Corporative s

HOUSING CO-OPERATIVES

PROJECT ON:-


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COMPILED BY:-

NAME ROLL NO.

NEHA MISTRY 14SABINA MUSA 15

MUSTAFA KESARYA

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MOIZ PAKITWALA 33HEBA QUAMER 40

SUMITTED TO:-

PROF. SHAMIM

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WE ARE HIGHLY AKNOWLEDGED TO THANK THE FOLLOWING PEOPLE IN OUR PROJECT

COMPLETION.

FIRSTLY WE WOULD LIKE TO THANK PROF. A. E LAKDAWALA FOR GIVING US A CHANCE TO

DEVELOP OURSELVES.

ALSO WE WOULD LIKE TO THANK FROM THE BOTTOM OF THE HEART PROF. SHAMIM FOR HELPING AND GUIDING US AT EVERY STEP.

LASTLY, WE WOULD LIKE TO THANK OUR PARENTS FOR HAVING FAITH IN US AND

SHOWING US THE RIGHT WAY.

THANK YOU.

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INDEXINTRODUCTION 05

HOUSING CO-OPERATIVES IN INDIA

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CONTEXT 09

THE CO-OP HOUSING MOVEMENT 11

STATISTICS 12

TYPES OF HOUSING CO-OPERATIVES

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TYPES OF SOCIETIES-SUPPORT SYSTEM FOR HOUSING CO-OPERATIVES

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OTHER CHARACTERISTICS OF INDIAN HOUSING CO-OPERATIVES

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LEGAL STATUS 16

OWNERSHIP 17

FORMATION OF COOPERATIVE HOUSING SOCIETY

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MEMBERS OF A HOUSING SOCIETY 19

COMPANY CAN BE A MEMBER OF A HOUSING SOCIETY

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A MEMBER CAN TRANSFER/SELL HIS FLAT

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A SOCIETY CAN EXPEL A MEMBER 21

PROCEDURE FOR EXPELLING A MEMBER

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CESSATION OF MEMBERSHIP 23

RIGHTS OF A MEMBER 24

DUTIES OF SOCIETY TOWARDS ITS 25

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MEMBERS

Dispute with society is resolved 26

MEMBERS CAN APPROACH CONSUMER FORUM FOR REDRESSING HIS GRIEVANCE

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WHAT ARE TO BE CHECKED BEFORE BECOMING A MEMBER OF A SOCIETY?

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WHAT ARE TO BE CHECKED BEFORE PURCHASING A FLAT FROM A MEMBER OF A SOCIETY?

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CAN A HOUSING SOCIETY CHARGE TRANSFER FEE FROM ITS MEMBER WHEN HE TRANSFERS/SELLS HIS FLAT?

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WHO ARE RESPONSIBLE FOR THE CONDUCT OF THE BUSINESS OF A HOUSING SOCIETY?

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WHAT IS THE FREQUENCY OF THE MEETINGS OF THE MANAGEMENT COMMITTEE?

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WHAT IS THE TIME LIMIT FOR A POA TO ACQUIRE MEMBERSHIP OF A HOUSING SOCIETY?

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WHAT IS FREEHOLD AND HOW IS IT DONE FOR A SOCIETY FLAT?

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WHETHER FREE HOLDING OF FLAT CHANGES THE STATUS OF A HOUSING SOCIETY AS THE OWNER OF THE LAND AND BUILDING?

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HOW A HOUSING SOCIETY’S BYELAWS AMENDED?

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Time limit for holding the Annual 33

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General meeting of a housing society?

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INTRODUCTION

A housing cooperative is a legal entity—usually a corporation—that owns real estate, consisting of one or more residential buildings. (This is one type of housing tenure.) Each shareholder in the legal entity is granted the right to occupy one housing unit, sometimes subject to an occupancy agreement, which is similar to a lease. The occupancy agreement specifies the co-op's rules. Cooperative is also used to describe a non-share capital co-op model in which fee-paying members obtain the right to occupy a bedroom and share the communal resources of a house that is owned by a cooperative organization. Such is the case with student cooperatives in some college neighborhoods in the United States.

DEFINITIONCooperative housing is a housing project where a group of people comes together to form a non-profit corporation to take joint title over a property, with each family living in their own apartment or floor. Their "rent" actually covers their split of the monthly cost of financing and maintaining the building. There are no landlords; each tenant has rights, and a board is elected to handle management responsibilities. Since they are owners of the property, they are able to take tax deductions unavailable to traditional tenants and have much more control over the building, who moves in and how it is maintained.

