Rajesh 05 September 2020

Society formation cost

Respected Lawyers,

I bought a flat. The project was redevelopment of a society. So the old society with existing members before redevelopment as an entity exists even though a new structure is built. I will be induced as a new member now.

Builder said right at the time of giving cost estimates that I will have to pay sum of flat area x 90 to the society towards membership / formation or something like that.

Is this normal as a standard procedure w.r.t. real estate/bye laws or whatever applicable? I will be issuing a cheque in favour of the society, so it's essentially getting recorded as a bank transaction.

Thanks and kind regards.

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5 Replies

Dr J C Vashista (Advocate) 05 September 2020

Consult a local prudent lawyer with relevant documents and Bye-Laws of the Society (if it is a cooperative society).

1 Like

Shrikant Bagade 05 September 2020

If you are admitted as member of the old society, the membership charges should be as per by-laws of the society.
If you have purchased the flat in Sale component of the project which is separate(though adjoining) from the Old Society Bldg, the Developer can charge you the sum, which should be reasonable (legally) for society formation.
For any further assistance do let me know.
Regards,
Adv. Shrikant Bagade

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G.L.N. Prasad (Retired employee.) 05 September 2020

The charges may differ from society to society slightly depending on the present infrastructure, number of plots, open area, operation of lifts, number of lights etc. Contact some other societies near your building to find out the amount for forming a general idea. This amount is not an expenditure and coming to society and and has to be spent as per the committee's decision prudently and there are checks and monitoring. The issue of such admission amount may be discussed in the first meeting itself.

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P. Venu (Advocate) 05 September 2020

Have you inquired with the existing society or its members?

Kishor Mehta (CEO) 05 September 2020

When a society building is redeveloped and more flats are added in the new construction, a new society has to be formed as the basic format of the society has changed and new members, who have purchased newly erected flats, are to be added. The name of the society may remain the same but the society has to be freshly registered. Under the circumstances the new members have to pay their share of the fresh fees for the society registration charges.