When joining a housing society, it is common to end up with an annoyingly huge pile of contracts, grants and forms. The share certificate is one such document that is easily overlooked in spite of its importance. Here is everything you need to know about share certificates to avoid any hassle in the future.
WHAT IS SHARE CERTIFICATE
A share certificate is issued by the housing society to legally certify that the recipient owns some shares in the cooperative housing society. As per the by-laws, this certificate will include:
● A unique identification number
● The number of shares issued
● The valuation of the shares
● The name of the member
All members are provided with this certificate free of cost within 6 months of allotment of shares. The total share capital is authorised when the society is registered, with shares being divided at Rs.50/share.
SHARE CERTIFICATE CHECKLIST
- Ensure there are no encumbrances, all debts are cleared, and there is no lien on your property before issuing a share certificate.
- The conveyance deed from the builder should be in possession of the society
- An indemnity bond will be required, stating that the share certificate will not be transferred to any party for favour or collateral
- The certificate must be collected in person
- The original sale agreement must be presented while collecting the share certificate.
- The committee must have already authorised the certificate before it is issued by the Secretary
- The certificate must bear the seal of the society and must be signed by the Chairman, the Secretary and one member of the committee
- Avoid spelling mistakes to prevent future headaches
HOW TO TRANSFER SHARE CERTIFICATE IN A HOUSING SOCIETY
In case of a resale of the property, the society must be provided with any forms and signatures requested. A sample form of the same has been provided, though specific document requirements may change from one society to the next.
The new owner must ensure that any debts of the previous owner are cleared and must bear culpability if they are not. Furthermore, he/she must pay a transfer premium is set by society.
In case of the death of an owner, his/her heirs have 6 months to apply for a transfer of shares to a nominee. This will entail a new share certificate is issued for the new owner.
ISSUANCE OF DUPLICATE SHARE CERTIFICATE
Share certificates are issued quite often and without much ceremony. To the point where readymade booklets of these certificates are widely available.
However, duplicating a share certificate is not a simple process, requiring multiple bureaucratic hurdles to be jumped. Here is the procedure that must be followed:
● File an FIR (first investigation report) with the local police station, stating that your original share certificate has been lost/stolen. Retain a copy for future use
● Write an application to the society, requesting a duplicate share certificate be issued due to loss/theft of the original. Attach a copy of the FIR to this application
● Provide an indemnity bond of Rs.200, stating that all the costs of issuing a duplicate copy will be borne by you. This bond must be notarized and the application, along with the bond and the FIR, must be attached
● The managing committee will review and approve or deny this application at the next general body meeting
● Once approved, the society will put up an announcement on the notice board and will publish this duplication notice in 2 local newspapers. This cost is also borne by you
● There is a 15-day wait, during which any objections raised are looked into by the committee before proceeding forward
● Assuming no objections remain, the duplicate certificate is issued
Given how long and tedious this process is, it is advisable to keep the original share certificate safe and in good condition.