Transfer Fee
Transfer Fee is the one-time charge a housing co-operative society collects when a flat is transferred from one member to another, to cover administrative costs of updating membership records.
What is Transfer Fee?
Transfer Fee covers the society's administrative cost of processing a membership transfer — verifying no dues, updating share certificate, changing ledger entry, and filing with the Registrar. It is paid by the incoming member (buyer) typically.
Under Bye-Law 173, the maximum Transfer Fee is ₹25,000 for flats up to 500 sq ft carpet area and ₹50,000 for larger flats.
Why it matters
Societies sometimes charge excessive Transfer Fees — ₹1–2 lakh in Mumbai — disguised as 'development charges' or 'corpus fund'. Courts have repeatedly struck these down as illegal.
Properly accounting for Transfer Fee income is important — it is a capital receipt, not maintenance income, and must appear in the Balance Sheet, not the Income & Expenditure Account.
Legal & regulatory context
Bye-Law 173 is the governing provision. The Bombay High Court has ruled that no additional charges beyond the statutory Transfer Fee can be imposed by the society, regardless of General Body resolution.
The Registrar's office has issued circulars directing societies to refund amounts collected in excess of the bye-law maximum.
How SocietyBee handles it
SocietyBee has a Transfer Fee ledger head under capital receipts. The system generates a Transfer Fee receipt, updates the member roll, and flags if the entered amount exceeds the Bye-Law 173 limit.
Try SocietyBee free →Frequently asked questions
Is Transfer Fee income or capital for a society?
It is a capital receipt. It should appear in the society's Balance Sheet under a separate head, not in the Income & Expenditure Account.
Can the buyer and seller agree to split the Transfer Fee?
Yes, privately. But the society collects it as one payment and does not concern itself with the buyer-seller arrangement.