Table of Contents

Understanding Society Transfer Charges Legal Framework Governing Transfer Charges Key Changes & Procedures What's Changing/Being Streamlined?Maximum Transfer Charges Permitted Under the Law Transfer Premium in Housing Society: What You Need to Know Society Transfer Fees in Case of Gift Deed Society NOC Charges for Resale Flat Who Pays Society Transfer Charges: Buyer or Seller?Society Charges for Sale of Flat: Comprehensive Breakdown Legal Rulings Relating to the Transfer Costs Effect of The Bombay High Court's Decision on Transfer Costs on Property Purchasers and Sellers.What are the Requirements or Guidelines for Transferring Flats?What Steps Must be Taken for a Flat Transfer?Can a Cooperative Housing Society's Board of Directors Be Dismissed?Is the Builder's Transfer Fee Legal?Understand Society Transfer Charges With NoBroker: Frequently Asked Questions?

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Home Blog Real Estate Legal Guide & Laws Society Transfer Charges

What are Society Transfer Charges as per the Housing Act and Rules in 2026?

Published : January 31, 2025, 12:00 AM

Updated : January 2, 2026, 11:02 PM

Author : Vivek

Real Estate Legal Guide & Laws

Lease Agreement , Sale Agreement

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Summary

Society transfer changes are fees charged when a flat changes ownership, as per the Housing Act. In 2026, society transfer charges are generally capped to prevent misuse. In Maharashtra, the cap is usually ₹25,000, including membership transfer cost, and in Gujarat, it is commonly limited to around ₹10,000. These changes cover only nominal fees such as share transfer, documentation, and administrative expenses, ensuring transparency, affordability, and fair treatment of homebuyers, as mandated by cooperative housing society regulations.

Table of Contents

Society transfer charges are fees that a housing society collects when a property or a flat is transferred from one owner to another. These charges cover administrative expenses during the transfer process. According to the society transfer fees rule in 2026, a cooperative housing society in Maharashtra can charge up to ₹25,000 for the transfer of society. This limit is set under section 29A of the Maharashtra Cooperative Society Act 1960. Additional charges, like an entrance fee of ₹100, are applicable, and share transfer charges may also apply. Understanding the society transfer charges is important for both buyers and sellers so that they can prevent societies from overcharging buyers and ensure a smooth legal property transfer.

Understanding Society Transfer Charges

Understanding society transfer charges helps buyers and sellers avoid overpayment during property transfers. These fees cover administrative costs and are regulated. Society transfers charges as per the by-laws, following the Cooperative Societies Act, 2002 ensuring transparency, fairness, and legal compliance nationwide. [1]

Sale of Property: When a flat is sold, the buyer has to pay the society transfer charges. The society may also charge a transfer premium in a housing society, which is fixed at ₹25,000 in most states. This applies after receiving a non-objection certificate (NOC) from the society.
Gift Deed Transfer: A society cannot demand a transfer premium when gifting a flat to a family member. Only a nominal transfer fee is allowed. Society transfer fees in case of a gift deed are typically limited to ₹500 as per the cooperative housing guidelines.
Inheritance: When a flat is inherited through a will or a legal succession, the heir must inform the society and submit legal documents. No transfer premium is charged, but the basic transfer fee is applicable, and the documentation cost might be applicable for updating the society record.

Legal Framework Governing Transfer Charges

The legal rules of society transfer charges are based on the Maharashtra Cooperative Societies Act, 1960, which sets limits and procedures to ensure fair and transparent property transfer. Under this Act, the housing society cannot collect excessive fees during the ownership transfer. Moder By Law No.38 supports this and allows the society to charge a maximum transfer premium of ₹25,000 when a flat is sold, which is collected to cover the basic administrative cost and record update. To enforce this rule, the Maharashtra government issued a circular on August 9, 2001, officially capping a transfer change of ₹25,000. All societies must strictly follow this limit and cannot demand more from people. This ensures that the members are not unfairly burdened during property transfer. [2]

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Key Changes & Procedures

Transfer fees in society are regulated charges collected during property ownership to cover administrative tasks such as record updates, approvals, and compliance, ensuring transparent, smooth transfers for buyers and sellers. Below are the changes and procedure to keep in mind:

Transfer Fees: Societies may charge transfer fees, often capped at ₹25,000, to cover administrative costs such as updating records, issuing NOCs, and processing ownership charges. The buyers pay these fees, though the terms can be negotiated manually.
NOCs: The seller must apply for a No Objection Certificate from the society, clear all pending dues, and obtain formal approval before executing the sale.
Membership Application: The new owner submits the required documents, including the registered sale deed, application form, and identity proofs, to become an official member of the society.
Timeline: Societies are required to process applications within defined timelines, typically 30 days for issuing NOC and up to 90 days for granting new membership.
Document Submission: Essential documents include the registered Sale Deed, membership application form, valid ID proofs, passport-sized photographs, and a receipt for the payment of shared capital or transfer fees.

