Can Condominium Apartment be Converted to Society?

The procedure to convert condominium to society in Maharashtra requires only 51% approval from apartment owners. This significant change was introduced by the 2018 amendment to the Maharashtra Apartment Ownership Act, 1970. It simplified the process for condominium residents wishing to move toward cooperative housing society structures.

The legal situation is crucial to this process. A conveyance deed must be executed, registered with the Sub-Registrar of Assurances, and payment of applicable stamp duty needs to take place. The provisional committee should manage the transfer of dues of the apartment condominium to the cooperative society. This committee is formed through formal elections at a general body meeting. Notably, the builder’s consent is not mandatory. As few as seven members can begin the process to form a cooperative society by withdrawing from the existing association.

Why Apartment Owners Consider Converting to a Society

Apartment owners face several issues in the condominium model that motivate them to convert. Builder control, especially in condominiums, creates relationships with friction.

Key Benefits	Condominium Model	Society Model
Control over Future FSI	Builders maintain ownership over any additional FSI sanctioned by the government.	All the members of the society/association collectively own the FSI that exceeds the original rights to FSI.
Ownership of Common Areas	Builders hold every right unless otherwise agreed for open space, terrace area, and parking areas.	The members of the society/association will own all common areas with ownership vested after the conversion.
Dispute Resolution	Issues are lawfully dealt with by the Civil Courts which can take years.	Disputes are lawfully dealt with in the Co-operative Courts which provide quicker resolutions.
Building Redevelopment	All owners need to be at 100% agreement—creates delays.	Building redevelopment only requires 51% member sign off, allowing for a quicker redevelopment option and a stronger negotiating advantage
Financial Management & Transparency	Often no clear governance or rules for financial management	Regulated by positive rules; limits misuse; provides better living circumstances.
Property Taxes	In many cases property tax obligations are greater.	Property taxes can be lowered in excess of 40%.
Liquidity & Financeability	Difficult to finance or transact on an individual’s unit cleanly.	Easier to finance and transact on an individual’s unit in a registered society.

Legal and Procedural aspects of conversion

Conversion of the condominium to society, formally, starts with a general body meeting where 51% of owners must approve the conversion to society by a resolution.

Then a provisional/ad-hoc committee has to be formed. This committee will be responsible for transferring the dues of the apartment condominium to cooperative society, communicating with the builder and drafting all required documents for Society registration, including:

• Deed of declaration (usually prepared by the builder)
• Application to Assistant Registrar of Cooperative Societies
• Consent letters from at least 51% of owners
• Details of provisional committee’s bank account
• Draft of Society’s by-laws for approval

Once documents are prepared, we need to dissolve the condominium arrangement before the new Society can register. To dissolve the condominium arrangement, the committee must file a ‘declaration suit’ in a Civil Court and get a Decree for withdrawal from the Apartment Act, thus facilitating the registration of the Society under Maharashtra Cooperative Societies Act. 

A minimum of 10 members from different families are needed for registration. Small groups of 10 members or less must obtain permission from the Competent Authority. The fee for registration is ₹2500 and paid to the Government Treasury.

An important step is to assign common area ownership. Since the shares of land are undivided in the case of a condominium, the group will have to transfer the ownership to the rights of the society. The stamp duty is based on the Ready Reckoner’s estimate of market value.

Apartment owners can start the process without builder cooperation. A notice must be served to the builder and also sent to the Deputy Registrar (copy) asking him to intervene legally.

Obstacles and Solutions in the Conversion Process

Even after the 2018 amendment to the law, there will still be obstacles in the procedure for converting from condominium to society. Here are some key obstacles and their respective solutions:

Builder Non-Compliance

Often, developers do not co-operate and there are various reasons they may not comply, but mainly if they have signed the deed of declaration under the Apartment Act. So, what can owners do?

• Give the builder a legal notice
• Notify the Deputy/Assistant Registrar
• Submit Form 6 (Rule 12) to the authorized officer

In the case of the builder not complying, owners can take legal steps to complete the process on their own

Legal Documentation Delays

• Some apartments may have registered deeds from the old legal structure. The process usually involves cancelling these documents and starting legal paperwork all over again. This could raise stamp duty questions. The good news is that recently the Bombay High Court has ruled that a 10% penalty only applies to transactions that shall be completed prior to December 2018, for deficient stamp duty. 

Managing Day to Day Operations

While the society is being registered, the provisional committee must manage the apartment condominium to cooperative society account. The new provisional committee must:

• – Collect maintenance charges
• – Keep common facilities kept up
• – Keep the books open
• – Maintain any and all participants documentation required.

Dispute Resolution Mechanisms

For internal disputes:

• Maintain thorough documentation
• Use arbitration over litigation
• Regularly review bylaws
• Approach the Registrar of Cooperative Societies only as a last resort

With just 51% owner approval, the majority rule empowers determined residents to succeed.

Conclusion 

Although there are complications with the condominium to society conversion process in Maharashtra it provides many ongoing benefits. The 2018 change in the law also simplified the process as  with the decrease in unanimity to only 51% of consent.

Key benefits:

• Collective FSI and ownership of common areas.
• Redevelopment becomes easy, or negotiating with builders.
• Potentially lower property taxes (up to 40%).
• Dispute resolution via Co-operative Courts.
• Transparent governance and financial flexibility.

In conclusion, a successful transition, whether a change from cohousing society to condominium or a conversion to society, requires legal advice and community effort.

FAQs

Q1. What is the difference between a condominium and cooperative housing society? 

 A condominium means that you own each unit as well as share common amenities, and a cooperative society owns the property as a whole. A society typically has votes on a one-member/one-vote basis, and a cooperative society would have a more stringent governance process.

Q2. What are the advantages of changing from a condominium plan to a society? 

 Advantages include FSI rights, tax, redevelopment, decision-making as a community, and control. 

Q3. Is consensus needed to convert a condominium into a cooperative housing society in Maharashtra? 

The change to the Maharashtra Apartment Ownership Act in 2018 now allows 51% of apartment owners to complete registration and convert the apartment model to a Cooperative Housing Society. 

Q4. Can apartment owners continue with the formation of a cooperative housing society if the builder doesn’t cooperate? 

Yes — the owners can send notice to the builder, and also include the Registrar, and potentially seek relief through the courts. 

Q5. What are the initial steps to form an apartment society? 

Start with at least 10 members, by drafting bylaws, naming the society, appointing the office bearers, and finally applying for registration along with the required documents and fee.