Cooperative Housing Societies in West Bengal allow members to own properties in housing societies. However, there are certain guidelines regarding who can become a member of the Society. This article enumerates the different guidelines and also discusses how NRIs can become cooperative housing society members in West Bengal. If you are an NRI, you should definitely read this article. Do post your comments and queries down below.
A Co-operative Housing Society is formed under the West Bengal Co-operative Society Act, 2006 (previously the West Bengal Co-operative Society Act, 1983). The Act extends to the whole of West Bengal and came into force on 18th January, 2011 vide Notification No. 177 – Coop/H/2R – 1/2006. Under Section 157(1) of WBCS Act, 2006, the WBCS Rules, 2011 were formulated which along with the WBCS Act, 2006 regulates the formation and working of Co-operative Housing Societies in West Bengal. The Rules 2011 came into force on 18th January, 2011 vide Notification No. 180 – Coop/H/2R – 1/2006.
Under the WBCS Act, 2006, co-operative housing societies are formed as democratic institutions that are owned, managed and controlled by the members of the society who operate their business on the principles of co-operation and mutual aid.
Under Section 3(iv) of the WBCS Act, 2006, the economic benefits out of the Co-operative Society would belong to the members of the Society and the society acts as an autonomous body with little interference from the State Government. A co-operative housing society works on the theory of mutuality and sharing of funds among the members of the society and hence the society is exempted from tax.
The Housing Society can also enter into contracts for business purpose. However, any income that is received by the Society from outside, i.e. from sources other than the members of the Society is taxable. Renting parking lot or commercial space to outsiders would incur tax liability.
The board of Directors, in a Housing Society, as formed under Section 32 of the WBCS Act, 2006, controls the operations of the housing society and constitutes the governing body vide Section 4(8) of the WBCS Act, 2006. A housing Co-operative Society is defined under Section 4(36) of the WBCS Act, 2006 and includes a society whose primary object is to provide to its members dwelling units, flats or provide land for construction of such flats or houses and the Society may also provide finance to the members for purchase of land and construction of flats thereupon. The Society also looks into the maintenance of common service facilities to its members.
A Co-operative is defined under Rule 6 of the Rules, 2011 and states:
“Cooperatives are autonomous associations of persons united voluntarily to meet their common needs and aspirations through a jointly owned and democratically – controlled enterprise and adhering to the cooperative principles and values.”
Persons from other States in India can also become members of a housing co-operative society registered in West Bengal, provided they have the intention of residing in West Bengal permanently within a period of one year from the date of application for membership [vide Section 87(d) of WBCS Act, 2006]. Further, any member who wishes to be a part of the housing co-operative society in West Bengal must make a declaration before a Magistrate stating several details as enumerated under Section 87 WBCS Act, 2006.
The member must also showcase genuine need for housing or additional accommodation from such Co-operative Society.
Practically speaking, a person may always showcase intention to reside in West Bengal and express his need for accommodation in a co-operative housing society in West Bengal but thereafter due to change in circumstances he may also sell the flat or rent it out according to the given situation by showcasing that due to professional or business needs he has to reside elsewhere. You must be aware that under such circumstances, these declarations cannot be used against you. However, a test of bonafide may be called if the you fail to live up to the declaration.
An NRI can also be a member of Co-operative Housing Society in West Bengal if he/she abides by the above provisions and gives the necessary directions, as provided under Section 87 of WBCS Act, 2006. You can refer to the provisions contained in Foreign Exchange Management Act (FEMA) for further guidance regarding what kind of property can be held by NRIs. Agricultural land cannot be held by NRIs.
A housing Co-operative Society in West Bengal can be of three different types under Section 88 WBCS Act, 2006:
a) a society where all the members have purchased the land for construction of unit houses on separate plots on their own or through the Co-operative Society. However, if the members elect to construct houses on their own then they must construct the same within 3 years from the date of possession.
b) A housing society where the members have purchased land for construction of flats which shall be allotted to the members by the society.
c) Lastly, the society may also be formed after construction has started on any building and when the members of the building want to form a Co-operative society for providing maintenance, common services and amenities.
You should understand that the Housing Society can build more apartments than the number of members who have subscribed as long as the plan or scheme has such option. Flats can always exceed the number of members but number of members should not exceed total number of apartments or flats.
However, under Rule 131(2) of WBCS Rules, 2011:
“In a co-operative housing society the number of members shall not exceed the total number of plots, houses or apartments proposed by a society to be allotted to members under any scheme or project of such society:
Provided that member shall be eligible for allotment of only one plot, house or apartment in a housing co-operative society.”
From the above reading, it must be understood that although a person from outside West Bengal or an NRI can be member of Co-operative Housing Society in West Bengal but they have to abide by several other regulations and guidelines as provided under WBCS Act 2006 and WBCS Rules 2011.
For more information and advice about Co-operative Housing Society check here: https://advocatechenoyceil.com/2014/02/19/co-operative-housing-society-west-bengal-rules/