A housing society is an association of individuals which is formed when people come together with a consensus to reside together. It leads to the formation of a neighbourhood with discipline which is often absent in independent residencies. In a housing society, the title of the land and building is conveyed to the society, which is then considered to be the owner. People who buy flats automatically become a member of the society. Further, the housing society comprises a managing committee which consists of the residents in order to manage the affairs of the society.
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How do I get a NOC from the housing society?
A no-objection certificate (NOC) from the housing society is not a mandate when purchasing a flat. The role of society is to simply register the transfer of the property from the seller to the buyer. The right to buy or sell a property is a right that has been mentioned under the Transfer of Property Act, 1882. The person who owns the property has the right to sell the property to anyone.
If the property is being purchased through an original home loan savings belonging to the registered housing society, then there is a mandate to obtain a NOC from the society.
- Before applying for the NOC, the person has to ensure that there are no pending dues that are to be paid to the society.
- The format in which the NOC has to be obtained from the society is usually given by the lender.
- Apply for the NOC in the prescribed manner and pay the required charges according to the bylaws of the society.
- The person should check the bylaws of the society to verify the need of the NOC. If the bylaws have no specific mention with respect to the need for a NOC then there is no requirement to obtain a NOC.
- If no objections have been raised by the society and the NOC has not yet been obtained after the submission of the application, then after a period of 30 days, it is be deemed that a NOC has been granted.
Can the builder deny NOC a resale deal?
The No Objection Certificate (NOC) from the builder is required for the following purposes: –
- to ascertain whether the original buyer has paid the entire sale consideration for flat/apartment;
- to ascertain whether the original buyer has cleared all his/her dues to the builder including, but not limited to maintenance.
It is not compulsory to get NOC from the builder unless the buyer or bank asks for it. The buyer can satisfy himself with the last bills and all requisite payment receipts apart from the seller’s indemnity given in the sale agreement. In majority of cases, the landowner grants the power of attorney to the developer to act on its behalf. At the time of the formation of the society, the land is conveyed from the landowner in favor of the registered society and hence, the NOC of the builder/landowner, as the case may be is necessary.
As per the MOFA (Maharashtra Ownership of Flats Act) model agreement, the developer is required to form the society within 4 months of completion of construction, therefore as per the model agreement he is bound to give NOC. If he refuses to do so, a person may proceed against him either through a civil suit or a consumer complaint. Thus, is not a mandate to obtain a NOC from the builder in case of a resale deal.
Is NOC required for a sale or resale of a flat?
NOC is not a mandatory document that is required for the sale or resale of a flat. There is a list of documents that are required for selling a flat and it is not mandatory that a NOC has to be obtained from the society for selling a flat.
The model bye-laws that have been framed under the Maharashtra Cooperative Societies Act states that a person doesn’t need to obtain a NOC from the society at the time of transferring a flat to another person. If the transferor or the transferee of the flat wants to obtain a NOC from the society for personal reasons, the same can be obtained.
For this, the transferee will have to write an application to the society and after scrutinizing the application, the society will issue a NOC within a time period of a month. It is important to understand that the issuance of a NOC by the society does not absolve the transferor from paying all the necessary dues that are to be paid before the flat is sold/transferred to another person.
How to check the legality of NOC from the builder in case the society has not yet been formed?
If the society has not yet been formed, a prospective buyer will require a builder’s NOC to submit for the purposes of bank loan approval/disbursement. If the society has been formed, then a NOC from the society is sufficient. A person can go ahead without the NOC from the Builder and register the society. However, he will have to intimate the builder via a letter and give him a specified time period to form the society. If he fails to respond, then a Deemed Society can be formed.
A builder NOC is an important document that is required for the direct transfer of under-construction property. Further, it is important to check the authenticity of a NOC. An easy method is to check the paper on which the NOC has been granted. The NOC must be granted on an official document and must contain the letterhead of the builder. A NOC should not be granted on a simple and plain piece of paper.
While obtaining a NOC, it is important to ensure that the NOC has been signed by an authorized person. If it is not so, it document is not valid and has no legal standing. Also, it is necessary to validate the recency of the NOC. It should be a recent document which has been executed by the builder.
For under mortgage resale property, is the builder NOC to be obtained before or after the agreement to sell?
It is important to ask for a NOC from the builder so as to make sure that there are no dues on the society or flats sold by him. The same can be sought by the society body before taking over charge from the builder. One cannot say that they did not know that the builder has taken a loan on their property. It is the responsibility of a buyer to investigate and check whether the property is free of all legal defects or not.
Further, a potential buyer can serve a notice to the builder asking him to clear the bank’s dues. In addition to this, a police complaint under Section 420 of the Indian Penal Code (IPC) can also be filed. The buyer can also seek recovery of the amount paid to the builder by declaring that the sale deed signed was illegal.
Thus, one must not be in a hurry in signing any of the documents with the builder and carefully go through the deed to make sure that all requirements are complied with. The buyer must understand the sale deed and all the clauses mentioned therein A buyer must check whether the sale deed has all the details with respect to the mortgage. The document must make a detailed note of how the loan is to be settled.
If such details are missing then it is necessary to include them in the sale deed. The seller can use the sale proceeds to repay the loan and the bank can release the property’s original papers. In fact, the homebuyer can also take over the loan. Since a home loan is not transferable, therefore, the homebuyer will have to submit his income and KYC documents. Making a full payment to the builder is not the only responsibility a homebuyer has; he must also check all the documents carefully and make sure they are not legally defective.
A housing society provides various benefits to its members such as better management, security, and facilities, etc., to name a few. Since a housing society consists of people of different cultures living together, it leads to the development of respect and value for residing cultures. Since all the members of society are prompt to act, it leads to better management of society.