Maharashtra, India · property

Can Housing Society Charge Transfer Premium for Gift Deed in Maharashtra?

In Maharashtra, cooperative housing societies are legally prohibited from charging a transfer premium for gift deeds executed between immediate family members. For transfers to outsiders, the premium is strictly capped at ₹25,000. If your society is demanding exorbitant fees or 'donations' to update your share certificate, this guide explains how to protect your rights.

How Maharashtra Law Protects Gift Deed Transfers

In Maharashtra, India, transferring a flat to a loved one through a registered Gift Deed is a common and legally recognized method of estate planning. However, many cooperative housing societies unlawfully use this as an opportunity to demand exorbitant 'transfer premiums' or fees before updating the share certificate. Under the Maharashtra Co-operative Societies (MCS) Act, 1960, and specifically Model Bye-law No. 38, housing societies are strictly prohibited from charging any transfer premium if the property is being gifted to a 'family member'.

The Model Bye-laws define 'Family' under Bye-law No. 3(xxv) to include your spouse, parents, siblings, children, son-in-law, daughter-in-law, and grandchildren. For transfers among these immediate blood relations, the society can only charge a nominal administrative transfer fee of ₹500 and an entrance fee of ₹100. If you are gifting the property to an outsider (someone not on the statutory family list), the society is permitted to collect a transfer premium, but it is strictly capped at an absolute maximum of ₹25,000 in municipal corporation areas, as mandated by the landmark Maharashtra Government Circular dated August 9, 2001, issued under Section 79A of the MCS Act, 1960.

Beware of the 'Donation' or 'Welfare Fund' Camouflage

To bypass the statutory caps, managing committees often try to coerce flat owners into paying large sums under alternative labels. You may be told that the general body passed a resolution requiring a 'voluntary donation', 'welfare fund contribution', 'development fee', or 'society repair charge' in exchange for processing the transfer. These demands are entirely illegal and constitute a direct violation of the law. The Bombay High Court has consistently struck down these attempts to bypass the ceiling.

In the landmark ruling of M/s. Tirthankar Darshan Co-operative Housing Society Ltd. vs. State of Maharashtra & Ors. (August 14, 2025), the Bombay High Court held that societies are legally barred from recovering any transfer charges beyond the statutory limit. The court ruled that resolutions to charge 'welfare fees' or 'donations' are nothing but a camouflage to extract illegal funds. Furthermore, in the February 2026 judgment of Vallabhnagar Co-operative Housing Society, the High Court clarified that government directives under Section 79A of the MCS Act strictly override any private contracts, lease conditions, or internal society bye-laws.

How to Assert Your Rights and Resolve the Dispute

If your managing committee refuses to update your share certificate or demands an illegal premium, do not capitulate. Your first step is to formally tender the transfer documents along with the nominal, legally permitted fees. If the committee fails to act or formally rejects your application on these grounds, you have the right to file an appeal before the Deputy Registrar of Co-operative Societies. The Deputy Registrar has the power to deem the transferee a member and direct the society to update its records.

You do not have to fight this stressful situation alone or give in to illegal demands. You can use Caunsel to research the exact laws governing cooperative housing societies, save and organize your correspondence or registered documents in a secure case file, or connect with an independent property lawyer to draft a legal notice and resolve your dispute once and for all.

Steps

• Register your Gift Deed with the local Sub-Registrar of Assurances, paying the nominal stamp duty applicable for family transfers in Maharashtra.
• Submit a formal membership transfer application to the society using the prescribed forms (Appendix 20(A) and 21) along with a certified copy of the registered Gift Deed.
• Enclose a cheque of ₹500 for the administrative transfer fee and a cheque of ₹100 for the entrance fee, as allowed under the Model Bye-laws.
• If the society demands an illegal premium, submit a written protest letter quoting Section 79A of the MCS Act, 1960, and Model Bye-law No. 38, demanding they put any fee requirement in writing.
• If the society does not update the share certificate within 30 days, file a formal complaint with the local Deputy Registrar of Co-operative Societies to seek a deemed membership order.

Common mistakes

• Paying illegal 'donations' or 'welfare fees' without a written, signed receipt clearly stating that the payment was made under protest.
• Relying on verbal assurances or accepting oral demands from the managing committee instead of demanding all fee requirements in writing on the society letterhead.
• Believing that an internal General Body resolution can override the statutory ₹25,000 ceiling or the family transfer exemption.

Questions people ask

Who qualifies as a family member for a premium-free gift deed transfer in Maharashtra?

Under Model Bye-law No. 3(xxv) of Maharashtra cooperative housing societies, 'Family' includes your husband, wife, father, mother, sister, brother, son, daughter, son-in-law, daughter-in-law, and grandchildren. Transfers via gift deed to anyone on this list are entirely exempt from the transfer premium.

What is the maximum transfer premium a society can charge if I gift my flat to an outsider?

If you gift your flat to someone who does not fall under the statutory definition of family, the society can charge a transfer premium. However, under the Government Circular dated August 9, 2001, this premium is strictly capped at ₹25,000 in municipal corporation areas (such as Mumbai, Pune, and Thane), ₹20,000 in 'A' Class municipalities, and ₹15,000 in 'B' Class municipalities.

What can I do if the housing society refuses to issue the share certificate without the premium?

If the society rejects your transfer or delays it beyond 30 days, you can file a complaint with the Deputy Registrar of Co-operative Societies under Section 22 and 23 of the MCS Act, 1960. The Registrar can issue a deemed membership order, bypassing the society's committee entirely.

General information only, last updated 2026-10-03. Caunsel is not a law firm and does not practise law. AI answers and this guide are not legal advice. Verify filings, deadlines, and statutes with a licensed lawyer in Maharashtra, India.