This is an important legal document serving as proof of ownership and provides membership rights.

One may think that, the sale agreement is the ultimate proof of ownership, but did you know that the share certificate also yields equal importance? “Society share certificates are documents issued by housing societies to their members, representing their share in society. They are an essential document for anyone who owns a flat or property in a housing society. While your sale deed is proof that the property has been legally transferred in your name, a share certificate is legal proof that you are the rightful owner of the co-operative housing society’s shares,” mentions Mohit Ramsinghani, chief sales officer of a real estate group.

Further adding to this, Neha Gupta, principal associate, Athena Legal shares, “A housing society share certificate is a legal document that proves ownership and membership rights to members of a housing society. It has a unique number and mentions details like the member’s name, flat number, share value, etc.” The housing society is responsible for issuing the certificates and cost factor associated with the same. Rohit Gupta, CEO of a real estate company shares, “Once the developer gives possession of the building, these certificates are typically issued to flat owners within six months of the society’s registration free of charge. The total authorised share capital is determined by the registrar.”

Why do you need a share certificate?

The primary reason why a share certificate is important is because it serves as legal proof of your ownership of the share percentage in the society. Explaining in detail, Gupta asserts,

• Share certificates serve as irrefutable proof of a shareholder’s ownership rights in the cooperative housing society and their entitlement to occupy a specific unit. These certificates legally validate the resident’s stake in the property;
• During the sale or transfer of ownership of units, share certificates facilitate a smooth transition process by establishing the legal rights of new owners to live in their purchased flats;
• Shareholders often have voting rights in terms of society management based on the number of shares owned, as detailed in the certificates. Thus, shares equate to decision-making influence in the society;
• Financial obligations like maintenance fees, special society funds, etc are outlined in the share certificate, ensuring the fair distribution of expenses for facility upkeep across members;
• By granting access to shared amenities and common facilities in the society, the share certificate fosters a collective sense of well-being amongst resident members;
• While the sale/purchase deed establishes the legal transfer of the home, the share certificate confers membership and associated ownership privileges in society. The managing committee must duly issue these after completing necessary documentation.

How to get a share certificate?

You must apply to become a member of the co-operative housing organisation after buying a house. Amit Goenka, MD and CEO, Nisus Finance sheds some light on the process of obtaining a society share certificate and says,

1. “Submit a formal request to the housing society management or secretary;
2. Provide any required documentation or information as requested by the society;
3. Clear any outstanding dues or fees, if applicable;
4. Await processing and issuance of the share certificate by the society.”

What are the documents required for getting a share certificate?

“The most important document to be submitted is the registered agreement for the sale/sale deed for the flat along with a copy of the transfer forms duly signed and an affidavit in the prescribed form,” asserts Sadhav Mishra, partner, SNG & Partners, Advocates & Solicitors. Here is a look at the list of documents required for getting a share certificate as explained by Manmeet Kaur, partner, Karanjawala & Co.,

• “Application form for the share certificate as prescribed;
• Proof of ownership of the property;
• A copy of the share certificate allotment letter issued by the society along with the society’s registration certificate and by-laws;
• Copy of the latest property tax receipt.”

It is advised that you should check with the society for the documents and the exact procedure involved to get clarity as ultimately you will be dealing with them. Check for the documents needed or any specific requirements beforehand for a seamless process.

Things to keep in mind

There are a few things that you need to be aware of before applying for a share certificate. For example, “Your application will be examined by the managing committee of the society. You’ll be allowed to join the society after being accepted. You might be obliged to pay membership dues, share money symbolising your portion of the society, and any other fees determined as appropriate. The society will provide you with a share certificate upon the completion of your application and payment of all necessary fees. Your name, the address of the property, the share number, and the total number of shares held will all be listed in this document,” adds Rajkumar Singh, senior director, residential sales (Mumbai), Anarock Group.

Further adding to this, Ramsinghani mentions, “The society share certificate has to be collected by the member himself in person. The member’s property should be clear of lieu. Every housing society share certificate should have the seal of the society and be signed by the chairman, the secretary and one member of the committee and authorised by the committee before being issued by the secretary.” Kaur highlights, “An indemnity bond is to be issued to ensure that the shares have not been transferred to anyone else or no charge has been created on the said shares.”

Transfer of a share certificate in case of a resale

The share certificate has to be transferred to the new buyer in the case of a resale. Goenka explains the process and says,

1. “The seller initiates the transfer by submitting a formal request to the housing society along with relevant documents;
2. The society verifies the request and ensures that the seller clears all dues;
3. Upon approval, the society issues a new share certificate in the name of the buyer, transferring the ownership rights. Alternatively, a transfer entry is made onto the old share certificate and signed and stamped by the society.”

Overall the share certificate is a crucial document and ensures the rights and interests of the society members in a housing society. The importance of a share certificate in property transactions cannot be overstated as it also trumps the sale deed in some cases. Therefore, you should get your share certificate as soon as possible to avoid any further complications.

Do I need a share certificate to sell the property?

To sell a flat/unit, a share certificate in the name of the seller is a must document unless the share certificate has not been issued by the society till the date of transfer of the flat/unit.
– Sadhav Mishra

According to recent data, the issuance of share certificates by housing societies has become increasingly streamlined and digitised, with many societies adopting online platforms for faster processing and issuance of share certificates. Additionally, there has been a growing emphasis on transparency and accountability in housing society management, leading to improved processes for issuing and maintaining share certificates.
– Amit Goenka