Society Dues Before Selling a Flat: Who Pays, the Buyer or the Seller?

The seller owes every rupee of society dues that were built up while they owned the flat. That is the starting rule. The complication is that a housing society does not always see it that way. Courts have repeatedly treated unpaid maintenance as attached to the flat itself, so a buyer who ignores arrears can find membership refused or a recovery demand arriving later.

This guide covers who is liable for society dues before selling a flat, how societies enforce their claims, and the paperwork that protects both sides. The legal examples come mainly from Maharashtra, where the case law is most developed.

Who is responsible for society dues when a flat is sold?

Between buyer and seller, the seller pays all dues up to the date of possession. The buyer pays charges that fall due after that date. This split is a matter of contract, so the sale agreement should state it in writing.

Between the society and the flat, the position is less comfortable for the buyer. In July 2026 the Bombay High Court held that an auction purchaser cannot claim society membership without first clearing the previous owner's maintenance dues, because that liability passes with the flat. An earlier ruling went the same way in a Dahisar case, where the court set aside orders forcing a society to admit a commercial unit buyer while Rs 58 lakh of arrears, including property tax, remained unpaid.

So the seller owes the money, but the buyer's membership and share certificate can stall until it is paid. If a home loan is involved, the lender may wait too.

Buyers should also complete a broader property title verification before completing the resale, including checks for encumbrances, ownership records and other outstanding claims. 

How can a society recover old dues?

In Maharashtra, a society can approach the Registrar for a recovery certificate under Section 154B-29 of the Maharashtra Co-operative Societies Act, 1960. A July 2026 Bombay High Court ruling on a Thane society held that maintenance dues are a recurring liability with no limitation period, and the claim there went back to 2005. The same ruling said that a missing or unregistered sale agreement does not by itself protect an occupant from liability. Old dues do not quietly expire. A seller who thinks a three-year-old default is forgotten may be wrong, and a buyer who expects society to let it go is taking a gamble.

One recent change helps the defaulter slightly. Under the Maharashtra Co-operative Societies (Amendment) Rules, 2026, interest on overdue dues cannot exceed 12 per cent simple interest a year, down from the earlier ceiling of 21 per cent. The rules were notified on 18 June 2026. What counts as society dues?

A worked example

These figures are made up to show the arithmetic. Say a seller has not paid Rs 4,000 a month for 12 months, so Rs 48,000 is outstanding. If every rupee had been overdue for the full year, interest at the 12 per cent cap would be at most Rs 5,760 (48,000 x 12%). The real figure is lower, because later months have been overdue for less time. The society's demand should therefore land between Rs 48,000 and about Rs 53,760.

The cleanest fix is to pay this to the society directly from the sale consideration on registration day. The seller receives the balance, the society gets its money, and the buyer holds a receipt. Your society's ledger and bye-laws decide the actual amount.

Steps to follow before the sale closes

1. Get an itemised statement. The seller asks the society office for a ledger showing maintenance, interest and any special levies.
2. Settle the amount. The seller clears arrears, or both sides agree in writing to pay them from sale proceeds on registration day. Charges for the running month are split as on the possession date.
3. Collect a no-dues certificate. The buyer should insist on a dated and stamped certificate issued by the society or residents' association itself, not a verbal assurance. Check it against the ledger and recent receipts. The buyer should also cross-check the wider transaction paperwork against the documents required to buy a property in India before registration. 
4. Add an indemnity clause. The agreement should say the seller bears all dues up to possession. Note that an indemnity gives the buyer a claim against the seller but does not stop the society from pursuing the current owner first.
5. Fix the transfer fee in writing. Decide who pays it and get a receipt.
6. Apply for the society NOC early. Lenders often ask for it, and one reported case saw a bank withhold payment to the seller until the society NOC arrived. If the flat is still under a home loan, the process also involves obtaining the lender's outstanding-loan statement, No Dues Certificate and release of the original property documents; see our guide to selling a mortgaged property. 

Who pays the society transfer fee?

It is separate from arrears, and practice varies. Several guides say the buyer usually pays, while others say it depends on the society's bye-laws and what the two sides agree on. Settle it before the token amount changes hands. Be wary of inflated demands: a Bombay High Court ruling lets owners and buyers contest excessive transfer fees, even when called a voluntary donation. 

Rules differ outside Maharashtra

The case law above applies to cooperative housing societies in Maharashtra. Flats in Delhi NCR, Uttar Pradesh, Karnataka and other states are often run by a resident welfare association, an apartment owners' association or a builder's maintenance agency, and the governing law differs. Many builder agreements already require a no-dues certificate from the promoter or maintenance agency before any resale. For resale apartments, this should form part of the wider property title and ownership due diligence rather than being treated as a standalone society check. 

The sensible habit is the same everywhere: treat dues as attached to the flat until a written clearance says otherwise. For a live dispute, speak to a property lawyer in your state.

Settle the figure, pay it on registration day and keep the certificate. An hour at the society office before signing costs far less than a recovery notice a year later.