BEGINNINGThe first housing cooperatives in the United States were formed in New York City. In the late 1800's there was a great need for quality, affordable housing for workers. Reformers, unions and trade groups all wanted an alternative to the slums and tenement housing that was

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the only choice for many workers. They found private investors who were willing to take on these projects with a limited return, called "home clubs." The first big boom in cooperative housing occurred after World War I, when a post-war economic surge renewed the need for affordable housing. Built in 1918, the Finnish Home Building Association in Brooklyn, New York was the first true co-op project.

First BoomDuring the 1920s, co-op projects proved to be popular. Applicants outnumbered spaces by as many as three to one. By the middle of the decade, co-ops could be found in 16 American cities, primarily in working class cities such as Chicago, Buffalo, Detroit, Philadelphia and San Francisco. Large co-op developments like Amalgamated House project and the Hillman House projects in Bronx, New York, funded in part by the pension fund of the Amalgamated Clothing Workers Union, became the models for affordable co-op housing. They took advantage of the Limited Dividend Housing Companies Act of 1927, which provided tax exemptions and eminent domain rights to investors in middle class housing.

SECOND BOOMAfter World War II, there was another surge in the need for affordable housing for those returning from the war. New York became home to a large share of the nation's co-op housing projects. During the period from 1945 to 1960, most of these projects were funded by a combination of federal, state and union money, using programs only available in New York. In 1950, the federal government expanded low-down payment Federal Housing Administration (FHA) loans to purchasers of co-op shares. Many co-op projects built in the 1950s, like the Rochdale Village in Queens, New York, were self-

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contained communities with their own shopping, schools, clubs, banks branches and services. There were also many conversions of rental properties to co-ops.

HOUSING CO-OPERATIVES IN INDIA

HISTORY

Co-operatives in India were introduced by the British primarily to aid small-scale farmers and to improve access to rural credit. The first Co-operative Societies Act was adopted in 1904, which then only included credit co-operatives. The act was soon amended to grant the registration at the State level of non-credit co-operatives, including housing and its administration, allowing them to adapt the legislation to prioritize local needs, in the years 1912 and 1919 respectively. In tandem with cooperative societies, the co-operative housing movement started todevelop at the beginning of the 20th century. Bangalore Building Co-operative Society, the first housing co-operative in India, was founded in 1909 in the State of Karnataka (former State of Mysore). In 1913, the State of Maharashtra (former State of Bombay) set up a non-official body, the Bombay Co-operative Housing Association, which did a pioneering job in propagating co-operative housing. Among many milestones, the association elaborated model by-laws

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which were used in the organisation of several housing co-operatives. It was also the first one to get the financial participation of the state in the affairs of the housing co-operatives. The political context and public environment continued to be supportive of the development of co-operatives by the time India emerged independent. In fact, the first Prime Minister of India, Jawaharlal Nehru, supported the growth of co-operatives as he visioned them as “a part of his paradigm of democratic socialism”. However, the development of housing co-operatives remained marginal until the 1950s, mainly due to an inadequate organisational support structure and an unsupportive legislative and administrative framework. Initiatives were undertaken to provide housing for middle and low-income groups in the former states of Madras and Bombay. For example, in 1950 about 4,000 houses were built and 12,000 were under construction by 273 housing co-operatives in the State of Madras whereas in the State of Bombay, 3, 500 houses were built, 229 were under construction by 315 housing co-operatives.

The Report of the Working Group on Housing Co-operatives released in 1964 marked a turning point for Indian co-operatives. It stated that housing co operatives are the best means to provide decent houses at affordable price for lower-income groups. One such recommendation led to the foundation of the National Co-operative Housing Federation of India in 1969. Circumstances changed when the co-operative housing sector received explicit support through successive Five Year Plans implemented by the Government (the 1st plan was instituted in 1951-56). The Government of India invested large sums of money toimprove the economic conditions of the people through innumerable social, economic and institutional means, along with around one-third of the money allocated to housing in the first plan. The share was 17% in the tenth plan covering the period 2002-2007.

