of law, the development agreement may be cancelled. We need to study the various grievances the society has with the developer, up to what stage the developer has carried out the work, etc., as it makes a lot of difference. Since it is MIG Mhada property, you will be able to get 2.5 FSI. In case, you are able to get Tit Bit Plot of 6000 sq. ft., you can construct 2.5 FSI of Tit Bit Land over and above your existing plot FSI of 2.5 FSI. This means nearly 15000 sq. ft. can be constructed by you in addition to your plot potential. Of course, you have to pay the premium for purchase of tit bit land. There is no bar for self redevelopment. Just because, you have realised the benefit accruing in due course cannot be the reason for termination of development agreement. You have to establish that the developer has breached many of the conditions, which has compelled the society to go for self redevelopment and terminate the development agreement.

I am residing in a MHADA building in Andheri and our society has gone under redevelopment. All the members of our society have agreed for redevelopment and the builder was elected through tender process. We have selected him willingly. All the society members have signed the agreement in September 2010 and the builder has also given the first cheque to all the members in the same month. He informed us that the project will start after 2 months but verbally. Till date the builder has not formally intimated us to leave the flats and the date of vacating the flats. He has informed us that due to change in the government leadership and executives they are not passing any files for redevelopment so it will take more time than estimated. What is the exact scenario and what steps should we take? What will be our tax liability as we have received first cheque in September and the project has not got approved yet? In case if there is rejection of the project then we have to give the money back to the builder and the tax paid can be on our head, so what should we do?

Since September, 2010 MHADA authorities have not been clearing the files as they are contemplating to get the built up area from the developer instead of collecting premium for grant of 2.5 FSI during redevelopment. MHADA has approved to take the built up area against the additional FSI granted. This proposal is pending with the Government officials for their approval. Till the same is approved or rejected, the MHADA authorities are not ready to release 2.5 FSI and this has really created bottleneck. The stand of the developer is correct due to changes in the head of the department and expected changes in certain polices, the plans are not being taken up by the authorities for approval. Since you have not vacated the flat, the rent received from the developer may be treated as advance received and in such cases, you need not pay the income tax on such deposits or advance received.

There was an article that mentions that a society cannot appoint a builder for redevelopment until society conveyance is not done. Our society has passed by 80% majority that our society will be redeveloped. Our society has not done the process of conveyance. Our society intends to do the conveyance and the redevelopment hence by the same builder. What can be done under the society rules to prevent the society from taking such an action? Since the resolution is passed by 80% majority, will that be an issue enforcing the rules? What legal actions can be taken? Which is the circular that we may refer to and where can one get it?

Normally it is advised by the legal experts, that unless and until the society acquires the right, title and interest in the property, the society should not enter into an agreement to create another party interest in the society property. However, we have noticed that practically due to the various complications, cost and expenses involved in getting the conveyance, societies do proceed to appoint a developer and authorise the developer to incur the cost, expenses including the required stamp duty, registration, etc. to procure the conveyance. In such cases, the member may loose marginally due to increase in the property price and redevelopment may not happen till the proper conveyance is obtained. Sometimes, if the existing builder/ land owner initiates any legal proceedings, till such legal cases are decided your builder will not be able to take up the redevelopment. Therefore, if proper agreement with proper timeline and increase in corpus in relation to Ready-Reckoner rates are mentioned in the MOU or Redevelopment agreement, even before obtaining the conveyance, you may appoint a developer and authorise him to complete all legal formalities before commencing the redevelopment.
In case as a member you want to stop such process, you may have to proceed in the co-operative court challenging the resolution passed by the society. Ultimately society is for the members and by the members. If the majority have taken a decision to undertake redevelopment in certain methodology, the minority will not have much say in the matter. The government circular dated 3.1.2009 has stated that the Project Management Consultant should verify the various documents including the conveyance of land and building in favour of the society. Bye-laws No.5 says the purpose of registration of the society is to get the conveyance and then maintain the property.

I have purchased a residential flat at Naigaon East. On the booking date flat was not in existence as the builder is only now constructing that on the land and still it's under construction. Whether I will be able to get the flat and also the loan required to pay the balance amount?

The developer is permitted to book the flat on receipt of necessary permission. As per your statement, the builder has started the construction which means, he has obtained all the required permission. Once the building is completed you will be given the possession of the flat. Further, you will be able to get the housing loan on under construction flats as per the completion of the work.