It is safe to say that a city like Mumbai has more buildings than it has trees. But to own a house in Mumbai, one of the most expensive cities for real estate is not a cake walk. So you’ve purchased a house in an old establishment or planning to invest in an upcoming project; do you as a potential buyer crosscheck if the building is registered? Any and every person who buys a flat or a shop should be in the know of the legalities & also basic know-how about the registration and also be aware of their rights.
One of the most important responsibilities of a builder is to register the housing society, which can be done even during the construction phase. It is in the best interests of the members of the housing society to register formally & legally as soon as possible.
As per the law, at least 5 or 51% of the total flat owners/ shop holders can come together & register. A housing society enables the flat & shop owners to come together & acquire all the rights & services from the builder.
Some benefits of registering include, the builder cannot change the construction plan if the land is in the name of the organization, he also cannot claim the FSI (incremental floor area index) which prevents extra construction without permission. It is comparatively easier for unit members to hold legal charges against the builder in case of any fraud. Registering also facilitates easy collection of maintenance charges by the flat/ shop owners.
In recent times, many scams by builders have come to light keeping the flat/shop owners in a lurch. If your society is not registered, take action & follow this 9 step guide to safeguard your real estate investment.
Step 1 :- A minimum of 10 members are required to form a cooperative housing society.
Step 2 :- Selection of a chief promoter by majority amongst the individuals interested to form a society, assisted by a provisional committee.
Step 3:- The chief promoter finalizes the name of the society
Step 4: An application on Intention to form a society has to be submitted to the registration authority, the name selected by the chief promoter to be shared for confirmation. The authority will thereby issue a certificate if the name decided is in conformity with the existing laws.
Step 5 :- The entrance fee and the share capital must be collected from the prospective members to meet the statutory requirement under laws.
Step 6 : Once the entrance fees & share capital is collected & in place; a bank account in the name of the society is to be opened with respect to the branch of the bank as permitted by the registrar. Please note, this step has to be completed within 3 months/ 90 days after receiving the name confirmation certificate.
Step 7 :- The application of registration has to be made with a mandate set of documents including :
1) List of promoter members
2) Four copies of the bye-laws
3) Bank certificate
4) Detailed explanation of working of the society
5) Statement of accounts
6) Affidavits and certificates from advocate
7) Other documents such as indemnity bonds, any documents specified by the registrar also have to be submitted.
8) 7/12 extract
Step 8 :- The registrar of the municipal ward has to acknowledge the receipt of the application after entering the particulars in the ‘register of application’ book & issue a token to the prospective members who can timely be updated of the status on the registration process.
Step 9 :- Once the authorities verify the submitted documents, which need to meet all legal requirements, they will notify the successful completion of registration in the official gazette mentioned by the state or central government & thereby forward the legal document to the members on completion.
Sahil Lohia, founder of an upcoming start-up, The society consultants, believes the registration of society as the most important aspect before making a purchase.