A cooperative housing society (CHS/the Society) is designed to operate on democratic principles, with rules in place to protect the interests of all its members. Yet, many residents continue to face confusion over what the Society can or cannot legally do — from levying arbitrary charges to ignoring government notifications or mishandling ownership transfers. This week’s queries highlight three such common issues: lift usage fees and refundable deposits, property tax exemptions for small flats and ownership transfer complications in Societies built on collector’s land.
 
Each of these problems stems from a mix of misunderstanding and non-compliance — either by the managing committee or by members unfamiliar with the legal process. The answers below explain the correct procedures, the limits of a Society’s powers and the proper authorities to approach for resolution.
 
Lift Charges and Refundable Deposits in Housing Societies 
Question: I am the owner of a residential flat in a CHS located in Mumbai. The Society, through a resolution passed in the general body meeting (GBM), has decided to levy lift usage charges of Rs2,000 for every move-in and Rs2,000 for every move-out, applicable to all members. Apart from this, we have to deposit Rs15,000 as a refundable deposit.
 
Answer: The Society is allowed to levy lift usage charges for members moving in and moving out. However, a refundable deposit of Rs15,000 for keeping a tenant in the flat is not allowed. You should make a complaint against the Society to the deputy registrar of cooperative societies under Bye-law No. 174(A)(xxii) regarding the Rs15,000 refundable deposit.
 
Property Tax Exemption for Flats under 500sqft Area
Question: My flat in Mumbai is a one-room kitchen (1RK) flat, smaller than 500sqft. According to the government/BrihanMumbai Municipal Corporation (BMC) notification, such flats were exempt from property tax as of 1 January 2022. However, the managing committee continues to levy this tax till today. On complaining, they stated that refunds cannot be paid until BMC refunds the amount. My contention is that the refunds notified are not conditional and any claim from BMC should be pursued by the managing committee or the Society’s lawyer. Please advise.
 
Answer: There appears to be an error in the property tax assessment for your flat which is less than 500sqft. With a copy of the BMC-approved plan of your flat (and similar flats), your Society should write to the assistant assessor and collector of your ward office. The officer will make the necessary correction and reduce your property tax to zero. If any property tax has been wrongly collected, the refund will be issued by a crossed cheque.
 
Transfer of Flat on Collector’s Land without Prior Approval
Question: My Society is built on the collector’s land. My father was not an approved member in the collector’s records, but his name appears on the Society’s share certificate. My name is registered as a nominee in the Society’s records. After his death, the Society is not recognising me as a provisional member.
 
Answer: On the collector’s land, a new member’s name must be approved by the collector after paying the applicable collector’s fee which your father did not do. Since your father had a sale deed with the previous owner of the flat, the Society wrongly transferred the flat’s share certificate in his name. Later, the Society may have realised this mistake during an audit, but did not ask your father to obtain the collector’s approval for transferring the flat in his name.
 
You must first get your father’s name recorded in the collector’s records for that flat and then apply to the collector to transfer the flat from your late father’s name to yours. Even though you are a nominee, your father had nominated you without first becoming the legal owner of the flat. Once the transfer is regularised with the collector, the flat can then be transferred to your name.
 
NOTE
We will not be answering queries posted in the comments. Only questions sent through the Moneylife Foundation's Legal Helpline will be answered. If you want to seek guidance or ask questions to Mr Shanbhag, kindly send it through Moneylife Foundation's Free Legal Helpline. Here is the link: https://www.moneylife.in/lrc.html#ask-question
 
Disclaimer: The guidance provided in these columns and on our Legal Helpline is on the sole basis of the facts provided by the reader/questioner and does not amount to formal legal advice in any form whatsoever. 
 
(Shirish Shanbhag has an MSc in Organic Chemistry, a Diploma in Higher Education, and a Diploma in French and has completed his LL.B. in first class in 2021. Before his retirement, he was a junior college teacher at Patkar College from July 1980 to May 2012, teaching theoretical and practical chemistry. Post-retirement in 2012, he started providing guidance and counselling to people on several issues, specifically focusing on cooperative housing society-related matters. He has over 30 years of hands-on experience in all matters about housing societies and can provide out-of-box solutions for any practical issue.)