Why An Apartment Society Must Be Registered
In India, an apartment association is formed as a voluntary organisation of the owners of apartments of a particular housing society. The Apartment Owners Association (AOA) represents the interests and protects the rights of the property owners. It is also responsible for providing valuable services like maintenance of common areas, enforcing society regulations and working towards the residents’ welfare through special initiatives or events. As an arbitrator, the AOA is also authorised to settle disputes, and protect its members, and defend any legal case filed against the association.
For instance, the apartment association can take a developer to task and file a case to seek compensation for losses caused due to poor construction. However, to execute this, the association must be registered. In 2017, The National Consumer Disputes Redressal Commission (NCDRC) declared 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. Legally speaking, a recognised consumer association is any voluntary consumer association registered under the Companies Act, 1956 (1 of 1956) or any other law for the time being in force.
An apartment association which is registered enjoys certain advantages as compared to an association which is not registered.
The need for registration of apartment associations
An apartment association can be formed under the Societies Registration Act - 1960 and Apartment Association Act or some local legislation in different cities. Only a registered apartment association can function as an arbitrator for resolution of any dispute. Such associations form rules and bye-laws which every resident in the building must adhere to. However, co-dwelling may give rise to conflicts among the residents or there may be issues either between residents and the managing committee or within the managing committee. In such cases:
*The association will take suitable action against residents who violate the rules of the society. This may include instances where a resident is utilising the residential space for commercial purposes or has differences with his or her neighbour on parking spaces, late-night partying, etc.
*Enforcement of law becomes the duty of the association thus maintaining discipline and ensuring harmony within the society. Hence, the apartment complex becomes safe and secure for the residents.
*The association has the right to charge interest and penalty if any member fails to pay the maintenance charges. It can sue the defaulting member and initiate legal action for recovery of any outstanding dues.
*The association can also take legal action against members who commit any offence like forging or cause any loss to the association. A registered apartment association must maintain proceeding reports which ensures transparency and smooth functioning of the society. So, the documents are available for reference even if one or more owners in the building move out.
*Moreover, information - also mentioned in the Deed of Declaration - such as the details of common facilities, and the ownership scheme is recorded for future use in case of legal issues.
Furthermore, a registered apartment association finds it easy with respect to executing tax formalities or bank operations - say opening an account.
The process of registering an apartment association
An Apartment Owners Association is formed with a minimum number of seven individuals, unanimously elected by residents of the society, following which the representatives fill and submit a memorandum.
An association comprises of 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).
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)
The association is then responsible for filing clear apartment association bye-laws - subject to changes, done by the members due to various circumstances. The maximum time limit to register a society is three months, which can be extended in case of serious situations. The management of the association can hold the office for a year. However, a re-election is possible with the consent of all the members.