As Bangalore draws housing demand from all across the country; growing number of multi-storey apartments and high rises are dotting the Bangalore city scape. Formation of apartment association is a vital task and apartment owners or residents need to be aware of all the related laws and regulations as they would ensure the future protection of their rights. Apartment Owners Association is a statutory body that manages and operates all common resources and amenities. The onus lies on the residents that they enroll themselves as members of their apartment owners association or cooperative housing society to safeguard their rights and titles. As per norms, builders are supposed to form the Association or housing society within 4 months of the sale of 60 per cent of flats in the complex. The apartment ownes association is then to be handed over from the builder. However, if the builder fails to form and register a society, then the residents can form the association on their own. Registering the Apartment Association There are three Acts for registering an apartment or a housing society. 1. Karnataka Apartment Ownership Act, 1972 The Act exclusively deals with residential apartments in Bangalore. If an association is formed under the Act, then each apartment becomes a transferable and heritable property with separate khata and specific undivided interest in land. The apartment buyers need to submit their apartments to this Act by executing a deed of execution. Disadvantage in forming an association under this Act is that it is often difficult to gather all the owners of the apartment all at the same time for the registration of the association. The builder can obtain the power of attorney from all apartment owners and subsequently can submit the entire property to this Act. 2. Karnataka Societies Registration Act 1960 In Bangalore most of the associations are formed under this Act. The societies formed under this Act are for the promotion of charity, educational, science, art, literature or for the promotion of sports. The Act does not bind anybody who is not a member. The advantage of the Act is that it can be formed with a minimum of seven members who are not less than 18 years. Both residential and commercial building owners can become members of the society. The flat owners society formed under this Act can be effective for the limited purpose of managing the day to day affairs of maintenance. The flat owners society formed under this act can be effective for the limited purpose of managing the day to day affairs of maintenance. 3. The Ownership Flats Act and The Companies Act: Under this Act, a private company can be formed for the maintenance of an apartment, both residential and commercial. All the owners will be issued shares and rules for governing the allotment and transfer of shares would be formulated. It may not be very effective in Karnataka because undivided interest in land is sold off routinely in Bangalore and the co-operative societies may not have companies as its members. In Mumbai, London which the buildings are built are owned by a company or co-operative society, making this Act effective. Any type of association has to hold Annual General Body meetings and elect its office bearers. It also has to file audited balance sheets before the concerned authorities every year. Legal aspects of KAOA Apartments in Bangalore seem to be following the route to register themselves under the Karnataka Societies Registration Act, 1960. However, as has been witnessed, the Societies Registration Act is unlikely to safeguard the owners’ rights. Section 3 of the Societies Act defines the various types of societies that can be registered under the Act and none of them meet the definition of an apartment association. Due to this, many legal tussles have been going on between builders and apartment owners in Bangalore. An apartment association can be formed under two acts – the Karnataka Ownership Flats Act (KOFA) and the Karnataka Apartment Owners Association (KAOA). KOFA regulates the process of promotion, construction, sale, management and transfer of the apartment. KAOA was created with a view to make apartments heritable, transferable and mortgageable and to address issues related to management of the property. In a Cooperative Society setup, the building, common area and land is vested with the Cooperative Society and the allottees of the flat are deemed as “tenants” in legal parlance. It implies that a member has all rights to occupy his or her flat, but does not own an undivided share as is commonly understood. This is because all common property is vested with the Society. Hence, if your Society is registered under the Societies Act, 1960, then you would not be able to claim a mortgaged loan against the apartment you own. The reason being that banks may not be willing to sanction a loan against a mortgaged property (the flat) which you do not wholly own. It was under these circumstances that the Karnataka Apartment Owners’ Association came up in 1972. In India, the sale and purchase of immovable property is governed by the Transfer of Property Act of 1882, which does not cover apartments. The KAOA equates the ownership of an apartment with undivided share in land and common areas with ownership of immovable properties under the Transfer of Property Act. Apartment Owners Association Apartment Association is pivotal in legal handover of an apartment to the owner from the builder. Before the property can be legally handed over to the owners, the builder has to register the Society within four months of sale of 60 per cent of the flats. In case the builder fails to do so, residents can themselves form an apartment association. Following are the requirements for formation of apartment owners association: (I) Need seven or more members who must be above 18 years. (II) Memorandum of association with name and objects of association, details of members of governing body with name, address and occupation. (III) By-laws (rules and regulations) of the association. (IV) Fee for registration Legal hand over from builders Memorandum of Association and By-laws of the Association are pivotal while forming an association or housing society. Ensure that builder has obtained Occupancy Certificate for the apartment. Occupancy Certificate evidences the completion of the building as per the approved plan and assures its compliance to local laws. Here are all the documents for legal handover from the builder. 