Professional practise

1. PROFESSIONAL PRACTICE
12. Describe the need for legislation related to Sale of Ownership Flats and the
procedure required to be followed for formation of Cooperative Society for the said
block of flats.
Need for legislation related to sale of ownership of flats
 During the times preceding 1961, there were found to exist in several areas in
the State, sundry abuses, malpractices and difficulties relating to the
promotion of the construction and the sale and management and transfer of
flats taken on ownership basis and that such abuses, malpractices and
difficulties were increasing.
 To protect the interests of the buyers and save them from any undue
exploitation a legislation was needed.
 In 1963 the above Act was therefore passed for the regulation of basis in the
State of Maharashtra. By virtue of the provisions of the Act and the
Notifications issued this Act is made applicable to the Areas within State of
Maharashtra.
 The Maharashtra Ownership Flats (Regulation of the Promotion, Construction,
Sale, Management and Transfer) Act, 1963 (“the MOFA”) has been enacted
to regulate the promotion, construction, sale, management and transfer of
flats sold on an ownership basis within the State of Maharashtra. The MOFA
is an important piece of legislation as it lays down the responsibilities of real
estate developers / builders in respect to flats sold by them and conversely
the rights of flat purchasers within the State.
Procedure to be followed for the registration of a cooperative society
A society, which has as its objects the promotion of the economic interests or
general welfare of its members, or of the public, in accordance with co-operative
principles, or a society established with the object of facilitating the operations of any
such society, may be registered under this Act: Provided that, no society shall be
registered if it is likely to be economically unsound, or the registration of which may
have an adverse effect on development of the co-operative movement, or the
registration of which may be contrary to the policy directives which the State
Government may, from time to time, issue.
A society may be registered with limited or unlimited liability.
(1) No society, other than a federal society, shall be registered under this Conditions
Act, unless it consists of at least ten persons or such higher number of persons as
the Registrar may having regard to the objects and economic liability of a society and
development of the co-operative movement, determine from time to time for a class
of societies, (each of such persons being a member of a different family), who are
qualified to be members under this Act, and who reside in the area of operation of

2. the society : Provided that, a lift irrigation society consisting of less than ten but of
five or more such persons may be registered under this Act.
(2) No society with unlimited liability shall be registered, unless all persons forming
the society reside in the same town or village, or in the same group of villages.
Notwithstanding anything contained in this Act, the State Government may by
general or special order, exempt any society or class of societies from any
requirements of this Act as to registration, subject to such conditions (if any) as it
may impose.
For the purposes of registration, an application shall be made to the Registrar in the
prescribed form, and shall be accompanied by four copies of the proposed by-laws
of the society and such registration fee as may, be prescribed in this behalf. Different
registration fees may be prescribed for different classes of societies, regard being
had to the service involved in processing an application for registration. The person
by whom, or on whose behalf, such application is made, should furnish such
information in regard to the society, as the Registrar may require.
(2) The application shall be signed.—
(a) in the case of a society other than a federal society, by at least ten persons (each
of such persons being a member of a different family), who are qualified under this
Act, and
(b) in the case of a federal society, by at least five societies. No signature to an
application on behalf of a society shall be valid, unless the person signing is a
member of the committee of such a society, and is authorised by the committee; by
resolution to sign on its behalf the application for registration of the society and its
by-laws; and a copy of such resolution is appended to the application.
1) if the Registrar is satisfied that a proposed society has complied with the
provisions of this Act and the rules, [or any other law for the time being in force, or
policy directive's issued by the State Government under section 4,] and that its
proposed by-laws are not contrary to this Act or to the rules, he [shall, within two
months], from the date of receipt of the application register the society and its by-
laws.
(2) Where there is a failure on the part of the Registrar to dispose of such application
within the period aforesaid, the Registrar shall, within a period of fifteen days from
the date of expiration of that period refer the application to the next higher officer and
where the Registrar himself is the registering officer, to the State Government, who
or which, as the case may be, shall dispose of the application within two months
from the date of its receipt and on the failure of such higher officer or the State
Government, as the case may be, to dispose of the application within that period, the

