What is share certificate (housing society)?
Also called: society share certificate, housing society share certificate
In a cooperative housing society, the share certificate shows you're a member holding shares in the society that owns the building and land. For many older flats in Mumbai and Pune it's a key ownership paper alongside the registered agreement.
Cooperative housing societies are registered under state cooperative laws, most prominently the Maharashtra Co-operative Societies Act, 1960, with similar laws in Gujarat, Karnataka, Delhi and elsewhere. Once it has conveyance, the society owns the land and building. Members hold shares, commonly ten shares of ₹50 each, and the certificate records the member's name, the certificate number, the distinctive share numbers and the flat they relate to. It's signed by the chairman, secretary and one committee member and carries the society's seal.
When a Mumbai flat is sold, the registered agreement transfers the flat, but the buyer becomes a member only when the society transfers the shares. Under the model bye-laws, that means an application with a copy of the agreement, the seller's resignation, a ₹500 transfer fee and any transfer premium, which the state has capped at ₹25,000. The secretary then endorses the transfer on the back of the certificate.
Lenders treat the share certificate as part of the security for a home loan and keep the original, while the society records the bank's lien. Lose the certificate and getting a duplicate is slow: a police complaint, a newspaper notice, an indemnity bond and a committee resolution.
Nominations filed with the society cause endless family disputes. The society can transfer shares to the nominee on a member's death, but courts have consistently held that a nominee holds them for the legal heirs; the will or succession law decides who ultimately owns the flat.
When a Chembur flat changes hands for ₹1.6 crore, the buyer registers the agreement, pays the society's ₹500 transfer fee and a premium within the ₹25,000 cap, and gets the certificate endorsed in his name after the managing committee approves the transfer.
Buying into a society that still hasn't received conveyance from the builder. The share certificate then represents membership of a body that doesn't own its own land.
Questions people ask about share certificate (housing society)
Is a share certificate proof of ownership of a flat?
It proves membership and your right to the flat through the society. Banks and buyers read it together with the registered agreement or conveyance in your name.
What if the society delays transferring the shares?
Under Maharashtra's model bye-laws, the committee has to decide a complete transfer application within three months, failing which the transfer is treated as approved. A member can also complain to the Deputy Registrar of Cooperative Societies.