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Although, the housing share in these plans has decreased over the years, considerable progress has been made. Simultaneously, a strong support network – both at state and National Federation levels - was brought into action to assist in the development of housing co-operatives. Cooperative Acts and Rules were extended and adopted in every state facilitating the registration of housing co-operatives.Housing co-operatives were particularly prevalent in Delhi, Gujarat, Haryana, Maharashtra, Uttar Pradesh and West Bengal. Two events in 1988 changed the face of Indian Housing Policy. First, the NationalCommission on Urbanisation inferred that housing should, from then on, not restrict itself to the aim of providing shelter, it should explore the broader context of urban development. Secondly, the United Nations Centre for Human Settlements (UNCHS) steered Governments to adopt an “enabling approach” towards housing, i.e. supporting the role of the private and third sectors in housing instead of direct public intervention.Consequently, India along with its states removed legislative barriers to facilitate the participation of the sectors.In five decades, the co-operative housing movement in India has grown from strength to strength to a commendable figure of 92,000 when compared to a mere 5,564 housing cooperatives at the beginning of 1960. Housing co-operatives also flaunt a proud membership of 6.6 million people.

CONTEXT

Since the early late 1990s, India’s population has grown at an average of 2% annually, within which the urban

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population, mega cities and slum populations grew by 3%, 4% and 5% respectively. Industrialisation and urban migration have created a very serious and critical housing situation. The UN Report “State of World Population” indicates that 29% of the Indian population is urban and it is expected to approach 41% by 2030. Currently, 55% of the present urban population lives in slums. In the year 2007, the housing deficit in India was estimated to be 24.7 million houses in urban areas and 15.95 million houses in rural areas, totalling 40.66 million units.All round participation has been encouraged from citizens and housing organizations to tackle this housing crisis, instead of relying solely on the direct intervention of the government. However, the government has put in place the essential conditions to assist the development of affordable housing. Over the years, the co-operative housing sector has gained credibility and is trusted as an able entity to provide adequate solutions to the housing challenges in the country. The co-operative housing sector thrives to assist low-income people in attaining decent living conditions through slum improvement drives, affordable housing in rural settings and where private developers are not willing to intervene. Upon realizing the benefits of housing co-operatives coupled with its “enabling” approach, the National Housing Policy explicitly promoted housing co-operatives in all segments of the population and encouraged the efforts of the co-operative housing movement through preferential allotment of land and house sites, convenient availability of financing and by gradually removing legal and technical limitations.However, today the path of success continues to not be devoid of obstacles. With the scarcity of affordable land, the need rises for specific urban land regulations. Availability of financing is still a major problem for many. The high cost of building materials and the inexistent/poor infrastructure (water, electricity, transport etc.) add to the woes of building housing.In addition, as the very nature of housing cooperatives is to empower people to control their housing conditions, the

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movement needs to set up adequate training programs for members, directors and employees. It is a quite thoughtful challenge for a country with about 35% of its population being illiterate. The concept of urbanisation comes with its share of complexity: housing, employment and poverty are interlinked. Any strategy to address the proliferation of slums and inadequate shelters must take into consideration these different elements. The cooperative housing sector advocates for a multi-objective approach. NCHF has submitted a proposal to tackle the problem of slums with the “Concept of Housing the Slum Dwellers through Co-operatives”. NCHF proposes to develop multi-purpose cooperatives addressing the link between employment, housing, and poverty. The Concept was debated in 2004 and endorsed by the then Ministry of Urban Employment and Poverty Alleviation.

THE CO-OP HOUSING MOVEMENT

The co-operative housing movement in India is a four tier structure: housing cooperatives, district federations, state-level federations and the national federation.Set up in 1969, the National Co-operative Housing Federation of India (NCHF) is the nation-wide organization for the co-operative housing movement in India. Founded by 6 state-level federations, NCHF takes the lead in promoting, co-ordinating and facilitating the development of housing co-operatives, along with providing guidance to housing cooperatives and their federations. NCHF is also sponsored

