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Home / Money / Calculators /  Obtaining NOC from society not mandatory for gifting a flat

My aunt owns a flat in a registered society in Mumbai. She has all the necessary ownership documents. The building is under redevelopment. She wants to gift the flat to her real sister, who is my mother but the society is not ready to give the confirmation letter. What action can be taken against the society?

—Manish

We are assuming that the society in which the flat in question is situated is governed by the Maharashtra Co-operative Societies Act, 1960 and the Maharashtra Co-operative Societies Rules, 1961.

There is no requirement under the Act and the Rules mentioned above for a donor (the person gifting the property) to obtain a no-objection certificate (NOC) or a confirmation letter of any kind from the society to gift her flat to any person. It is to be noted that as per the recent amendments, even though it is advisable to obtain an NOC from the society, there is no longer a requirement to obtain one even for the sale of a flat.

However, since the building in question is under redevelopment, it would be advisable for your aunt to wait till the redevelopment is complete and the flat in the newly constructed building is allotted to her before she executes a gift deed. In case your aunt wishes to execute the gift deed before the construction of the new building is completed, she must check the terms of the agreement executed between her and the developer and she must comply with conditions enumerated therein. If there are no such conditions in the agreement, it would be advisable for her to obtain a confirmation from the developer by way of a separate agreement between your aunt and the developer.

It is to be noted that as per section 122 of the Transfer of Property Act, 1882, a gift is considered to be valid only when it is made voluntarily; it is without consideration, there has been an offer by the donor; and the offer has been accepted by the donee, where the donee actually accepts the gift.

As per article 34 of schedule I of the Bombay Stamp Act, 1958, stamp duty payable on a gift deed—if the gift is being made to a blood relative (including the sister of the donor)—will be 2% of the market value (ready reckoner value) of the property. A gift deed is a compulsorily registerable document under the Registration Act, 1908 and will have to be registered with the sub-registrar of assurances. The applicable registration charges will also have to be paid.

Assuming that your aunt has paid all dues owed by her to the society and the society is not willing to endorse your mother’s name on the share certificate after the gift deed has been duly executed, stamped and registered, your aunt can write to the registrar to ensure that the society carries out the requisite changes in its records to reflect the name of your mother as the owner of the flat.

Queries and views at mintmoney@livemint.com

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