Also known as Transfer premium
When a flat in a co-operative society is sold, the buyer applies for membership and the share certificate is transferred. Societies charge a transfer fee or premium for this, typically paid by the seller, and an entrance fee for the new member. State co-operative laws and government orders limit how much a society can charge, and some societies have been penalised for demanding more.
Transfers within the family, such as to a spouse or legal heir, are often charged less or nothing, depending on the bye-laws.
Brokers should confirm the society’s figure early and agree in the term sheet who bears it, because surprise society charges are a common last-minute dispute.
Example
A seller in Andheri sells a 600 sq ft flat for ₹1.35 crore. The society asks for its transfer fee and the buyer’s entrance fee before transferring the share certificate. The broker had written in the term sheet that the seller pays the transfer fee and the buyer pays the entrance fee, so the handover goes through without argument.
Figures are illustrative, not market rates.
Questions about Transfer fee
Who pays the society transfer fee?
By custom the seller pays the transfer fee and the buyer pays the entrance fee, but the parties can agree otherwise. Put it in the term sheet or agreement so there is no dispute at the society.
Can a society charge any transfer fee it wants?
No. State co-operative laws, government orders and the registered bye-laws limit the amount. A member who is charged more can complain to the registrar of co-operative societies.
Sources
Reviewed