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by the Ministry of Housing and Urban Poverty Alleviation which enables them to receive regular grant-in-aid.In addition to a vigorous advocacy and representative role for housing co-operatives, NCHF regularly publishes books and bulletins and undertakes research projects to inform and disseminate information to housing co-ops, the States and the public agencies, and the general public. NCHF has opened a training centre in its premises that delivers courses to member co-operators, directors and the staff of federations and housing cooperatives. It also actively organises educational conferences. NCHF has also set up an insurance program for the benefit of housing co-operatives in collaboration with the United India Insurance Company and Bajaj Allianz General Insurance Company. It works closely with the Government of India and state governments to find ways to provide better housing for all and acts as a liaison between housing co-operatives and financial institutions.The 26 state-level federations are members of NCHF. The constituent team of NCHF includes a 23 member strong Board of Directors, including one chair, two vice-chairs, 19 directors and a NCHF managing director. A seven member Executive Committee also assists the Board.The function of the 26 state-level federations is in playing a significant role in thepursuance of co-operative strategy. It not only provides financial assistance to housing co-operatives in their respective jurisdiction but they also provide guidance on technical matters and assist them in the general co-ordination and supervision of activities, such as assisting them in obtaining building materials. As an example, the Pondicherry Cooperative Housing Federation has set up a Pondicherry Co-operative Building Centre whose main objectives are to “set up manufacturing units of building materials, purchasing bulk quantity of materials for construction of buildings and sell them off to members and public at fair and reasonable price”. An idea to promote the use of certified low cost materials helps them to bring a more cost-effective methodology to the construction

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process. The centre has received several awards for its work. 31,000 out of the 92,000 housing co-operatives in the country are members with statelevel federations. Non-affiliated housing co-operatives can receive financing from other sources. There are seven relatively new district federations based in the states of Maharashtra, Gujarat and Uttar Pradesh, whose mandate is to assist housing co-operatives in a particular district.

STATISTICS

The sector has flourished since its inception. Today, there are 92,000 housing cooperatives with over 6.6 million members. Its pride lies in creation of about 2.5 million dwellings.Many state-level federations have financed rural co-operative housing initiativesbenefiting lower income groups. As such, the housing co-operative movement has not isolated or ignored the housing needs of rural areas; in the country, close to 6,000 housing co-operatives in rural areas have contributed in the construction of over 947,000 units by 2008. The biggest housing co-operative in India is Vidarbha Premier Co-operative Housing Society located in Gandhi Sagar, Nagpur, in the State of Maharashtra. It was founded in 1930 by 12 members. By March 2008, the membership had reached 40,000 members. It is financially completely self-sufficient.Apart from serving the basic cause of Housing co-operatives, its contribution toward human development lies in creating one million jobs every year in India. The job opportunities in housing cooperatives are related to:Organisational management and administration;Planning, designing and construction of housing units;Post construction management of services and maintenance of houses and community assets;

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Production, transport, storage and delivering of building materials;Real estate business related activities.

TYPES OF HOUSING CO-OPERATIVES :

o Tenant Ownership Housing Societies: The land is held either on leasehold or freehold by the societies; the members own the houses, and are leaseholders of the land. They must strictly comply with regulations regarding subletting and transferring of houses but they can build their houses according to their own needs and taste.

o Tenant Co-Partnership Housing Societies: The societies hold both land and building, either on leasehold or freehold basis, and members have an occupancy right upon paying an initial share and a monthly rent.

TYPES OF SOCIETIES-SUPPORT SYSTEM FOR HOUSING CO-OPERATIVES

o Housing Mortgage Societies: These are like credit societies which lend money to their members for the construction of houses. Though, the arrangement for the construction is the member’s responsibility.o House Construction Societies or House Building Societies: They build the houses on behalf of members, which are then handed over to them upon completion and the money spent is recovered through loans.

OTHER CHARACTERISTICS OF INDIAN HOUSING CO-OPERATIVES ARE:

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Basic Amenities: They manage the basic amenities like water, electricity, sanitation. Education and Recreation: They build and manage schools, libraries, parks, and gardens.Health and Lifestyle: They can develop programs for the benefits of their members such as health programs, youth programs, collective transportation arrangements, and ecological improvement programs.They are managed by paid/honorary staff and an elected board of directors.

Financing Housing co-operatives are financed by members’ shares and savings and assistance from their federations or other financial institutions. The federations obtain financing from:Shares from the housing co-operatives, the States and other co-operative institutions;Loans from the Housing and Urban Development Corporation (HUDCO), theNational Housing Bank (NHB), the Life Insurance Corporation of India (LIC), commercial and cooperative banks, deposits from members;Debentures guaranteed by the Government. State Federations borrow loans from funding agencies and make them available to their affiliated primary housing cooperatives as well as individual members. They charge interest margin of around 1% to meet their administrative costs.

