A buyer in Mumbai had agreed a fair price for a resale flat in a co-operative society in the western suburbs, and the paperwork was almost done when the society's managing committee named its terms for the transfer. Alongside the routine dues it asked for a large contribution to a welfare fund, framed as customary, and hinted that the no objection letter the buyer's bank wanted would follow only once it was paid. The number was several times what the law allows a society to charge to transfer a flat. The buyer paid it, because the deal was close and the pressure was real. He did not know that most of what he handed over was money the society had no right to demand.

The short answer. When you buy a resale flat in a Maharashtra co-operative society, the society transfers the seller's shares to you and issues a share certificate in your name, and the transfer premium it can charge is capped by a state government circular at 25,000 rupees in a municipal corporation area such as Mumbai. A society no objection certificate is not a legal requirement to buy or register the flat, though your home loan lender will usually insist on one. The trade off is uncomfortable but worth facing. Refusing an inflated welfare or development fund demand can mean friction with the committee, but those charges are not lawful, and paying them quietly is how they become the norm.

What is a share certificate and why does it matter in a resale?

The share certificate is your proof of membership in the society, and in a co-operative it is central to how the flat is held. A co-operative housing society owns the building and the land, and each flat owner is a member who holds a small number of shares in the society, evidenced by the share certificate, along with the right to occupy a specific flat. When you buy a resale flat, two things have to move together, the ownership of the flat through the registered agreement and the membership of the society through the transfer of those shares. The share certificate is what records the second half, so a transfer that registers the sale but never updates the society's records leaves you owning the flat on paper while the society still shows the seller as its member. That gap matters when you vote in the society, sell later, or deal with the building's redevelopment, so getting the share certificate reissued in your name is not a formality to postpone. Ask to see the existing certificate before you buy, and confirm it names the seller and matches the flat.

Is a society no objection certificate legally required?

No, a society no objection certificate is not a legal requirement for the sale or registration of a resale flat under the co-operative law. The model bye-laws framed under the Maharashtra Co-operative Societies Act list the documents involved in a transfer, and a society NOC is not among the things the law makes mandatory for the transaction itself. In practice, though, the certificate carries weight for a different reason. A home loan lender will almost always ask for a society NOC before releasing funds, which hands the managing committee informal leverage even where the law gives it none. This is precisely the point at which some societies attach conditions, tying the NOC or the share certificate to a payment they are not entitled to demand. Knowing that the NOC is a lender's comfort rather than a legal gate lets you separate what you genuinely need, which is a clean transfer and the lender's requirement met, from what the society may be using it to extract.

What can the society legally charge for the transfer?

The society can charge a capped transfer premium and a few small statutory items, and not much else. A state government circular issued in 2001 under Section 79A of the Maharashtra Co-operative Societies Act sets the ceilings, and they are all inclusive, so a society cannot split the total into separate heads to get around the limit. The table below sets out what a resale transfer can lawfully attract.

The transfer premium in a city like Mumbai is therefore capped at 25,000 rupees however the society dresses it up, the share value is only the face value of the shares set in the bye-laws, and the only other legitimate money is the seller's genuine arrears, which are the seller's liability to clear. A demand that goes beyond these is worth questioning rather than paying on trust.

Which charges can I refuse?

You can refuse any demand dressed up as a donation or an extra fund, because these fall outside what the circular permits. Contributions to a welfare fund, a development fund, an infrastructure fund or an administrative charge levied as a separate head are not legal transfer charges, and neither is a voluntary donation made a condition of issuing the no objection or the share certificate. Courts have treated such coerced payments as made under duress and held that the amounts are recoverable, in some cases with interest, which tells you how the law views them. The practical difficulty is that the money is usually demanded at the moment you have the least leverage, with the sale agreed and the lender waiting on the NOC. The way to hold the line is to ask for every charge in writing with the head it is levied under, pay the capped premium and the genuine dues, and decline the rest in writing rather than in a corridor conversation. A society acting correctly will have no trouble putting its charges on paper.

How does the flat and the membership actually transfer?

The transfer happens in two linked steps, one at the registration office and one at the society. First the sale is completed through a registered agreement for sale, on which stamp duty and registration are paid, and this is what makes you the owner of the flat. Then you apply to the society for membership and for the transfer of the seller's shares into your name, submitting the transfer forms, the registered agreement and the identity documents the bye-laws require, along with the seller's share certificate. The society places the application before its managing committee, records the transfer, and issues a share certificate in your name, completing the membership side. Doing the society step promptly after registration is what keeps the two records aligned, so the person the state shows as owner and the person the society shows as member are the same. Leaving it undone is a common and avoidable mistake, because the longer the society's register lags the sale, the harder it is to fix when the seller has moved on.

What should a society resale buyer do?

Work through these steps when buying a resale flat in a co-operative society.

1. Ask to see the seller's share certificate and confirm it matches the flat and the seller.
2. Check the society's records for any dues or charges outstanding against the flat.
3. Treat the society no objection as a lender requirement, not a legal gate on the sale.
4. Register the agreement for sale and pay the applicable stamp duty and registration.
5. Apply to the society for membership and transfer of shares with the required documents.
6. Pay only the capped transfer premium, the bye-law fees and the seller's genuine arrears.
7. Get any extra fund or donation demand in writing, and decline it in writing.

How does this fit the rest of my Mumbai checks?

Getting the membership right sits alongside the other society and registration checks a Mumbai buyer needs. Who the society records as the member is not the same question as who inherits a flat, a distinction we explain in our guide to why a nominee is not the owner of an inherited society flat, and the registration side leaves its own trail, which we cover in our explainer on the Index 2 document after registration. The share transfer, the registered agreement and the Index 2 are separate records that should all point to you once the deal is done. Aligning them is what turns a paid price into settled ownership, and the transfer charges you refuse along the way are simply the ones the law never allowed the society to ask for.

Frequently asked questions

How much can a Mumbai society charge to transfer a flat? The transfer premium is capped by a 2001 state circular under Section 79A of the Maharashtra Co-operative Societies Act. In a municipal corporation area such as Mumbai the ceiling is 25,000 rupees, all inclusive, so the society cannot split it into extra heads. Small bye-law fees and the seller's genuine dues are the only other lawful charges.

Is a society NOC mandatory to buy a resale flat in Maharashtra? No. A society no objection certificate is not a legal requirement for the sale or registration of a resale flat under the co-operative law. Your home loan lender will usually insist on one before releasing funds, which is why it still matters in practice, but that is a lender condition rather than a legal gate on the sale.

Can a society demand a welfare or development fund donation on transfer? No. Contributions to a welfare fund, development fund or similar head, and any voluntary donation made a condition of the transfer, fall outside what the transfer circular permits. Courts have treated such coerced payments as made under duress and held them recoverable, sometimes with interest. Get every charge in writing before you pay.

Why does the share certificate need to change in my name? The share certificate records your membership of the co-operative society, which is separate from owning the flat through the registered agreement. If the shares are never transferred, the society still shows the seller as its member while you own the flat, which creates problems when you vote, sell or deal with redevelopment.

Last updated 2026-08-31. PropNewz Team.