Buying a resale flat in a Mumbai housing society: NOC, the seller's dues and the share certificate

Rules and rates as of 17 October 2026.

Why the society is part of your purchase

When you buy a resale flat in a Mumbai co-operative housing society, you are buying two things. One is the flat itself, under a registered agreement. The other is the seller's shares and membership in the society, which carry the right to occupy the flat. The second part runs on the Maharashtra Co-operative Societies Act, 1960, its rules and the society's bye-laws, and it is where many resale deals get stuck after the money has been paid.

Three pieces of paper matter: whether you need the society's no-objection certificate (NOC), what the seller owes the society, and the share certificate. This guide takes them in turn.

Do you need a society NOC to buy?

Under the state's model bye-laws for housing societies, no. Bye-law 38(d) of the model bye-laws published by the Commissioner for Co-operation says the society's NOC is not required for a transfer. If the seller or buyer asks for one anyway, the committee must consider it on merit within one month, and bye-law 65(i) says the society shall issue any NOC within one month of the member's application, failing which the Registrar can decide.

In practice you may still need a letter from the society, because your lender may want one before it disburses a loan. Bye-law 38(e)(x) recognises this: a NOC required by another law or by a financing agency is one of the documents for the transfer. So ask your lender early what it needs from the society, and ask the seller to apply for it in writing.

One caution: the copy of the model bye-laws we could read on the Commissioner's site is marked "(proposed)". Your society is bound by the bye-laws it has actually adopted. Ask the secretary for a copy.

The seller's dues follow the flat

This is the part that costs buyers money. Section 154B-7 of the Act, added in 2019 for housing societies, says no transfer of a member's share, interest or occupancy right is effective unless (a) the society's dues are paid and (b) the transferee applies for and gets membership. Section 154B-14 gives the society a charge on the share and interest of a member, past member or deceased member for what is owed.

The Bombay High Court applied both in Monarch Orchid Co-operative Housing Ltd. v. State of Maharashtra (Writ Petition 8034 of 2025, decided 14 July 2026). The buyers had bought the flat at an auction. The court held that the earlier owner's maintenance liability passed to them with the flat, that the society could refuse membership until the dues were paid, and that it could pursue recovery at the same time. It directed the society to admit them only if they paid the principal arrears within six weeks.

The same court had earlier gone the other way on different facts. In Brightland Co-operative Housing Society Ltd. v. Divisional Joint Registrar (Writ Petition 3466 of 2025, 31 July 2025), the society never decided the membership application within three months, and the dues were not settled or crystallised. The court upheld deemed membership under section 22(2) and said the society could recover its money from the earlier owners. It also said, in terms, that dues must be paid before admission as a rule. The 2026 judgment reconciles the two: where dues are undisputed, the society can insist on payment first; where they are genuinely disputed, the authorities decide.

The lesson for a buyer is simple: get the number in writing before you pay the balance.

How much interest on arrears?

Here two official texts differ. The proposed model bye-law 73 allows simple interest of up to 21% a year on overdue charges. The Maharashtra Co-operative Societies (Amendment) Rules, 2026, dated 18 June 2026 and published in the Gazette on 22 June 2026, say in rule 106C-12 that interest on overdue charges is at the rate the general body fixes, and not more than 12% a year simple. The Rules are the later and statutory text, but check what your society's general body has resolved; a lawyer can tell you which governs a dispute.

A worked example

Say the seller's maintenance is ₹6,500 a month and the last 10 bills are unpaid. Each bill attracts simple interest from its due date until you settle. Count the months each bill is overdue at settlement: 9 + 8 + … + 1 + 0 = 45 bill-months.

Interest = monthly bill × annual rate × total months overdue ÷ 12.

• At 12%: ₹6,500 × 0.12 × 45 ÷ 12 = ₹2,925.
• At 21%: ₹6,500 × 0.21 × 45 ÷ 12 = ₹5,118.75, about ₹5,119.

Item	Interest at 12% (2026 Rules cap)	Interest at 21% (proposed bye-law 73)
Unpaid bills (10 × ₹6,500)	₹65,000	₹65,000
Simple interest	₹2,925	₹5,119
Total dues	₹67,925	₹70,119
Transfer fee + entrance fee (bye-law 38(e))	₹500 + ₹100	₹500 + ₹100

The figures are illustrative. Add any transfer premium your society charges; bye-law 38(e)(ix) says the general body fixes it within the limit in the government's circular, and it cannot be charged on a transfer to a family member, nominee or heir. Ask for the society's figure in writing.

The usual way to protect yourself is for the agreement to say the seller clears all dues before registration, or that you pay that amount directly to the society out of the price.

The share certificate

The share certificate is the seller's proof of membership. Under the model bye-laws it is issued under the society's seal and signed by the chairman, the secretary and one committee member authorised by the committee (bye-law 10). Before you pay:

• See the original. The seller has to submit it with the transfer application (bye-law 38(e)). If the seller's bank holds it as security for a loan, ask in writing how and when it will be released.
• Match the names on the certificate with the sellers in your agreement. If there are joint holders, make sure all of them are parties to the sale.
• If it is lost, the society can issue a duplicate on a police complaint and an affidavit (bye-law 9B). Get the duplicate before closing, not after.
• Ask the society in writing how and when it will record the transfer in your name.

Membership: the three-month clock

The transfer application goes with the seller's resignation, your membership application, the stamp-duty-paid agreement, the seller's undertaking to clear liabilities, and the fees (bye-law 38(e)). Section 22(2) of the Act requires the society to decide a membership application within three months; if it does not, the applicant is deemed admitted. Bye-law 39(c) says the same. A refused applicant can appeal to the Registrar under section 23(2). As the two judgments above show, deemed membership will not necessarily help if undisputed dues are unpaid.

A short checklist

1. Ask your lender what it needs from the society.
2. Get the society's written statement of dues, including interest and premium.
3. Inspect the original share certificate and match the names.
4. Write the dues settlement into the agreement for sale.
5. File the transfer and membership papers right after registration, and note the date.

For anything disputed, a lawyer who handles society matters is the right person to ask.