Legal Framework

The legal instruments for the housing co-operative sector are:State Co-operative Societies Acts and Co-operative Societies Rules administered by the Registrar of Co-operative Societies;

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National Building Code (particularly in the context of recent earthquakes);Multi-State Co-operative Societies Act and Rules for the National Federation and Multi-State Cooperative Societies.The states of Delhi, Goa, Jammu & Kashmir and Madhya Pradesh have included specific provisions about housing co-operatives in their respective Co-operative Acts, which should assist in democratic and transparent management. This welcome initiative has encouraged other states to follow suit.

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LEGAL STATUSAs a legal entity, a co-op can contract with other companies or hire individuals to provide it with services, such as a maintenance contractor or a building manager. It can also hire employees, such as a manager or a caretaker, to deal with specific things that volunteers may prefer not to do or may not be good at doing, such as electrical maintenance. However, as many housing cooperatives strive to run self-sufficiently, as much work as possible is completed by its members.

A shareholder in a co-op does not own real estate, but a share of the legal entity that does own real estate. Co-operative ownership is quite distinct from condominiums where people own individual units and have little say in who moves into the other units. Because of this, most jurisdictions have developed separate legislation, similar to laws that regulate companies, to regulate how co-ops are operated and the rights and obligations of shareholders.

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OWNERSHIP

Each resident or resident household has membership in the co-operative association. Members have occupancy rights to a specific suite within the housing co-operative as outlined in their "occupancy agreement", or "proprietary lease" which is essentially a lease.

In some cases, the co-op follows Rochdale Principles where each shareholder has only one vote. Most cooperatives are incorporated as limited stock companies where the number of votes an owner has is tied to the number of shares owned by the person. Whichever form of voting is employed it is necessary to conduct an election among shareholders to determine who will represent them on the board of directors (if one exists), the governing body of the co-operative. The board of directors is generally responsible for the business decisions including the financial requirements and sustainability of the co-operative. Although politics vary from co-op to co-op and depend largely on the wishes of its members, it is a general rule that a majority vote of the board is necessary to make business decisions.

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FORMATION OF COOPERATIVE HOUSING

SOCIETY

An application for registration in Form No. 1 should be signed by 60 members who are forming the society. Along with the application the following documents should also be filed.Four copies of the proposed byelaws duly signed by each of the signatory to the application.A certificate from the Financing bank that the amount of share capital raised by the promoters has been deposited in the name of the proposed society in a suspense account.A list of persons who have contributed to the share capital of the society together with the amount contributed by each of them and the entrance fee paid by them.The scheme explaining the economically sound functioning and successful working of the society.A declaration on oath from each of the promoter members to the effect that he/she is not a member of the family of any promoter joining in the application for registration.An affidavit from each promoter members stating that He/she does not own a residential house or plot of land for construction of a residential house thereon in his own name or in the names of his spouse or dependent children on leasehold or freehold basis in NCT of Delhi.He /she or spouse or any dependent children is not a member of any other housing society. He/she or spouse or any of the dependent children is not dealing in the business of purchase or sale of house or land in the NCT of Delhi either as principal or agent.A statement showing financial position of each promoter. A certifiedCopy of the resolution passed by the promoters specifying the name andAddress of one of the applicants [generally the Chief Promoter] to whom the

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Registrar may address his correspondence before registration and handoveror dispatch the certificate of registration. The application could be either sent by Registered post or delivered by hand to the Registrar. The Registrar shall receive the application and issue an acknowledgement to the applicant and shall enter the particulars of the application in the Register maintained in Form No.2 for the purpose.

MEMBERS OF A HOUSING SOCIETY

The DCSA 2003 prescribes several types of persons who are eligible to become members of a cooperative society. Since a housing society prima facie is a cooperative society these types of persons are entitled to seek membership in a cooperative housing society. The following are the persons who may become members of a cooperative society.An individual competent to contract under section 11 of the Indian Contract Act. However, no individual can seek admission to a co-operative society exclusively formed for the benefit of students of a school or college unless he is a student. Again, no individual would be eligible for admission as a member of any financing bank or federal co-operative society except as provided in clause (m) of section 2.Any other co-operative society.The Government.A firm, a joint stock company, or any other body corporate constitutedunder any law.Such class or classes of persons or association of persons as may be notified by the Government in this behalf.

