The very act of buying or selling real estate entails some amount of paperwork, legal procedures, and fees. While the phrase “transfer fee” becomes popular in areas such as Magarpatta Road real estate plots in Pune, it begs the question, “What is this fee all about? Why does it need to be charged? Can my builder even legally charge me this transfer fee?”
Let us dramatize it in simple terms to help you make smarter choices when investing in residential projects in Pune or commercial property in Pune.
What is a Transfer Fee in Real Estate?
A charge levied when the title of a property moves from one person to another is called transfer fees. Usually, any given housing society, apartment complex, and project set forth by real estate developers in Pune or anywhere else in India may charge transfer fees.
Think of it as an administrative fee collected for the standing of the record and to uphold the name of the actual person in the relevant documents officially. Transfer fees will mostly come into effect in resale cases where the first purchaser sells the property to another sort of person before even possessing it or even after registration.
Purpose of the Transfer Fee:
Transfer fees do serve some purposes that are set from time to time:
Administrative Charges: Developers or societies are charged for the updation of their system or maintenance of records relating to ownership. This fee is aimed at covering such administrative charges.
Legal and Documentation Work: These could be jobs picked up by the developer or housing society for processing NOCs or updating their internal database of service agreements.
Discourage Frequent Resales: Transfer fees can help prevent flipping and help facilitate the long-term realization of planning initiatives for creating a safe neighborhood while preventing chaos within residential complexes.
Can Builders Charge You a Transfer Fee?
Confusing? Now, the short answer: Yes, but under certain conditions.
When a Builder can Charge You:
Before Registration: If you are selling before it gets registered in your name (during the construction phase, for example), the builder is technically still the owner. Hence, they might charge a transfer charge for registering the change of the buyer’s name.
As Per Agreement: You may even be made to pay such fees if the agreement between the buyer and the builder prescribes such charges. Especially in large residential Pune projects or pre-launch bookings, this is very much a standard practice.
Administrative Justification: Builders running huge townships on Magarpatta Road may feel justified in charging the fee to compensate them for the magnitude of administrative work involved in handling the internal transfers.
When a Builder Cannot Charge You:
After Registration: At the point when you become the legal owner of the property (after registration and payment of stamp duty), the builder is not entitled to charge any transfer fee if you try to sell it further. Any such imposition would be illegal unless administered by a co-operative housing society.
No Mention in Agreement: If there is no mention of transfer fees in your sale agreement, a builder has no right to charge them retrospectively.
One set of rules change once the builder hands over the project to the registered co-operative housing society. At this stage:
What About Housing Societies?
The society may charge a nominal transfer fee for updating ownership records.
According to the Model Bye-Laws of co-operative housing societies in Maharashtra, this fee is usually capped (for example, at around ₹25,000).
One should be aware of the difference between society charges and builder charges. Builders should not be asking for any fee once the society is in charge.
Why This Matters for Buyers and Sellers in Pune
Whether you intend to acquire commercial property in Pune or are considering the best real estate developers in Pune, knowing about transfer fees for legality and purpose keep you financially prepared.
It is particularly useful to shout out your rights in places like Magarpatta Road real estate, where resale activity is picking up steam thanks to the winning formula of location and infrastructural growth, which might subject you to uncalled-for financial charges.
And always, but always, whether you’re a newbie or an investor offloading some flats:
Read the builder-buyer agreement carefully.
Ask the developer to highlight how their transfer policies work.
Consult a real estate legal advisor if transfer fees don’t look right.
Final Thoughts:
Anurag Goel, a property analyst and consultant with 15 years of expertise in the Pune property market, opines,
“Transfer fees are instituted in order that ownership records remain transparent and speculative buying be discouraged. However, the buyer has to exercise caution to ensure that such a fee is justifiable, and that this is documented legally. Quite dishearteningly, one could lose much money by entering into transactions without deemed care for the consequences of their decisions.”
This advice goes particularly well with the sun shining on the commercial property in Pune, where ownership may change frequently, with more buyers stepping in.
– Anurag Goel
