Transfer of membership in a Co-operative Housing Society is a statutory process, not merely an administrative formality. When a flat is sold, the Society must ensure compliance with provisions under the Maharashtra Co-operative Societies Act, 1960, relevant Rules, and the Model Bylaws (especially Bylaws No. 38 to 40) issued by the Government of Maharashtra.

This article provides a comprehensive checklist and legal explanation of documents, fees, and procedures required for transfer of membership.

1. Legal Framework Governing Transfer

The transfer of shares and interest of a member is governed by:

• Section 29 of MCS Act, 1960 – Transfer of shares or interest
• Rule 24 of MCS Rules, 1961 – Procedure for transfer
• Model Bye-laws No. 38 to 40 – Housing Society transfer procedure
• Government Circulars/GRs regulating Transfer Premium limits

➡️ The Society cannot refuse transfer without valid legal grounds.

2. Mandatory Documents for Transfer of Membership

A. Forms to be Submitted

1. Form 20(1) – Notice of Transfer (Seller)
2. Form 20(2) – Consent of Transferee (Buyer)
3. Form 21 – Application for Transfer (Seller)
4. Form 23 – Application for Membership (Buyer)
5. Form 13 – Resignation of Membership (Seller)
6. Form 14 – Nomination Form (Buyer)

These forms are prescribed under the Model Bylaws and are mandatory for legal validity.

B. Transaction & Ownership Documents

1. Certified True Copy of Registered Agreement for Sale
   • Must be duly stamped and registered
   • Proof of legal transfer of ownership
2. Possession Letter
   • Confirms physical possession handed over to Buyer

C. Compliance & Declarations

1. Form 3 – Undertaking for Use of Flat (₹200 Stamp Paper)
   • Buyer declares usage as per Society norms
2. Form 4 – Declaration for Non-Earning Member (if applicable)
3. Form 27 – Declaration for Holding Multiple Flats

3. Financial Compliance Requirements

A. Society Dues Clearance

• Seller must clear all outstanding dues
• Society should issue a No Dues Certificate

B. Bank NOC (No Lien)

• Confirmation that the flat is free from encumbrance
• If loan exists, bank NOC is mandatory

4. Statutory Charges Payable

A. Transfer Fee

• ₹500 (Fixed as per Model Bylaws)

B. Transfer Premium

• Maximum ₹25,000 (as per Government of Maharashtra Circular)
• Society cannot charge beyond prescribed limit

⚖️ Any excess recovery is illegal and challengeable.

C. Entrance Fee

• ₹100 per member (Buyer)

5. Legal Procedure for Transfer

1. Seller submits transfer application with required forms
2. Buyer submits membership application
3. Society verifies:
   • Agreement validity
   • Dues clearance
   • Compliance with bylaws
4. Managing Committee places application before meeting
5. Resolution passed approving transfer
6. Share Certificate endorsed/transferred

Timeline:
Society should process within 3 months, failing which it may be deemed approval under law.

6. Important Legal Safeguards

✔ Society cannot refuse transfer arbitrarily
✔ No additional charges beyond prescribed limits
✔ No insistence on:

• Donation
• Compulsory contributions
• NOC from Society for sale (as per circulars)

✔ Transfer must be based purely on:

• Valid documentation
• Compliance with bylaws

7. Common Issues & Legal Remedies

Issue	Legal Position
Excess transfer premium	Refund claim + complaint to Registrar
Delay in transfer	Deemed membership or legal notice
Refusal without reason	Appeal under Section 23 of MCS Act
Illegal conditions imposed	Challenge before Co-operative Court

8. Practical Checklist (Quick Reference)

✔ Form 20(1), 20(2), 21, 23
✔ Form 13 (Resignation)
✔ Form 14 (Nomination)
✔ Registered Agreement Copy
✔ Possession Letter
✔ Society Dues Cleared
✔ Bank NOC
✔ Transfer Fee ₹500
✔ Transfer Premium (Max ₹25,000)
✔ Entrance Fee ₹100
✔ Form 3, 4, 27 (if applicable)

Summary 

Transfer of membership is a regulated legal process, ensuring transparency, protection of Society interests, and rights of incoming members. Societies must strictly adhere to provisions under the Maharashtra Co-operative Societies Act, 1960, Model Bylaws, and Government circulars.

Any deviation—especially regarding excess charges or refusal of transfer—can attract legal consequences and be challenged before the appropriate authority.

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Transfer of Membership in a Co-operative Housing Society (Maharashtra) – Complete Legal Guide