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COMPANY CAN BE A MEMBER OF A HOUSING

SOCIETY

Under the 2003 Act a company or a partnership firm can become a member of a cooperative society. Since housing society is also a cooperative society this equally applies to housing society also. It is be noted that under the old 1972 act a company cannot be a member of a cooperative society. Therefore, if any society wishes to restrict its membership only to individuals, a suitable amendment has to be made in the byelaws of the society.

A MEMBER CAN TRANSFER/SELL HIS FLAT

Neither the membership in a society nor occupancy right in the flat can be transferred without fulfilling the following conditions.The transferor applies to the society for its consent for the transfer.The transferor pays the transfer fee to the society.Transferor pays all the dues to the society or the transferee agrees to pay the same. In the case of transferee paying the dues the society should consent for the same.The transferor vacates the flat and hands over the possession to the transferee.

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The transferee applies for and acquires membership in the society.

A SOCIETY CAN EXPEL A MEMBER

The DCSA 2003 has made an elaborate substantive provision for the expulsion of a member. A member can be expelled from the member ship of a housing society on any one or more of the following grounds:

If he has been a persistent defaulter in respect of any dues of the cooperative housing society.

If he has willfully deceived the co-operative housing society by making any false statement or submitting any false document to obtain the membership of such co-operative society.

If he has brought disrepute to the co-operative society or has done any other act detrimental to the interest and proper working of the co-operativesociety.

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PROCEDURE FOR EXPELLING A MEMBER

The DCSA 2003 provides an elaborate procedure for the expulsion of a member. Since expulsion is like a death penalty the procedural formalities as prescribed should be followed scrupulously else the expulsion would be rendered void.

Issuing Show cause noticeWhen a member attracts any one of the above conditions the society should send him three show cause notices through registered post. The Act does not prescribe any length for the notice. However, a 30 days notice would suffice. The notices could be sent in succession upon the expiry of the earlier notice period. For example, if the first notice is sent on 1-1-2005 the second notice should be sent on 1.2.2005 and the third notice on 3.3.2005.

Special resolution of the committeeIf the member is not making good the default in payment or showing valid reasons for non-payment or other impugned actions, the management committee can expel the member by passing a resolution to this effect. The resolution should be approved by at least three-fourth majority of the committee who are entitled to attend and vote thereat.

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Filing resolution with the RegistrarWithin 30 days after passing the resolution as above said, the resolution has to be filed with the Registrar for his approval.

Registrar’s approvalThe Registrar shall take cognizance of the resolution within 30 days and shall either approve or reject the expulsion within 180 days. If the matter is not decided by the Registrar within this 180 days the expulsion is deemed to have been approved.

Proceedings before the RegistrarThe Registrar shall hear both the parties i.e. the member who is sought to beexpelled and the society. The Registrar is empowered to take evidence on record, compel production of documents as a civil court.

CESSATION OF MEMBERSHIP

Cessation of membership is quite different from expulsion of membership. The expulsion of membership has to undergo the prescribed procedure whereas the cessation is automatic upon the happening of the eventuality.

The following are the eventualities upon which a member ceases to be a member of a housing society.

Member sells his flat/house on power of attorney and agreement to sell.

The member, before becoming a member of the housing society, already owns either in his/her name or in the name of spouse or dependent children.

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After becoming member in a cooperative housing society, during the currency of the membership or till allotment of any plot or flat as the case may be, acquires either in his/her name or in the name of spouse or dependent children a residential property exceeding 66.72 Sq.M. in Delhi. However, the acquisition of house or plot through inheritance is exempted. Further, a member would not be disqualified if he owns a house or land in an ‘abadi area’ in Delhi

RIGHTS OF A MEMBER

The following are the rights and privileges of a member:

Right to get certificate of allotmentEvery member of a co-operative housing society, whether registered before or after the commencement of this Act, to whom plots of land or dwelling units have been allotted, shall be issued certificate of allotment by the co-operative housing society under its seal and signature in such form as may be prescribed.

Right to hold according to terms of allotmentIrrespective of the provisions of the Transfer of Property Act, or the Registration Act, any allotment or re-allotment of a plot of land or dwelling unit in a building of a co-operative housing society to its member as per terms of allotment shall entitle such member to hold such plot of land or dwelling unit with such title or interest.

Right to transfer / inherit the propertyThe right, title and interest in a plot of land or dwelling unit in a building of the cooperative housing society (including the undivided interest in common areas and facilities) shall constitute a heritable and transferable immovable property.

