What is a share certificate? What are the benefits of a share certificate?
When you purchase a new flat from the builder or the first purchaser/seller, you execute a registered agreement for sale. After executing the agreement, you become the owner of that flat but it is not sufficient.
After purchasing the flat, when you shift to live in the society, you see many other purchasers are there who have come to live in the newly constructed building. Then a registered entity of all these people is formed which we popularly call a cooperative housing society.
A Cooperative Housing Society is a service provider. Society does common work and maintenance works for the residents living in the society. These services include -
- Lift services
- Security services
- Water supply
- Electric supply in common areas
- Swimming pool and many other amenities.
Your society has to take care of all these amenities for the residents. If you face any problem related to water supply, leakage in pipeline, security service or any other issues, you have to report to the managing committee of the society. The managing committee of the society can only deal with a member of the society.
So, who is a member of your housing society?
A flat/ commercial shop purchaser who has his name on the society share certificate of the society is the member of the society. Therefore it is important to have a society share certificate.
After the builder completes the construction of the building and once the society is formed then this registered society gets the ownership right of the land and building only after the conveyance deed is executed in favour of the society. As a shareholder of the society you enjoy the rights over the common areas and other society services along with the right to vote in society election.
Your society issues specific number of shares in equal proportions to each of the members by way of a society share certificate and in return you get joint ownership along with other members in the society.
However many purchasers even after purchasing a flat in a housing society still they are not able to get the society share certificate.
What is the remedy for this? Legal Remedies
You have different remedies for different stages if your society does not provide you with a society share certificate.
You can make an application to the management committee of the society for getting the society share certificate. Upon receiving the application, your society will verify their records like agreements of sale submitted by the members along with membership register for official list of members and whether there is any loan mortgage on the said flat. Society may also ask you to submit an indemnity bond or affidavit in their format. After verifying all the submitted documents Society has to issue the share certificate within six months from the date of allotment of shares. After completing all this procedure still if you do not get the certificate, you have legal remedies as follows:
You can complain to the District Deputy Registrar of the local jurisdiction of your flat. After you make a formal complaint, the District Deputy Registrar issues a notice to your housing society and conducts a hearing. If the District Deputy Registrar is convinced that even after the submission of all the documents still the Society has not issued the Share Certificate to the member on time it will give necessary directions by passing a formal order to the Society for issuance of the share certificate.
It is observed in many cases that that the member who is yet to get the share certificate stops paying the maintenance fees which is not right. Paying the maintenance charges of the Society and getting the society share certificate are two different things.
If you stop paying the maintenance charges, your society can take legal action against you for recovery of maintenance charges. Society can declare you a defaulter and recover the dues amount through a recovery certificate under the applicable law. If you complain about the share certificate delay issue, your local district deputy registrar also will ask you to clear all dues first.
If you face any injustice because of the inaction of the Society then you can take legal action against the Society under the applicable law but at any point we should not stop paying the maintenance charges to the Society and cooperate with them otherwise it can be counter productive.