The long-debated issue of housing society transfer fees has resurfaced after the Manekbaug Cooperative Housing Society in Ambawadi decided to charge a steep 20 lakh as a “membership fee” from new property buyers.
The State Registrar of Cooperative Societies (RCS) has termed the move “not legal,” as it violates the recently amended Gujarat Cooperative Societies Act, which caps transfer fees at a maximum of 1 lakh or 0.5% of the property value, whichever is lower.
In a recent Extraordinary General Meeting (EGM), the society passed a resolution to impose the 20 lakh fee to meet expenses and build a corpus fund. A society office-bearer, speaking on condition of anonymity, defended the decision, claiming it was in line with society bylaws and that the payment was “voluntary.”
However, members and legal experts have strongly opposed the move, calling it a direct violation of the law. Advocate Rajesh Ruparel, an expert in cooperative laws, said societies cannot disguise transfer fees as “membership,” “development,” or “donation” charges. He cited a recent Bombay High Court judgment that barred such practices.
State Registrar M. P. Pandya reiterated, “It is not legal to charge the membership fee. A society cannot levy transfer fees under any other name.”
Advocate Mihir Lakhia added that while the law ensures fairness, the government should consider a more flexible policy that factors in the size, price, and amenities of different societies.
What the law says:
The Gujarat Cooperative Societies Act, 1961, was amended last year to include Rule 140A, which clearly states that a housing or housing service cooperative society “shall not collect a transfer fee exceeding 0.5% of the property’s consideration value or ₹1 lakh, whichever is less.”