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However, such land or building shall not be partitioned for any purpose whatsoever.

Right to undivided interest in common areaEvery member of a co-operative housing society shall be entitled to an undivided interest in the common areas and facilities pertaining to the plot of land or dwelling unit allotted to him.

Right to use the common areaEvery member of a co-operative housing society to whom a plot of land or a dwelling unit has been allotted shall have the right to use the common areas and facilities as prescribed by the co-operative housing society. In case of any violation or misuse by a member, the management committee is empowered to recover damages.Right to attend meeting and voteA member has right to attend all the meetings of the society and vote thereat.

Right to contest electionA member has right to stand for the election of the management committee.

Right to seek information from the societyA member can seek information relating to any transaction of the cooperative housing society and the society is required to furnish such information within 30 days from the receipt of request. The society may fix the application fee for this purpose.

DUTIES OF SOCIETY TOWARDS ITS MEMBERS

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The rights of members underline the duties of the housing society. The society should not discriminate between members and should not place unlawful restrictions on them. Besides this, the society should be prompt in attending to the complaints and grievances of the members as to provision of services.

Dispute with society is resolved

The Act provides for statutory arbitration for resolving the disputes that arise between members (past and present) and the society. The Act excludes the dispute arising between the paid employees and the society. As the statute itself prescribes a particular mode and forum for settlement of disputes resorting to any other mode may become futile. To put it in other words the disputes covered under section 70 of the Act have to be settled through the process of arbitration only. However, if the dispute is in the nature of dispute pertaining to deficiency in services, defects etc the same can be resolved in a consumer forum.

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MEMBERS CAN APPROACH CONSUMER FORUM FOR

REDRESSING HIS GRIEVANCE

Housing is covered under the term “service” in the Consumer Protection Act, 1986 (the CPA 1986). Therefore the services rendered to the members by the housing society falls within the purview of the CPA 1986. Further, the provisions of the CPA 1986 are in addition to and not in derogation of any provisions contained in any other Act This means that the provisions of the CPA are additional remedial avenues provided to the consumers by the Parliament if India. In view of the above, any dispute with a housing society by any member with respect to rendering any services such as allotment of house, possession of house, rendering maintenance services in relation to housing complex etc are covered by the CPA 1986 and a member can approach the Consumer Forums for claiming compensation and damages against the housing society for rendering deficient services. The Supreme Court has held in the case of Secretary, Thirumurugan cooperative Agricultural Credit Society v. M.Lalitha, (2004) 10 CLA-BL Supp that a member can approach consumer forum as a consumer to redress his grievance against a cooperative society. Housing society primarily being a cooperative society this judgment is applicable to cooperative housing society also.

WHAT ARE TO BE CHECKED BEFORE BECOMING A MEMBER

OF A SOCIETY?

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It is always advisable for any person who wants to become a member of a cooperative housing society to conduct a due diligence test. This due diligence becomes imperative in the light of recent cooperative housing scam. The following all or any of due diligence checks can be made by a prospective member.

Whether the housing society is registered under the Delhi cooperative Societies Act? If so obtain the registration number.

Verify the registration number provided by the society with the Registrar of cooperative societies.

Whether land has been allotted by DDA? If so ask for the allotmentparticulars.

Verify the land allotment particulars with the DDA.

Whether the society has any legal disputes with builder, or other persons?

If so obtain details of the same so that any additional liability on this count could be worked out.

Obtain the byelaws of the society.

Verify with the Registrar’s office whether the supplied byelaws confirms with the registered byelaws.

Whether the society is regular in conducting its meetings?

Whether the builder is accredited builder?

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WHAT ARE TO BE CHECKED BEFORE PURCHASING A FLAT

FROM A MEMBER OF ASOCIETY?

The purchaser has to verify and satisfy as to various aspects relating to a flat before he ventures into purchase a flat in a cooperative society from any member of the society. The following have to be checked:

Whether the seller is the member or POA?Whether the seller is sole owner or joint owner?Verify the title documents of the flat i.e. allotment letter, possession letter issued by the society in case of member. In case of POA besides the title documents of the original member verify the agreement to sell and the GPA. Whether the flat is mortgaged with any bank or financial institution?Is there any charge against the flat?Are there any outstanding dues from the seller to the society?NOC from the Society

CAN A HOUSING SOCIETY CHARGE TRANSFER FEE FROM ITS MEMBER WHEN HE TRANSFERS/SELLS HIS

FLAT?

