Allied Laws

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		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.		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.