Bought a resale flat without NOC? Experts explain the risk of old dues

A homebuyer’s post on Reddit about being asked to pay Rs 80,000 in unpaid maintenance charges left behind by the previous owner has sparked a common question among apartment buyers:

Can a housing society force a new owner to clear the old owner’s dues?

The buyer said he purchased a flat in 2022 through a bank loan, with most of the transaction handled by a broker.

The seller reportedly assured him that around Rs 80,000 in pending maintenance dues would be cleared.

However, a few months after moving in, the apartment association demanded that the new owner pay the outstanding amount, claiming he should have obtained a no-objection certificate (NOC) before buying the property.

The issue went quiet for some time after the association’s committee changed. But now, former committee members have approached the buyer again, demanding payment.

Legal experts say such disputes are more common than many buyers realise and usually arise because buyers fail to verify society dues before completing the purchase.

The short answer is no. There is no single law across India that automatically transfers a previous owner’s maintenance liability to the buyer.

However, that does not necessarily mean the apartment association cannot demand payment.

According to Alay Razvi, managing partner, Accord Juris, the legal position depends on the applicable state apartment law, the association’s registered by-laws and the terms of the sale deed. In several apartment ownership frameworks, unpaid maintenance can be treated as a charge attached to the flat, allowing the association to recover arrears from the current owner. The buyer may then recover the amount from the seller if the sale agreement required the seller to clear all dues.

Fazl Askari, senior associate at PSL Advocates & Solicitors, also says there is no pan-Indian rule on the issue. In some states, buyers and sellers may even be jointly liable for unpaid common expenses, while in others the matter is governed largely by contractual terms and local regulations.

Similarly, Madhura Samant, founder of Elarra Law Offices, notes that courts in several jurisdictions have allowed housing societies to recover maintenance arrears from the current owner, leaving the buyer to seek reimbursement from the seller if the latter had undertaken to clear the dues.

Many buyers assume that banks or registration authorities would detect unpaid maintenance charges. That is often not the case.

Experts point out that maintenance dues generally do not appear in public land records. Property registration mainly verifies ownership documents, stamp duty and other statutory requirements, not society accounts.

Razvi says nothing in property registration law ordinarily prevents a seller with unpaid maintenance dues from executing and registering a sale deed unless local rules or lenders specifically require a no-dues certificate.

Shravanth Shanker, managing partner at B. Shanker Advocates LLP, adds that registration of immovable property is governed by the Transfer of Property Act and the Registration Act. Unless local laws or association bye-laws specifically require clearance of maintenance dues before transfer, the sale can proceed even if arrears remain outstanding.

Tushar Kumar, advocate, Supreme Court, says registration authorities generally do not examine private maintenance disputes, while banks primarily focus on marketable title and the value of the property offered as security.

Experts say buyers should avoid making immediate payments without first understanding the legal basis of the demand.

According to Kumar, the first step is to obtain a written statement from the association showing the exact amount claimed, the period for which the dues relate and the relevant bye-laws supporting the demand. Buyers should also carefully examine the sale deed to check whether the seller had agreed to clear all outstanding maintenance before the transfer.

Tusi Kumar, partner at Singhania & Co., advises buyers to determine whether the arrears relate to the period before the purchase, verify whether a no-dues certificate was obtained and check whether the sale deed contains an indemnity or representation from the seller regarding pending liabilities.

If the association’s by-laws permit recovery from the present owner, some experts suggest paying the amount under protest to avoid disruption of essential services and then initiating recovery proceedings against the seller.

Razvi also recommends this practical approach where necessary, while noting that buyers should reserve their legal right to recover the money from the previous owner.

Legal experts say most such disputes can be avoided through proper due diligence before purchasing a flat.

They recommend that buyers should:

• Obtain a written no-dues or maintenance clearance certificate from the apartment association.

• Ask for a statement of outstanding maintenance charges before completing the purchase.

• Ensure the sale deed clearly states that all dues up to the date of sale have been paid by the seller.

• Include strong indemnity clauses requiring the seller to compensate the buyer for any undisclosed liabilities.

• Independently verify maintenance records instead of relying only on assurances from brokers or sellers.

Shashank Agarwal, founder of Legum Solis, says buyers should collect maintenance records, correspondence with the association and any written undertaking from the seller before concluding the transaction.

According to Samant, buyers may even consider retaining part of the sale consideration until the association confirms that all maintenance dues have been cleared.