The eligibility of a registered real estate agent to serve on the managing committee of a cooperative housing society depends on the nature of the business they conduct within the society. The Maharashtra Cooperative Societies (MCS) Act clearly lays down disqualification rules to prevent conflicts of interest.
Legal Provision Under Section 154B-23 of the MCS Act
Section 154B-23 of the MCS Act specifies the disqualifications for committee members. It states that a person is not eligible to be appointed, nominated, elected or co-opted as a committee member if they are engaged in the business of letting, sub-letting, or selling flats in the same housing society of which they are a member.
At first glance, this clause may appear to disqualify all real estate agents. However, the key words in the provision are:
“…letting, sub-letting or selling flats in the housing society of which they are a member.”
This means the disqualification applies only when the member carries out such business within their own society.
When Is a Real Estate Agent Disqualified?
A member who is a registered real estate agent will become disqualified only if:
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They deal in sale, purchase, letting or sub-letting of flats belonging to members of their own society.
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They provide professional brokerage services to members within the same society.
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They have direct or indirect financial interest in property transactions within the society.
If the agent operates outside the society and does not handle transactions of flats belonging to members of their own society, the disqualification does not apply.
Conflict of Interest Under Bye-law 116
Bye-law 116 reinforces this principle by prohibiting any society officer from having:
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Direct or indirect interest in any contract with the society
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Interest in property transactions
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Any dealings that create a conflict of interest
Therefore, even if the agent is otherwise eligible, the society must ensure that no conflict of interest arises during their tenure.
Best Practice: Declaration from the Member
If a real estate agent wishes to:
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Contest elections, or
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Continue as a committee member
The managing committee should obtain a written declaration stating that the member:
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Will not engage in the business of selling, letting or sub-letting flats within the society
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Will not provide brokerage services to society members
This protects both the society and the committee from future disputes.
What If the Member Is Already Serving on the Committee?
If a committee member:
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Starts acting as a real estate agent within the society, or
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Is found to be involved in such transactions
They automatically incur disqualification under Section 154B-23.
The managing committee should follow due process:
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Take note of the alleged disqualification.
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Issue a written notice to the member.
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Give the member an opportunity to explain their position.
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Examine the explanation and evidence.
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If the disqualification continues, remove the member from the committee.
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Inform the District Deputy Registrar (DDR) about the action taken.
This ensures the removal is legally valid and procedurally correct.
A registered real estate agent is not automatically disqualified from becoming a committee member. The disqualification applies only when the agent deals in property transactions within their own society. If such activity occurs, the member becomes disqualified and can be removed after following proper procedure.
Societies should adopt a clear conflict-of-interest policy and obtain declarations from committee members to maintain transparency and avoid legal complications.