What's Changing/Being Streamlined?

Flat transfer fee society rules are being simplified to reduce delays, limit overcharging, and improve transparency, ensuring faster approvals, fixed timelines, digital documentation, and clearer responsibilities for societies, buyers, and sellers during property transfers. Check the changes below:

Capped Fees: A strict limit on transfer fees reduces arbitrary charges and protects buyers from overpayments.
Fixed Timelines: Mandatory deadlines for NOC issuance and membership approval ensure faster processing.
Digital Processes: Online applications, payments, and document uploads minimize paperwork and errors.
Clear Documentation: Standardized document lists reduce confusion and repeated submissions.
Greater Transparency: Displaying approved fees and rules helps members easily understand charges and procedures.

Maximum Transfer Charges Permitted Under the Law

In most cases, the property owner and buyer who ask the societies association for society share certificate transfer charges to change the buyer's name on the shareholding certificate are left with little alternative but to comply with its requests. However, it is unclear if the law permits a society to demand an unreasonable transfer fee. The resolution is contained in By-law No. 38 of the 2013 By-laws of the Maharashtra Model Society, 1960, which the Maharashtra government released via a circular dated August 9, 2001. [3]

It is clearly stated in the aforementioned by-law No. 38 and the circular dated August 9, 2001, that the premium transfer fee in housing society cannot exceed Rs 25,000. Many societies frequently require the property owner/purchaser to make the requested payment through a "voluntary donation" to avoid violating the cap on transfer costs noted earlier.

However, Bye Law No. 38 goes one step further to ensure that no excess donation or gift to any other funds or under any other pretext shall be reclaimed from the transferor or transferee.

Transfer Premium in Housing Society: What You Need to Know

A transfer premium in a housing society is a one-time fee paid by the new buyer to the housing society when the flat is sold. It is charged for the administrative cost and record update. As per the Maharashtra Cooperative Societies Act and Model Bye Laws, this premium is capped at ₹25,000. In a gift or inheritance case, societies cannot charge or demand more. This rule ensures fairness and makes sure people are not charged extra. Below are the differences between a transfer fee and a transfer premium:

Information	Transfer Fee	Transfer Premium
Purpose	Administrative processing	Record update and society fund contribution
Charged in	Sale, inheritance and gift	Only in the sale of a flat
Legal Limit	₹500 to ₹1000 (varies)	₹25,000 (maximum)
Applicability in gift	Yes	No
Based on By Law	Yes, (Model By Law 38) [4]	Yes, (Model By Law 38)

Society Transfer Fees in Case of Gift Deed

When a property is transferred as a gift deed, the rules for the society transfer fees are much simpler than those of a regular sale. Housing societies are not allowed to charge a transfer premium in such cases. As per the model By-laws, if the gift is made to a close family member like a spouse, children, parents or siblings, then only a nominal transfer fee of (₹500 to ₹1000) is applicable. This makes sure that the family can easily transfer their property without a financial burden. Societies are strictly guided to follow this rule and not overcharge or demand extra money from the people.

Society NOC Charges for Resale Flat

A No Objection Certificate (NOC) from a housing company is important in a resale flat transaction. This document claims that society has no objection to the transfer of ownership, and the seller has cleared all the dues. This NOC is beneficial when you need loans from a bank. Societies just charge a nominal fee of ₹500 to ₹5000( depending on their by-laws) for issuing the NOC. The societies cannot delay or deny the NOC without any valid reasons. It ensures transparency, protects the buyer's interest, and helps to complete the resale process smoothly.

Who Pays Society Transfer Charges: Buyer or Seller?

Society transfer charges paid by buyer or seller depend on the society's by-laws and mutual agreement. Generally, the buyer pays these charges, covering administrative and membership transfer costs, but buyers and sellers can negotiate who will pay during the property sale.

