🏢 Builder Must Pay All Taxes Till Full Property Transfer: What Housing Societies Need to Know

In a significant decision protecting housing society members, the National Consumer Disputes Redressal Commission has ruled that the builder is fully responsible for paying all taxes and municipal dues until the property is officially transferred (conveyed) to the society.

This ruling came after a dispute between Nimesh Enterprises and the Mhatre Palace Co-operative Housing Society (Borivali West, Mumbai), where the society raised concerns over unpaid taxes amounting to ₹69,11,207. Despite partial possession being given, the builder had not completed the conveyance process.

The forum held that until the property is legally handed over, all expenses—including municipal taxes, water charges, and other statutory payments—must be borne by the developer. Flat owners or the society cannot be forced to shoulder the burden caused by the builder’s delay.

🔍 Key Takeaways from the Judgment

💡 Here are the most important highlights from the decision:

• Builder must clear taxes and dues until final handover.
• ₹69 lakh unpaid tax liability was acknowledged by the developer.
• The commission strictly rejected any delay tactics.
• A three-week timeline was given to settle the dues.
• Order was passed with the consent of legal counsels from both sides.
• Citing Section 6 of MOFA Act, 1963, the commission emphasized legal responsibility.
• The revision petition was disposed of, ensuring the society’s rights were protected.

🏛️ Why This Ruling Is a Win for Societies

Many housing societies face hardship when the developer delays conveyance but stops paying taxes and maintenance-related charges. This ruling clearly protects residents from unfair financial burden and ensures developers fulfil their obligations.

In simple words:

🔹 If the property isn’t officially transferred— the builder keeps paying, not the society.

📣 Expert Guidance for Housing Societies

If your society is facing conveyance delay or unpaid dues from the developer:

✔️ Document all pending dues and official communication with the builder

✔️ Demand a written confirmation before accepting possession

✔️ Refer to Section 6 of MOFA Act, 1963

✔️ Consult legal experts or society consultants

✔️ Consider filing a complaint under RERA or Consumer Forum if non-compliant

📌 Final Thought

This ruling sets a powerful precedent that protects flat owners from being financially penalized due to delayed transfer by the developer. It reinforces that consumer rights and legal compliance must come before developer convenience.