Transfer Fees - Is it Justifed by Societies?

Transfer Fees - Is it Justifed by Societies?

Transfer Fees - Is it Justifed by Societies?

In the South Mumbai real estate market, despite a legal cap of Rs 25,000 on transfer fees, housing societies are reportedly charging substantial amounts ranging from Rs 10 to 30 lakh for flat transfers. A recent incident involving a businessman selling his spacious flat in a luxury tower highlights this practice, with the society demanding a share of the sale amount for transferring ownership to the new buyer. Another example cited involves a seller paying Rs 28 lakh for the transfer of a 2,850 sq ft flat. These charges, often termed as 'voluntary donations,' are calculated as a percentage of the transaction value, typically around 2%, in areas like Lower Parel, Worli, and Prabhadevi. However, in some central Mumbai locations, sellers are reportedly asked to pay Rs 1,200 per sq ft.

While legally societies are only allowed to charge up to Rs 25,000 for transfers, the practice of demanding higher amounts under the guise of donations is widespread, especially in affluent areas like Cuffe Parade, Nariman Point, and Pedder Road. Such fees, collected ostensibly for infrastructure funds, have been criticized as 'arm-twisting' to bolster society or developer reserves. Despite being common across all property segments, this practice has raised concerns about its fairness, particularly in buildings with affluent occupants and well-funded societies.

Real estate experts point out that rising maintenance costs prompt societies to levy higher transfer fees, often categorized as voluntary contributions or donations to circumvent legal restrictions. Resistance to payment can result in delayed or denied No Objection Certificates (NOCs), leading many sellers to comply to avoid transaction delays. Some parties challenge these fees post-payment, seeking refunds on excessive charges. However, societies often justify these charges as exempt from income tax under the principle of "mutuality," which courts have historically upheld.

Advocates emphasize the need for societies to refrain from excessive charging and suggest seeking funds through general body resolutions rather than imposing burdensome fees on individual transactions. Despite legal precedents and objections, these practices persist, reflecting ongoing challenges within the real estate market.
About the author
Sandeep Sadh

About Sandeep Sadh

Sandeep Sadh has been in the real estate business since 1993 in Mumbai. He has expertise in Buying, Selling, Leasing properties in Mumbai and a deep understanding of legal and tax related matters due to his experience.


Over the years, he has experienced the City's growth. He has been a columnist in the Times of India with numerous articles, which bring about a clear picture of the real estate market in Mumbai. He is a regular on NDTV, CNBC, ET Now Real Estate and Zee News, giving his experienced quotes as and when required.

Sandeep Sadh has used information and technology since the year 1998 and now what people call it Prop Tech to cater to the needs of Home Buyer, Seller, Investor and Corporates, HNI and NRI looking to Buy/Sell or Lease their properties in the Mumbai Property Market.

Sandeep has a holistic experience of real estate be it Leasing an Apartment for your CEO in the most upmarket buildings, to enter into a long lease for your office in Mumbai in prime buildings or an Investment in good projects with a detailed analysis keeping in mind the Demand and Supply and other micro factors of the project/property.

Sandeep Sadh has developed a few websites like,, which augment the real estate consulting business.

Right from Investments in Primary Markets to Selling, leasing and specializing for NRI’s all over the world. He is an expert in NRI Home Buying and Selling and has a good understanding of the Income Tax laws pertaining to Selling a Property and Repatriating funds overseas or reinvesting based on Capital Gains etc.


  • Residential Leasing
  • Commercial Leasing
  • Residential Home Buying
  • Commercial Property Buying
  • Investment Properties with complete Property Management as your Real Estate Family office

While transacting in the above segments, he has complete experience and deep understanding of the paper work, his areas of expertise are :

  1. Drafting of the Leave and License Agreements
  2. MOU for Buying/Selling Properties
  3. Drafting Agreement for Sale
  4. Gift Deeds
  5. Computing of Capital Gains with current ready reckoner values
  6. Drafting of Supporting Power of Attorney.

As an add on Service, Sandeep Sadh has tied up with various Professionals like Lawyers and Chartered Accountants who add value in transacting and specially services for Non Resident Indians.

Application to Income Tax for Lower Tax Deduction Certificate – Through a qualified CA and keeping a grip on the traction so that the remittance back to Non Resident Indians after Selling the property is seamlessly transferred.

You can connect with Sandeep Sadh on

LinkedIn -