Flat Allotment by Draw of Lots: Section 154B-26

A new housing society has flats to hand out and several members who each want the best one. Who decides which member gets which flat, and when does a member get written proof that the flat is allotted to them? Section 154B-26 of the Maharashtra Co-operative Societies Act answers both questions.

What the provision says

Section 154B-26(1) says that, except where there is a contract to the contrary, the Committee must allot plots of land, flats, houses or other dwelling units to Members "strictly on the basis of draw of lots". The draw is among those Members whose enrolment as a Member is found proper under the Act, the rules and the society's duly registered bye-laws.

Section 154B-26(2) says that every Member to whom a unit has been allotted, whether registered before or after the 2019 Ordinance came into force, must be issued a certificate of allotment by the society. It is issued under the society's seal and signature, in the form and on the terms and conditions prescribed. The certificate must be issued forthwith once the Member has paid all the dues determined and notified by the society.

What it means in practice

The Committee cannot hand out flats by preference or private understanding. Suppose two Members want the same flat and no contract says otherwise. The Chairman and the Secretary cannot simply pick one of them; the allotment has to come out of the draw of lots. A person whose enrolment has not been found proper is not part of the draw until that is settled.

The certificate follows the same logic. The society first determines and notifies the dues; once the Member pays all of them, the Act requires the certificate forthwith. For the limit on membership in relation to the number of flats, see this article. For how dues come into play when a flat is later transferred, see this article.

What your committee should do

1. 1Check whether any contract covers allotment before planning the draw, because the draw rule applies except where a contract says otherwise.
2. 2Confirm that each Member's enrolment is proper under the Act, the rules and the bye-laws before including that Member in the draw.
3. 3Allot only by draw of lots. As good practice, also keep a written record of how the draw was held.
4. 4Determine the dues and notify them to each allottee; doing this in writing and noting the date of payment is a sensible practice, not a requirement of the section.
5. 5Issue the certificate of allotment forthwith after payment, under the society's seal and signature, in the prescribed form.