Many Ahmedabad Housing Societies Exceed Transfer Fee Cap, Fuelling Legal Disputes

Many housing societies in Ahmedabad are charging buyers far more than the law allows, despite clear directives and legal provisions from the state government. The levies are imposed under various labels, including transfer fees, development fees and lifetime maintenance charges. Disputes over them are now moving through several forums, from the District Cooperative Registrar to the Board of Nominees courts and the Gujarat High Court.

What the Law Says on Transfer Fees

The state government amended the cooperative society laws to cap the transfer fee that cooperative and housing cooperative societies can charge new buyers. The limit is 0.5% of the property’s sale price or ₹1 lakh, whichever is lower.

However, the rule is not being effectively enforced on the ground, and the number of disputes is rising.

Manekbaug Case Reaches the High Court

One of the most contentious cases involves the Manekbaug Cooperative Housing Society Limited in Ambawadi, an upscale area of Ahmedabad. The society decided to charge new members ₹20 lakh as a “development fee”.

The matter is now before the Gujarat High Court. The court has issued an interim stay on an order by the Registrar of Housing Societies to appoint an auditor, who was to verify the society’s documents and carry out a spot inspection. Further hearings are scheduled for next month.

The legal battle began with a dispute among a former owner of a property in the society, the new buyer, and the society itself. It concerns the alleged illegal collection of about ₹20 lakh as a “development fee”.

Officials Say Societies Cannot Exceed the Cap

Arbitrary transfer and development fees have become a serious concern. Officials of the District Cooperative Registrar and the Cooperation Department say a housing society may charge a transfer fee of only 0.5% of the property’s sale value or ₹1 lakh, whichever is lower. They add that societies have no authority to collect anything above that limit.

Members Allege Harassment

Members who have clashed with society office-bearers say those who refuse to pay the high amounts demanded are denied membership. They also claim they face harassment in other ways, including being deprived of amenities.

In this situation, there are growing demands for the authorities to take strict action against such societies so that a precedent is set.