Yes. This is the fee that has to be paid to the society by the transferor or the transferee or both as the case may be. The 1972 Act was silent on the issue of transfer fee while the

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2003 Act is very clear about it. As per the scheme of the Act the transferor is required to pay transfer fee to the society at the time of applying for consent letter. The transferee, in the case of freehold sale, is not required to pay the transfer fee. However, in the case of POA sale the transferee being a POA is required to pay transfer fee to the society for becoming a member after converting the leasehold to free hold. It is pertinent to note that the transferor in any case is required to pay the transfer fee. The demarcating aspect of transfer fee payable by the transferor and POA is that in the former case it the fee for transferring the occupancy right in the flat under transfer while in the latter it is for the transfer of Membership in the society. The transfer fee that can be charged from a POA holder is fixed at Rs.10, 000 while no such limit is fixed for the fee to be charged from the transferor. The society may decide as to the quantum of transfer fee to be charged from the transferor.

WHO ARE RESPONSIBLE FOR THE CONDUCT OF THE

BUSINESS OF A HOUSING SOCIETY?

The management of every cooperative housing society shall vest in its management committee. The general body meeting of a co-operative society shall constitute a committee as prescribed and in accordance with the byelaws

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and entrust the management of affairs of the co-operative society to such committee.

WHAT IS THE FREQUENCY OF THE MEETINGS OF THE

MANAGEMENT COMMITTEE?

The management committee can meet as many times as possible and there is no restriction on the number of meetings it can hold but there is a minimum requirement. In the case of a cooperative housing society, which is essentially a primary society, at least one meeting should be held in each month and there should be 12 such mandatory minimum meetings in a year. Suppose a housing society holds three meetings, say in the month of January, it does not mean that it need not have to hold a meeting in the month of February and there should be a meeting in February also. If a housing society does not hold any meetings for a consecutive period of 3 months, the Registrar may appoint an election officer to conduct the election to appoint a new management committee.

WHAT IS THE TIME LIMIT FOR A POA TO ACQUIRE MEMBERSHIP OF

A HOUSING SOCIETY?

The Act does not specify any time limit but requires the POA to acquire the membership of the housing society. It is for

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the society to fix the time frame for a POA to become a member.

WHAT IS FREEHOLD AND HOW IS IT DONE FOR A SOCIETY

FLAT?

When the DDA allots land to a cooperative housing society it gives it under perpetual lease and annual ground rent is collected from the society as lease charges. Ownership of the land remains with DDA and possession remains with the society. Under freehold, ownership of land is transferred to the members of the society with respect to the land on which the building is standing. The common area would be still under leasehold. The members who want to convert to freehold have to pay the necessary conversion fee to the DDA and the DDA transfers the land in their name. The process takes approximately 6 months.

WHETHER FREE HOLDING OF FLAT CHANGES THE STATUS OF A

HOUSING SOCIETY AS THE OWNER OF THE LAND AND BUILDING?

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No. Even though the member is the owner of the land beneath his flat, yet for all practical purposes the housing society is the owner of the land and buildings.

HOW A HOUSING SOCIETY’S BYELAWS AMENDED?

The power to amend the byelaws vests with the members of the cooperative housing society. Any proposal to amend the byelaws should be first approved in the general meeting of the society held for this purpose. The resolution should be passed by not less than two-third majority of the members having voting rights present at the meeting. Within 30 days from the date of the passing of the resolution, a copy of the same should be filed with the registrar along with the following documents:

A copy of the existing byelaws

Reasons justifying amendments

Four copies of the byelaws as they would stand after the amendment, duly signed by the authorized officers of the management committee of the society.

A copy of the notice calling the meeting in which the resolution proposing the amendments was passed. The Registrar shall register the amendment provided such amendment does not contrary to the provisions of the DSCA or rules framed there under, conflicting with the cooperative principles and would promote economic, social and cultural interests of the members

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What is the time limit for holding the Annual General

meeting of a housing society?

All that the DCSA say is that every year a cooperative society is required to have a annual general meetings of its members within 180 days from the date of closing of accounts. There is no power to the Registrar to extend the time limit. Therefore, the AGM of a housing society should be held within this 180 days time limit.

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Corporative s

Documents

Transcript of Corporative s