Every association is governed by a set of Bye Laws. If you are a member of that society, you have every right to grab a copy of the same and check if there is a clause to that effect.
However if your association has been in existence for quite some time, the charges might have undergone a revision. The revision must be supported by a resolution duly passed as stipulated in the Bye Laws. Ask for a certified copy of the relevant extracts of the resolution.
Logically the association must have drafted its bye laws in conformity with the local law prevalent out there. Therefore if the Bye Laws empowers the society to collect such charges, you gotta budge. This is from the legal standpoint. Hope it helps!
In Maharashtra, It is fully legal and both buyer and seller have to pay Rs.25000 as transfer fee to the Association. But it may be differ from state to state.
The fee that an apartment owners association can charge when the member sells his flat is called Transfer fee. but when the apartment owners association will provide you with the NOC ( No Objection Certificate) then you do not have to pay the transfer fee. Before you sell the flat all the pending dues should be paid but if there are any pending dues then the apartment owners association cannot provide you with NOC.
There are some specific rules to be followed before selling your flat according to apartment owners association. To know the rules please follow the given article link Builders cannot charge Transfer fees