Bengaluru’s real estate market has recently come under the spotlight after reports emerged of housing societies demanding steep fees from resale buyers for issuing no-objection certificates (NOCs), critical for home loan approvals. In one instance, a resale flat priced at Rs 60 lakh reportedly triggered an NOC demand of Rs 1 lakh, prompting concerns over transparency and legality in society-led charges.
NOCs are intended as formal confirmations that all dues associated with a property maintenance, electricity, and statutory fees have been cleared by the previous owner, allowing smooth transfer of ownership. Legal experts emphasise that these certificates are not designed as revenue tools for resident welfare associations. Arbitrary or inflated fees, particularly when labelled as “capex contributions,” lack clear statutory backing and can be contested in court. Industry observers note that while transfer and membership charges are standard practice in Bengaluru, the amounts are typically capped under the society’s registered bye-laws. Any attempt to impose additional lump-sum payments could expose associations to regulatory scrutiny and potential legal challenges. “The NOC should merely safeguard buyer and lender interests by confirming cleared dues. It is not a mechanism for societies to generate extra funds,” said a senior legal consultant specialising in urban property law. The issue highlights wider governance challenges in city housing societies, where administrative discretion often intersects with financial interests. Some buyers have reported successfully bypassing excessive NOC demands by providing proof of dues clearance through society apps or bank-confirmed payment histories.
Experts say that such approaches not only facilitate timely property transfers but also reinforce accountability and record-keeping within resident associations. The situation also raises questions for financial institutions. Banks require NOCs to approve home loans, but reliance on society-issued certificates can delay funding if associations exercise arbitrary control. “Transparent processes and digital record verification could reduce friction in resale transactions, improve urban housing efficiency, and protect buyers from exploitative practices,” noted an urban development analyst. Urban planners argue that these disputes, though financial in nature, have civic implications. Delays in property transfer reduce liquidity in the secondary housing market and can increase pressure on affordable housing segments by artificially restricting resale activity. Strengthening governance norms, integrating digital verification systems, and enforcing bye-law compliance could create a more equitable and predictable real estate ecosystem in Bengaluru.
As Bengaluru continues to see robust resale activity driven by tech professionals and first-time buyers, monitoring and regulating society practices around NOC issuance will be critical for maintaining trust in urban housing markets and ensuring the city’s residential growth aligns with transparent, people-first governance.
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