3. society and its bye-laws shall be deemed to have been registered and thereafter the
Registrar shall issue a certificate of registration under his seal and signature within a
period of fifteen days].
(3) Where the Registrar refuses to register a proposed society, he shall forthwith
communicate his decision, with the reasons therefore, to the person making the
application and if there be more than one to the person who has signed first thereon.
(4) The Registrar shall maintain a register of all societies registered, or deemed to be
registered, under this Act.
A certificate of registration signed by the Registrar, shall be conclusive evidence that
the society therein mentioned, is duly registered, unless it is proved that the
registration of the society has been cancelled
13. Describe the effect of legislation related to Sale of Ownership Flats and the
procedure required to be followed for assessment of rights of individual flat owners in
terms of future use of TDR, Fungible FSI, etc. in a Cooperative Society for the said
block of flats.
The Maharashtra Ownership Flats (Regulations of the Promotion of Construction,
Sale, Management and Transfer) Act, 1963 (MOFA), which regulates promotion of
the construction, sale, management and transfer of flats taken on ownership basis in
the State of Maharashtra, obligates the promoter to constitute a Co-operative Society
or a company as soon as minimum prescribed number of flats are taken by the
purchasers and to convey the title over the land and building to such Society/
Company. This is to ensure common management and collective ownership of land
and property. The rights of individual flat purchaser vis-a-vis the Society/Company
and inter se are governed by the Maharashtra Co-operative Societies Act in the case
of constitution of Society and, by the Companies Act, in case a company is formed.
A common feature, however, is that while the legal ownership of land and building
vests in the entity so constituted, the right of enjoyment by way of the right of
occupation remains with the member/share holder which right itself is a transferable
right.
2.1 MOFA also provides for an alternative to the constitution of Co-operative
Society/Company by permitting the flat purchasers to submit their respective
apartments to the provisions of Maharashtra Apartment Ownership Act, 1970
(MAOA) and form a condominium by making a declaration u/s. 2 and executing
Deeds of Apartment as per Sec. 5(2) of that Act. In case a condominium is formed
each apartment owner remains entitled to the exclusive ownership and possession
of his apartment in accordance with the declaration and the whole property is
deemed to be owned in common by the apartment owners. They have undivided

4. interest in the common areas and facilities. The condominium is responsible for the
management of property and common areas and facilities.
U/s. 4 of the MOFA, before accepting any payment as advance payment or deposit
from a flat purchaser, the Promoter has a liability to execute a written agreement in
the prescribed format with every flat purchaser and to get this agreement registered
under the Registration Act. Further, the amount of deposit or advance cannot exceed
20% of the sale price.
Development in Mumbai is governed by the Development Control Regulations for
Greater Mumbai, 1991 & amended from time to time.
Vide Notification No. CMS 4311/452/CR-58/2011/UD-11 dated 6th January 2012 the
Urban Development Department, Government of Maharashtra has modified the said
Development Control Regulations. According to the modifications, sub regulations
(3) & (4) are added to Regulation 35 wherein; list of users permitted free of F.S.I.
with the special permission of Commissioner, Fungible compensatory F.S.I. over &
above admissible F.S.I. may be permitted. Followed by the said modifications,
Municipal Corporation of Greater Mumbai issued circular No. CHE/22276/DP/Gen
dated 12.01.2012 wherein; the details of quantum of permissible fungible F.S.I.
according to the user are quantified as under.
Residential user : 35%
Non residential user including commercial & industrial user : 20%
The said fungible F.S.I. over & above admissible F.S.I. shall be allowed by charging
premium at the rate of 60%, 80% & 100% of Stamp Duty Ready Reckoner Rates for
residential, commercial & industrial user respectively.
The fungible F.S.I. is interchangeable & usable as a regular F.S.I. It is not necessary
that same shall be used only for flower beds, balconies, voids, elevation features etc.
It can be used for these purposes and /or for enlarging the room sizes, or / and for
additional rooms and / or for more dwelling units.