Many flat owners in Maharashtra consider gifting their flats to family members to simplify succession planning or for other personal reasons. But one question frequently arises: Can the society demand transfer charges when a flat is transferred via a gift deed?
Here’s how the law and model bye-laws address the issue.
Transfer of Flats via Gift Deed
Under the Maharashtra Cooperative Societies Act and the Model Bye-laws, flats can be transferred by way of:
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Sale
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Exchange
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Gift
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Inheritance
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Nomination
When a member executes a gift deed, the transaction is recorded as a transfer of shares and interest in the society. However, the applicability of transfer charges depends on who the recipient is.
No Transfer Charges for Gifts to Family Members
As per Model Bye-law No. 38(e)(ix):
“Premium shall not be charged when the transfer is made to a member of the family.”
Family members are defined under Bye-law No. 3(xxv) as:
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Husband
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Wife
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Father
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Mother
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Sister
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Brother
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Son
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Daughter
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Son-in-law
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Daughter-in-law
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Grandchildren
Therefore:
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If a flat owner executes a gift deed in favor of any of these family members, no transfer premium is payable.
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The society cannot legally demand transfer charges in such cases.
What if the Gift is to a Non-Family Member?
If the gift deed is executed in favor of someone outside this definition of “family,” the transaction is treated like a regular transfer. In such cases:
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The society can levy a transfer premium as per the bye-laws and government regulations.
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As per government circulars, the transfer premium is capped at a maximum of Rs 25,000 in Maharashtra, unless revised subsequently.
Documentation Required for Gift Transfers
Whether the gift is to a family member or otherwise, the society will:
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Require a registered copy of the gift deed.
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Charge an administrative fee, usually Rs 500, for updating its records.
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Insist on submission of forms prescribed under the bye-laws (e.g. transfer form, application for membership, etc.)
Even if no transfer premium is payable, the administrative process must still be followed.
It’s important to note that while the transfer premium may be waived for family gifts:
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Administrative charges for processing the paperwork are still payable.
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The society may charge legal fees or documentation fees if applicable.
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Stamp duty and registration charges for executing the gift deed remain the responsibility of the parties involved.
Can the Society Refuse the Transfer?
Societies cannot refuse transfers merely because the flat is gifted, provided:
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The gift deed is legally executed and registered.
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The transferee is eligible for membership under the MCS Act and the bye-laws.
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Necessary documents and fees are submitted.
A society’s role is mainly to record the transfer, not to deny it arbitrarily.
Key Takeaways
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No transfer charges apply when a flat is gifted to close family members as defined under the bye-laws.
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If the gift is to a non-family member, the society can levy a transfer premium.
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Administrative charges and legal compliance still apply in all cases.
Therefore, if you plan to gift your flat, ensure you understand the definition of “family” in the society’s bye-laws and comply with documentation requirements to avoid disputes or delays.
