Is it fair for Societies/ Developers to charge transfer fees from the sellers?
This is a highly contentious and hotly debated issue.
The fact of the matter is, that going strictly as per the law, the maximum transfer fees, which can be charged is Rs 25000.
Reality on the ground is another issue altogether, Let’s examine the facts.
In case of Societies: In most cases the maintenance charged to the members is often inadequate, keeping in pace with the growing expenses.
Most members will fight to maintain the existing maintenance, without any consideration for the rising costs.
Transfer charges are recovered under various terms such as voluntary donations, betterment charges, non refundable security charges etc.
This is possibly the only reason, why more than 90% of the Societies are able to sustain themselves. As regards the right or wrong of it, I leave it to your judgment.
In my experience of over 40 years in real estate broking, I have experienced Societies which are transparent & straight forward about the transfer charges are the easiest to deal with, as in most cases, the transfer charges are divided equally between the buyers and the sellers.
Once both parties are aware from the outset, they negotiate accordingly & it is more or less an accepted norm in Mumbai.
Then there are certain Societies, run by corrupt and unscrupulous committee members, who harass both parties and make money on the sly and pass on a negligible amount to the society.
Transfer charges charged by developers:
This is something, which is not digested easily by the sellers, as they feel cheated.
Till the time, it is conveyed to the buyers at the time of purchase, it’s fine.
Let us try to understand the logic behind top developers charging, ridiculous amounts as transfer fees:
This is done for the following reasons:
to discourage investors to sell their stock, at rates which are substantially lower than theirs. Each and every sale, at a reduced price impacts the bottom line of the developer.
The other reason is to reduce their workload.
The third and possibly the most significant reason is a situation in which the market is booming, the investors have paid 20% of the total value, they get a profit of 15% before their next instalment is due, without the deterent of transfer fees, 75% of people will cash out, seriously impacting the project sales and of course the developers bottom line.
PROTIP: When buying any property, please factor in all the expenses, to avoid any setbacks at an advanced stage of the transaction.
Working with a reputed and qualified estate consultant will ensure, you have a smooth and stress-free deal, while buying or selling.
See you with a fresh subject soon.
I am grateful for all your support always.