Society Charges for Sale of Flat: Comprehensive Breakdown

Society charges for the sale of a flat include various fees collected during ownership transfer. The society flat transfer fee covers administrative work, documentation, membership change, and compliance, helping ensure a smooth, legal property transaction.

Charge Type	Description
Transfer Fee	It is a one-time fee for processing the ownership charges (up to ₹25,000)
Share Certificate Transfer Fee	It is a fee for updating and issuing the share certificate (₹100 to ₹500)
Admission Fee	Entry fee for the new member (₹100)
NOC Charges	Fee for obtaining No Objection Certificate (₹500 to ₹5000)
Document Verification Charges	To verify the documents, some societies may change (₹100 to ₹1000)
Stamp Duty	Generally an amount of (₹25 to ₹100) is applicable

Legal Rulings Relating to the Transfer Costs

Indian courts have examined society transfer costs through landmark rulings, clarifying the legality of voluntary donations, transfer fees, delayed objections, and society powers, based on Bombay High Court and Supreme Court judgements with dates and petition. Below are the judgements to keep in mind:

Bombay High Court: Bombay High Court in Bharitya Bhawan case, Writ Petition 1094 of 2004 decided February 17, 2010, denied refund of contribution. [5]
Supreme Court View: Supreme Court SLP 11266 of 2010 decided November 9, 2011, upheld the ruling as the buyer challenged the society resolution late without protests. [6]
Limits on Societies: The Bombay High Court, in the Alankar Shakari case held that societies cannot profit, demand compulsory gifts, or impose only lawful charges or voluntary donations. [7]

Effect of The Bombay High Court's Decision on Transfer Costs on Property Purchasers and Sellers.

The decision of the Bombay High Court in the matter of Alankar Sahkari established the legal framework for any property owner or buyer to challenge the excessive demands of society transfer charges, regardless of whether it is referred to as a voluntary donation.

Whether a property buyer is prepared to start bitter litigation with a community where they want to reside for the foreseeable future remains, even though the legal remedies and the legislation have been fairly decided for transfer premiums in a housing society.

Members should protest against any such resolution being enacted in societies where there are presently no housing society transfer charges rules on paying the transfer charges as voluntary gifts or in any other way because it goes against the spirit of the legislation. Members can only stop such measures if they voice their concerns appropriately.

What are the Requirements or Guidelines for Transferring Flats?

Before the flat can be transferred to another member, the member must have owned it for an entire year.
Members who obtain ownership through a court order are exempt from the abovementioned condition.
Anyone planning to move out of their apartment must provide the society with a written 15-day notice.
The application must include good cause for the flat transfer (explained succinctly).
The transfer premium (if applicable), admission price, and transfer fee are all required, along with documentation from both the transferor and the transferee.

What Steps Must be Taken for a Flat Transfer?

It's always advisable to consult a legal professional or real estate expert to guide you through the specific requirements and legalities involved in a flat transfer in your jurisdiction. With that in mind, here are some pointers on the steps that must be taken for a flat transfer

Step 1: Documentation: Gather all necessary documents for the flat transfer, including the sale agreement, property title deeds, and identification documents for the buyer and seller.
Step 2: Verification: Conduct a thorough verification of the property documents to ensure their authenticity and legality. This step helps prevent potential legal issues or disputes later on.
Step 3: Agreement Execution: Prepare the transfer agreement and get it duly executed by both the buyer and seller. The agreement should outline the terms and conditions of the transfer, including the sale price, payment schedule, and any other relevant clauses.
Step 4: No Objection Certificate (NOC): Obtain a No Objection Certificate from the society or housing society where the flat is located. This certificate verifies that there are no outstanding dues, pending litigation, or objections regarding the transfer.
Step 5: Clearances and Permissions: Seek necessary clearances and permissions from local authorities, such as the municipal corporation or development authority, if required for the flat transfer.
Step 6: Stamp Duty and Registration: Pay the applicable stamp duty and get the transfer deed registered with the relevant authority as per the local regulations. This step is crucial for legally transferring the ownership rights of the flat.
Step 7: Financial Settlement: Ensure that all financial obligations, such as outstanding dues, pending maintenance charges, and property taxes, are settled before the transfer takes place. This step avoids any financial liabilities being transferred to the buyer.
Step 8: Handover and Possession: Arrange for the physical handover of the flat to the buyer after completing all the legal and financial formalities. The buyer should inspect the flat to ensure its condition aligns with the agreed-upon terms.

Can a Cooperative Housing Society's Board of Directors Be Dismissed?

