Flat buyers need to sort out crucial issues with builders at the time of purchase and with the apartment owners’ association later.
Bangalore is the fifth most populous urban agglomeration and one of the fast growing cities in India. As per the 2001 census the population of Bangalore was 57.01 lakh which increased to 84.25 lakh in 2011 and soon will be one crore. Bangalore attracts people from all over the country with its good climate and job opportunities. Because of increase in land value, a majority of the migrants prefer to opt for apartments rather than independent houses. The concept of apartments is of recent origin in Bangalore and the first of the lot were constructed in Malleswaram, an extension known for bungalows with vast open spaces and gardens.
Now, there are a whole lot of apartments in Bangalore and builders and developers are building more and more of them and using all kinds of tactics to sell them. A few builders promise heaven and deliver hell to the purchasers. Many buy flats without knowing the content of the sale agreement, sale deed and apartment maintenance rules.
In a majority of the sale agreements and sale deeds a clause says the builder or promoter will form the apartment owners’ association and till such time it is the responsibility of the builder or promoter to maintain the premises. A considerable amount is collected for the purpose from the purchasers. Either it is retained by the builder or the account of the same is not given to the purchasers or owners’ association. For some builders/developers the huge deposit collected is a major source of income and hence they do not take the initiative to form the association.
A good news for the apartment/ flat purchasers is that the Central Government is bringing in the Real Estate (Regulation and Development) Bill, 2013, which aims to protect the interests of consumers, promote fair play in transactions and ensure timely execution of projects. It deals with transfer of property, registration and deeds and documents and contracts, through the Real Estate Regulatory Authority and Real Estate Appellate Tribunal. The bill is expected to ensure greater accountability towards consumers and reduce frauds and delays.
There are basically three Acts for registering an apartment owners' association:
The Karnataka Apartment Ownership Act, 1972
The Karnataka Societies Registration Act, 1960
The Ownership Flats Act and Companies Act
The Karnataka Apartment Ownership Act, 1972, exclusively deals with residential apartments. The law makes each apartment a transferable and heritable property with separate Khata and specific undivided interest in land. The disadvantage in forming and association under this Act is that it is often difficult to gather all the owners of the apartment at a time for the registration of the association.
In Bangalore, most of the associations are formed and registered under the Karnataka Societies Registration Act, 1960. The associations can be formed with minimum seven members who are not less than 18 years. The associations are basically formed under this Act for day-to-day maintenance.
Under the Ownership Flats Act and Companies Act, a private company can be formed for the maintenance of a residential and commercial building. All the owners will be issued shares and rules govern the allotment and transfer of shares. This is not effective in Karnataka, because the cooperative societies may not have companies as its members.
The big question before the general publicis: under the provisions of which Act should the apartment owners’ association be registered and which is the authorised department to regulate it?
As per the sale agreement and sale deed conditions, the builder is supposed to form the association or housing society within four months of sale of 60 per cent of flats. The association is then to be handed over to the owners’ association. If the builder fails to form and register a society, the residents can form the association on their own.
Formation of the association is a vital task and apartment owners or residents need to be aware of all the related laws and regulations. The onus lies on the residents to enrol themselves as members of the association or cooperative housing society to safeguard their rights and titles.
As per the prevailing situation in Bangalore, the registered associations are mostly managed by a committee which consists of a President, Secretary and Treasurer with three to four elected members as per the approved byelaws. It is the duty and responsibility of all the members/ residents to take active part in the general body meeting and pay maintenance charge as per the decision of the general body.
The experience with a majority of the associations is that a majority of the members fail to attend the meetings and not take part in managing and cooperating with the association’s activities.
There are different procedures or methods adopted by the association or society for collecting the monthly maintenance fee.
Some of the important practices that are prevalent are the following: flat monthly fee; per square ft. rate; partial flat rate; and mixed approach. The method of calculating maintenance fee varies depending on the agreement or byelaw of association. So long as there is no dispute, any system acceptable to all the apartment owners can be implemented on the basis of agreement or consensus.
The appropriate authority must make it known to the members that the decision of the general body is final and all the members pay accordingly, which will solve many conflicting issues.
There are some issues like:
1) People purchasing two flats and combining it without approval from the association and appropriate authority and saying that they will pay for only one flat. Some members are not aware that no addition or alteration of existing flat in an apartment can be done without the consent of the society or association and also without the approval of the appropriate authorities.
2) Not paying maintenance charges in-time as per the resolution of the general body, which will affect the smooth running of the society.
The association faces legal issues when the builder unauthorisedly constructs a few floors and sells the flats. In such cases its effect on the undivided share of the property; whether the occupants/ purchasers of such flats should be made association members; whether the builder is required to obtain a NOC from the owners’ association to get the construction regularised need to be considered. The draft rule earlier framed in the State insisted on a NOC from the association.
It is not clear whether the new rule being framed has this provision or not. Hope the department concerned will retain this provision in the interest of the purchasers.
Many members of the association are not aware of the following don’ts:
Don’t change the horizontal or vertical existing dimensions of the structure.
Don’t change the locations of bathroom/ kitchen sink, in a way that can cause leakage to residents below;
Don’t replace or remove any structures like load bearing walls.
Don’t merge fences by removal or opening any walls in between two or more tenancies.
Don’t allow any unauthorised additions / alterations thereby loading the existing the structure.
Don’t do any work which would jeopardise the safety of the building.
Provisions are made in the by-laws of the association for collecting the maintenance charges. In the event of default by any member, the association has the right to deny facilities to the defaulter.
In States such as Maharashtra, Gujarat, and Delhi, the Apartment Ownership Act paves the way for smooth running of the associations. Why cannot Bangaloreans follow suit? If the issues related to apartments are not addressed on priority basis by the appropriate authorities, legal wrangles will continue.
(The author is a former Director of Town Planning, Government of Karnataka)