Members of cooperative housing societies often face resistance from the managing committee when they try to rent out their flats, especially if there are pending or disputed dues. However, the law provides clear protection to members in such situations.
Society Cannot Prevent Renting Due to Disputed Dues
The managing committee cannot threaten or prevent a member from renting out the flat simply because there are dues in dispute. A society does not have the legal authority to restrict the occupancy rights of tenants or licensees on such grounds.
Understanding Section 154B-7 of the MCS Act
Section 154B-7 of the Maharashtra Cooperative Societies (MCS) Act places restrictions on:
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Transfer of shares
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Transfer of interest in the society
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Transfer of occupancy rights
This restriction applies only to the member’s ownership rights when society dues are unpaid.
However, the law clearly distinguishes between:
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Transfer of ownership or shares, and
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Granting occupancy to a tenant or licensee
The section specifically clarifies that occupancy rights of a tenant or licensee are not included in these restrictions. Therefore, the society cannot stop you from renting your flat.
No Permission Required from Society
Under the model bye-laws, a member does not need prior permission from the society to give the flat on a leave and licence basis.
Instead, the member must:
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Intimate the society at least eight days in advance
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Submit a copy of the leave and licence agreement
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Provide a copy of the police verification or intimation
Once these formalities are completed, the society cannot legally refuse occupancy to the tenant.
What If the Managing Committee Threatens You?
If the managing committee:
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Threatens you,
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Refuses entry to the tenant, or
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Creates obstruction,
You may take the following steps:
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Continue with the rental process as per the bye-laws.
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Keep written records of all communications.
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File a police complaint for harassment or intimidation, if required.
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Pursue your complaint with the Deputy Registrar, who will examine the disputed dues.
The registrar has the authority to decide the dispute and pass appropriate orders.
Key Legal Position
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Society cannot stop renting due to disputed dues.
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Section 154B-7 applies to transfer of ownership, not tenancy.
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No prior permission is required for leave and licence.
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Only intimation and document submission are required.
Members have the legal right to rent out their flats even if dues are under dispute. The managing committee cannot impose illegal restrictions or threaten the member. As long as the bye-law formalities are followed, the tenant’s occupancy cannot be denied. The dispute regarding dues will be decided separately by the competent authority.