The cooperative housing society board can be dismissed for violating transfer fee laws, as shown in Maharashtra cases, highlighting penalties, capped charges, and strict enforcement to protect flat buyers' rights nationwide.

Pune Case (2020): In 2020, the Pune deputy registrar disbanded the society's board for charging ₹1,25,000, exceeding the ₹25,000 cap, and banned directors from elections for a year.
First vs Second Sale: Society transfer charges in Pune apply only to resale flats, not to first-sale flats from builders; buyers pay the fees during transfer.
Mumbai Rules: Mumbai society demanding 2% transfer charges is illegal; the law allows a maximum of ₹25,000; buyers should request the demand and file a complaint with the registrar.

Is the Builder's Transfer Fee Legal?

is the builders transfer fees legal — *Legal insights on whether a builder’s transfer fees are permissible*

Although housing society transfer charges and service societies are permitted to collect transfer fees, a builder is not permitted to do so if it does not violate the rules. You may, however, be aware of some dishonest developers who demand society transfer charges. When a buyer approaches a builder for a NOC and a builder can use their influence to sway the home buyer, most complaints against the developer in such a situation arise. However, for the following reasons, it is unlawful to do this:

The Transfer of Property Act of 1882 prohibits such behaviour. It states that "a transfer of property passes instantaneously to the transferee, all the interest which the transferor is then capable of passing in the property and the legal occurrences thereof."
The Indian Contract Act of 1872 is violated since it infringes on a buyer's ownership rights over the property.
It differs from cooperative transfer charges by society. While the purchaser is a shareholder, a cooperative society owns the structure and the surrounding property. No such rights exist for builders.
Buyers should investigate whether developers who claim to be collecting the transfer fee on behalf of a cooperative housing society are attempting to prevent the society from being formed in the first place.
Under Sections 384 and 385 of the Indian Penal Code, a builder who tries to deceive a property buyer and induce them to pay the transfer fee may be held accountable (IPC). The Competition Act of 2007 forbids it as well and defines it as "abuse of dominant position." [8] [9]
GST on society transfer fees is applicable if the CHS is not otherwise exempt from GST registration. GST is applied to transfer fees at a rate of 18 per cent.

Understand Society Transfer Charges With NoBroker:

Understanding society transfer charges with NoBroker helps buyers and sellers avoid overcharging and delays. NoBroker offers expert legal guidance, document verification, NOC assistance, and end-to-end property services. With transparent pricing, dedicated relationship managers, online tracking, resale support, and compliance with housing laws, NoBroker ensures smooth, secure flat transfers, saving time, money, and stress for homeowners, investors, and first-time buyers.

Frequently Asked Questions?

Q: When to pay the transfer fee to society?

Ans: Depending on the city you live in, society transfer charges require payment of a transfer premium when a member sells shares and rights in a flat. This premium can be anywhere from Rs 25,000 to even a percentage of the buying consideration for selling the flat.

Q: Society transfer charges paid by whom?

Ans: Society transfer charges are typically paid by the property buyer, as part of the costs involved in acquiring rights to the apartment within a cooperative housing society.

Q: What are gift deed society transfer fees?

Ans: In society transfer fees, in the case of a gift deed, you must give the society Rs. 500 as a transfer "fee." The bye-law is very clear in this regard: If the transfer is within the family (defined by the bye-law as including mother, father, brothers, sisters, sons, daughters, sons-in-law, and daughters-in-law), then society CANNOT demand the transfer "fees/premium," not even as "donation" or under any other pretext.

Q: What are society transfer charges for resale flats?

Ans: Society transfer charges for a resale flat are fees imposed by a cooperative housing society for transferring ownership rights from the seller to the buyer within the society.

Q: What are the rules society transfer fees based on?

Ans: The rules society transfer fees are determined by the cooperative housing society's by-laws and cannot exceed the legal cap set by local government regulations.

Q: What is the transfer of Societies in Maharashtra?

Ans: Transfer of societies in Maharashtra refers to a legal process of changing the ownership of the flat in a cooperative housing society. It includes updating the record of the society, transferring the share certificate and paying the applicable charges. The Maharashtra Cooperative Societies Act, 1960, governs this process.

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Vivek,Author

With over 23 years of experience in Real Estate, and an architecture degree, Vivek is here to help others buy/sell or rent the right way. Through his writing you will find out what people look for, and what you can do to get the best out of your home, and also how to get the best for your home.

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