I had asked my housing society to issue a certificate of allotment under the seal and signature of the society in accordance with Section 154B-10-2 of MCS Act. The managing committee is of the view that it is not required and that the share certificates already issued would suffice. Is it mandatory for the society to issue the certificate of allotment irrespective of the issuance of the share certificate? VN Vijayan, Mulund
A certificate of allotment is issued to members who jointly form a society, purchase land, and undertake construction of buildings or dwelling units. It is given at an early stage of the project – before the agreement is executed and registered. Such certificate can be in respect of a plot or any dwelling unit including apartments. The society drafts the terms of allotment, including payment terms, which must be acceptable to the purchasers. In the absence of a registered document, the certificate of allotment serves to protect the interests of members who have contributed towards the land on which the proposed buildings or houses will be constructed.
A certificate of allotment is a provisional document confirming a member’s entitlement to a particular flat or plot and the shares attached to it. It reflects the initial allocation of shares and the right to occupy the unit, usually issued at the booking or early project stage. A share certificate, on the other hand, is the final and legally binding document proving ownership of shares in the cooperative society. It is issued after allotment and must be provided within six months of the share allotment.
It establishes legal membership, voting rights, access to common facilities, and forms essential proof of property ownership within the society. It must also be transferred when the flat is sold. Once a society is fully formed and functioning, issuing a certificate of allotment does not arise, because the share certificate becomes the definitive document for membership and property-related rights. If you have a share certificate it is sufficient proof of ownership. Your Society is justified in denying the issue of Certificate of Allotment.
Can a member who is a registered real estate agent become a committee member? If not, can such a person be removed if they are already serving on the managing committee? Barnali Mondal, Powai
Section 154B-23 of the MCS Act deals with disqualification of a committee and its members. It states that no person is eligible to be appointed, nominated, elected or co-opted as a committee member if they carry on the business of letting, sub-letting, or selling flats in the housing society of which they are a member.
While the clause appears to impose a blanket disqualification on anyone engaged in such business, it is important to note the second part of the clause: “Letting, sub-letting or selling flats in the housing society of which they are a member”.
A person becomes ineligible if he provides professional services to members of his own society. Bye-law 116 also prohibits any society officer from having a direct or indirect interest in contracts, property transactions or dealings involving the society. If a person is contesting or serving on the managing committee, it is advisable for the committee to obtain a declaration from such member confirming that he will not engage in the business of letting, sub-letting, or selling flats of members within his own society.
If a member provides such services in his society, he ceases to be a committee member. The managing committee, either suo motu or on receiving information, must notify the member of the disqualification and can remove him after giving an opportunity to present his case. If, after considering his explanation, the committee concludes that the disqualification continues, it should remove him from the committee and inform the DDR.
The questions are answered by Sharmila Ranade, a legal expert associated with Mumbai Grahak Panchayat. The questions, in brief, may be sent to fpjchs@gmail.com
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