Is Your Apartment Association Registered?

 Is Your Apartment Association Registered?

The National Consumer Disputes Redressal Commission (NCDRC) has made clear that only registered residents' welfare associations (RWAs), consumer organisations, cooperative societies or association of flat or plot buyers can file complaints against builders in the commission. This makes it even more important to get your association registered. Your association must be registered  under the Companies Act, 1956 (1 of 1956) or any other law for the time being in force.

 

Also, any group of homebuyers having a common interest or a common grievance and seeking the same or identical relief against the same person can come together without forming any association to file a case in NCDRC with a claim of Rs 1 crore or more. In case the claim is less than Rs 1 crore, such homebuyers would need to file cases in the district forum or state commission.

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Group housing is a popular format these days. Due to constraints and limitation in the land bank available for construction, many prefer opting for apartments. However, such community living also means that at various points in time, you would need to adjust, compromise or even give in and ensure the common good of all.

Such has been the case of Kamal Shah. Shah is one of the 24 apartment unit holders in a housing society. Recently, the residents in his building suggested that they should opt for noiseless generator as against the noisy generator that was being used till recently. Although the advice was good, Shah did not want to contribute the money required for this change. He felt that since he did not live in this apartment as it was leased out to a four-member family, this noise pollution shouldn't affect him at all. Other owners who had leased their units also felt the same. However, those who had invested for end-use (larger in number) came up asking for this change. The association in the building reached a conclusion that a noiseless generator should be installed as soon as possible as it was also in tune with the government guidelines and environmental standards as well. This is exactly why you need a welfare association within a housing society. More important is to get this association registered. 

Why should apartment associations be registered?

It becomes important to register your apartment association because such associations form rules and byelaws that are binding on everyone residing in the building. Co-dwelling is not simple anyway. There may be some who violate the rules of the society --- there are those who party late at night and there are those who do not pay maintenance charges on time. There could be someone who may have set up his workplace at home and therefore a lot of his clients come home and the 'residential' thus turns into 'commercial'. Associations have a say in all these matters and more, and in case of issues with your neighbours, it is better to approach them through your association than individually. 

Who forms an apartment association?

It is a democratic system. The minimum number of individuals required to get together to form an association is seven. These would unanimously elected by residents of the society/building. Representatives get together for a memorandum. The association needs to be registered and the following information is mandatory: 

  • Proposal letter addressed to the Registrar of Societies, signed by all executive committee members
  • Name of the association
  • Address of the association
  • Proceedings of the first general body meeting
  • Memorandum of association (name of the society, objectives, names and addresses/occupation of members, bye-laws (printed or typewritten)
  • Standard fee

An association would have a member (every apartment owner in the building), an associate member (other than the owner but lawfully occupying), a general body (all members of the association) and a management committee (a president, a vice-president, a secretary, a treasurer and eight other members)

How long does the management hold the office?

It is typically one year but they can go in for a re-election if all the members are consenting. 

Benefits of registered apartment associations

  • Registered apartment associations have to necessarily maintain proceeding reports. This helps maintain transparency which is required for smooth functioning of the society. Even if one or more owners in the building move out, the documents are available for time to time reference.
  • A registered apartment association can initiate and take part in legal battles where one or more members of the building are involved. 
  • Rule and law enforcement is the duty of this association. All the responsibility of maintaining a decorum and discipline rests with the association. Hence, it ensures that the apartment complex is safe and secure for the residents. 
  • Property-related taxes and other taxes that base itself on your address also become simpler for assessment purposes. 
  • Erring residents can be checked in a formal way. It helps maintain peace within the society and usually it checks any scuffle between residents. Curative measures for defaults can thus be enforced in the simplest way possible. 
  • Registered societies also help you speed up bank related procedures. 
  • Maintenance work and general welfare are taken care of by the association.
  • Additional information such as the details of the common facilities and the ownership scheme is also recorded for future use in case of legal issues. This information is carried in the Deed of Declaration.