CHENNAI: The Madras High Court has upheld an order issued by the District Registrar (Administration) Chennai quashing a housing association’s bylaw that allowed it to charge transfer fees while changing the ownership of flats. The court also directed refunding of the transfer fee collected from the flat owner within four weeks.

“While ownership is transferred, the association can claim only maintenance charges. A transfer fee is not contemplated under the Act and such collections are undoubtedly illegal and impermissible, said Justice SM Subramaniam of the vacation court.

Further, the judge warned against coercive action by the flat owners’ association or its office-bearers against members under any circumstance. “Such illegal activities are liable for prosecution under the criminal procedure code,” the judge ruled dismissing the petition by Hiren Botadra, secretary of Ankur Grand Owners’ Association, Kilpauk.

The petitioner had sought quashing of the Chennai Registrar (Administration) order, which nullified a particular clause of the association’s bylaw that allows the collection of transfer fees. The association had tried to collect the transfer fee when one of the flat owners sold her flat to another person.