An increase in population growth over the last few years coupled with the lack of land to be developed for housing has led to the construction of many apartment complexes so that maximum people can be accommodated in minimum space. Construction companies develop the land and build tall apartments but after the flats have been handed over to the residents, they are in charge of maintenance of apartment facilities and this is done through the Apartment Owners Association.
Apartment Owners Association
The Apartment Owners Association (AOA) is a statutory body that is formed by elected representative of the residents. These representatives are apartment owners as well and the they work for the welfare of all the residents by protecting their rights. The Association must be formed by at least 7 apartment owners and must be registered under the Societies Registration Act, 1960. Every owner of a flat in the apartment building is a member of the association and every person who is in lawful possession of the flat, except the owner, is the associate member and must pay a maintenance fee to use the common facilities but they do not have the right to vote. All members of the association form the General Body and with this Body lies the authority of the Association. The General Body can alter, rescind or amend the bye-laws with the approval and consent of at least 13 members who vote in the general body. The Management Committee is a board of members, comprising of a President, Vice-President, Secretary, Treasury and eight other members, elected from and by the General Body and they represent the Association in matters concerning the building and the rights of the residents[i].
Duties of the Apartment Owners Association
According to the Real Estate (Regulation and Development) Act, 2016, “every allottee, who has entered into an agreement for sale to take an apartment, plot or building shall be responsible to make necessary payments within the time as specified and shall pay the share of the registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent, and other charges”. This means that every homeowner in a housing society or apartment has to pay an amount in periodic instalments for the regular maintenance and operations of the common facilities in the apartment. Common areas are all the community and commercial facilities and they include swimming pools, staircases, elevators, lobbies, fire escapes, common entrances and exits, basements, terraces, parks, play areas, water tanks, etc. Basically, every part of the apartment, be it the park or the lobby, the community centre or the pool, the elevators or the children’s playground, is maintained using the money that the apartment owners pay on a monthly or annual basis. The Apartment Owners Association collects the money and allocates it towards maintenance and this is the primary duty of the AOA so it comes under the definition of ‘service’ provided under the Consumer Protection Act, 2019. The Act defines ‘service’ as “service of any description which is made available to potential users and includes, but not limited to, the provision of facilities in connection with banking, financing, insurance, transport, processing, supply of electrical or other energy, telecom, boarding or lodging or both, housing construction, entertainment, amusement or the purveying of news or other information, but does not include the rendering of any service free of charge or under a contract of personal service.” Therefore, when the AOA is negligent in maintaining the common areas and facilities, the residents can file a complaint against the Association in the Consumer Forum for deficiency of service.
Need to register an Apartment Owners Association
An Apartment Owners Association not only maintains facilities but also has the legal powers to protect its members and defend legal action taken against the association and this power comes from registering the society. The AOA can be registered under the Societies Registration Act, 1960 but in some states, it must also be registered under the special state legislation[ii]. For example, in Karnataka, all AOAs must be registered under the Karnataka Societies Registration Act, 1960. An Association does not necessarily have to be registered but a registered Association enjoys more rights than a non-registered one.
Responsibilities of an Apartment Owners Association
The AOA is a legal body and therefore, it’s Management Committee has certain rights and duties such as[iii]:
- Acting as an arbitrator to solve disputes between residents
- Punishing residents guilty of theft, forgery or causing damage
- Lodging a police complaint against the builders if they fail to respond to a notice informing them of the Association’s decision to take legal action. This can be filed in case there is a delay in completion of the project or for compensation payable for loss or damages caused.
- Filing cases in the Consumer Protection Forums in case the builders do not comply with statutory obligations. The Consumer Protection Act, 2019 allows for the Apartment Association to file complaints on behalf of all the residents who share the same interests.
- Criminally suing builders for breach of contract, fraud, misrepresentation or not responding to grievances of the residents
Even though only the AOA has the right to file complaints against the builders in a court of law, the residents form the General Body of the AOA and they pay maintenance charges to the AOA according to the bye-laws formed by them. Therefore, the residents have the right to file a complaint in the consumer forums for deficiency of service[iv] in case the Association has failed to adequately maintain the facilities. In the case of K. S. Kumaresan v. Apartment Owners Welfare Association[v], the District Consumer Redressal Council awarded compensation to a resident of the apartment for the mental agony caused by the Association by failing to maintain the facilities in the apartment.
Though the constructors of the apartment have no responsibilities once the apartments have been handed off, the Apartment Owners Association is empowered to resolve all disputes as well as to register civil or criminal complaints against the builders for non-compliance. However, under the Consumer Protection Act, 2019, only a registered Apartment Owners Association can bring these complaints in a Consumer Protection Forum and registered associations also enjoy more rights. Therefore, though registration is not mandatory, it is encouraged.
Edited by Pragash Boopal
Approved & Published – Sakshi Raje
[i]San Bannerjee, A guide to Apartment Owners Association in Bangalore, ADDA, (September 6, 2019, 9:18 PM), http://adda.io/blog/2009/03/a-guide-to-apartment-owners-associations-in-bangalore/.
[ii]Harini Balasubramanian, Why an Apartment Society should be registered, Makaan, (September 6, 2019, 9:26 PM), https://www.makaan.com/iq/buy-sell-move-property/why-an-apartment-society-must-be-registered.
[iii]Guide to Apartment Owners Association: Formation and Functioning, CommonFloor, (September 6, 2019, 9:51 PM), https://www.commonfloor.com/guide/guide-to-apartment-owners-association-formation-and-functioning-687.html.
[iv] The Consumer Protection Act, 2019, No. 35, Acts of Parliament, (2019).
[v] K. S. Kumaresan v. Apartment Owners Welfare Association, (2015), District Consumer Redressal Council, Chennai.