Bye-Law 173
Bye-Law 173 governs the Transfer Fee that a housing co-operative society may charge when a flat changes ownership, setting the maximum permissible fee and the procedure for approving transfers.
What is Bye-Law 173?
When a flat is sold or transferred in a Maharashtra co-operative housing society, the society collects a Transfer Fee to process the membership transfer. Bye-Law 173 caps this fee.
As per current Model Bye-Laws, the maximum Transfer Fee is ₹25,000 for flats with carpet area up to 500 sq ft and ₹50,000 for larger flats. Societies cannot charge more without violating bye-laws.
Why it matters
Transfer Fee is a significant income item for societies and a major cost for buyers. Overcharging is a common complaint that leads to disputes before the Registrar's office.
Proper accounting of Transfer Fee income is required — it must not be confused with Sinking Fund or Repair Fund contributions. Auditors check this distinction.
Legal & regulatory context
Bye-Law 173 is among the most frequently contested provisions. The Supreme Court and Bombay High Court have ruled that societies cannot charge more than the prescribed maximum, even by General Body resolution.
The Transfer Fee goes to the society's corpus — not to the outgoing or incoming member. Societies sometimes try to add premium charges disguised as 'society charges', which is illegal.
How SocietyBee handles it
SocietyBee has a dedicated Transfer Fee ledger head and a Transfer Management workflow that creates the invoice, tracks payment, and auto-generates the membership transfer entry when payment is confirmed.
Try SocietyBee free →Frequently asked questions
Can a society charge more than ₹25,000 or ₹50,000 as Transfer Fee?
No. The Bombay High Court has repeatedly held that societies cannot charge beyond the Bye-Law 173 maximum, even by passing a General Body resolution.
Is Transfer Fee refundable if the sale falls through?
Typically yes, if the transfer was not processed. The society should refund the fee minus any actual administrative costs incurred.