1. Deed of Declaration under 1972 Act. 2. Occupancy Certificate 3. NOC – Airports Authority of India 4. NOC- Ministry of Environment & Forests 5. Karnataka State Pollution Control Board – Consent 6. NOC from BDA for Construction 7. NOC – BSNL 8. NOC – BESCOM 9. BESCOM Approvals for Transformer & LT Panels. 10. BESCOM Sanction letter and Deposit Receipts 11. NOC- Karnataka Fire & Emergency Services & Conditional 12. Gas Approvals From Oil Corporations & Allotment Order 13. BDA Approved Plans & Modified Plans 14. Lift Approvals from Deputy Chief Electrical Inspector 15. BWSSB Sanction letter/Payment Receipt copy 16. List of Club House Movable Assets 17. Hand over of DG, Transformer & Fire Pump Details 18. Sump & Tank Capacity Details 19. Hand over -STP Pump Details 20. Hand Over – Pump Room Asset Details 21. Hand Over – Swimming Pool Room with List of Assets 22. Hand Over – Sewage Treatment Plant ……….KLD 23. Hand Over – Play Area Assets 24. Hand Over – Basement Fire Hydrant Equipment Details 25. Hand Over – All Block Yard Hydrant Equipment Details 26. Hand Over – Fire Hydrant Details Block wise 27. Hand Over – Fire Extinguisher Details 28. Hand Over – Security Room Main Gate 29. Hand Over – Gas Bank Equipment Details 30. Hand Over – Gym Room Equipment 31. Hand Over – Club house Key List Details 32. Hand Over – Common Area Key list Details 33. Hand Over – List of Manuals & Service Report Files 34. Hand Over – Fire Pump Details 35. Hand Over – List of Architectural Working Drawing 36. Statement of Maintenance Deposit or Corpus Fund 37. Renewals – Annexure – E 38. Address Book of all the Flat Owners. 39. RR.No. Of all the Flats 40. Title Deed What is a by-law in an Apartment Society? By-laws are the guidelines, which have provisions relating to the affairs of the apartment association. It refers to a local/private law made by an organisation for its own government. The role of by-laws: Each apartment association will have an apartment bye- law which contains certain details like the name of the association, the address, the date of formation, jurisdiction aspects and so on. The bye-laws contain various particulars which relate to the business hours of the association along with the objects and activities of the association. The importance of by-laws: Bye-laws are required by the managing committee of an Apartment Owners Association (or Residents Welfare Association) to ensure proper maintenance of the apartment complex and to resolve the issues that the residents face in a timely and effective manner. Solving the issues is not easy. It is quite a difficult task to convince the society to agree to the chosen rules and regulations. All of the related issues are solved through a set of rules known as the bye-laws. Every apartment complex adopts the bye-laws from the moment it is registered. The bye-laws govern the day-to-day functioning of the apartment complex and it is considered as the constitution of an apartment complex. An apartment by-law will include: An apartment owners association can be registered under the society act or a Flat Owners Act. An apartment association must consist of at least 10 people, over 18 years of age. All the owners are obliged to pay monthly assessments imposed by the association and abide by the rules of conduct. The registration of an association involves the drafting of memorandum and bye-laws. The memorandum shall contain the name of the association and the objects of the association apart from the names, addresses and occupations of the members of the committee which is the governing body. The names of persons or officers who can sue or be sued on behalf of the association. Particulars of the person or officer who can give directions with regard to the business of the association. It is mandatory that the bye-laws should have details about the enrollment of members, qualification for membership, restrictions and other conditions along with the entrance fee. The deadline date for the payments and the fee. A list of delayed payments and penalties. Rules about eviction of members and the circumstances under which members can be evicted along with the particulars of rights, obligations and privileges of the members. The bye-laws should have the particulars relating to the manner in which the business of the association has to be carried out. A list of qualifications of members to hold office, the term and other conditions for appointment/reappointment should be mentioned. Every apartment owners association shall make own bye-laws at its first meeting for the administration of the affairs in relation to the apartments and the property relating thereto. People who have purchased apartments and executed a deed of apartment shall automatically be the members of the association and will pay the membership fee. Each apartment owner shall receive a copy of the bye-laws. The affairs of the association shall be governed by a board and elected by the members by simple majority in the general body meeting. The principal office bearer of the association shall be a President, a Vice-President, a Secretary and a Treasurer, all of whom shall be elected by and from the board. The board may appoint an Assistant Secretary and an Assistant Treasurer. One third of the members of the board retire annually. The office bearers shall hold office until their successors have been elected and hold their first meeting. The first meeting of a newly elected board shall be held within ten days of election. The administration of every property shall be governed by bye-laws, a true copy of which shall be annexed to the declaration. How can one make a model By-law? Make a draft or model bye-law for the association. Getting it approved from the general body. Proceed for the registration of the association. On successful registration of association bye-law becomes effective for association. Why does an apartment association need a by-law? The primary responsibility of the managing committee is to ensure proper maintenance of the apartment complex and to resolve related issues which residents face. Convincing the members to act in the interest of the society is no less a challenge either as almost every resident is aware of their rights but few accept their responsibilities. They are needed for the smooth functioning of a society and many consider them to be the constitution of an apartment complex. They are critical for the efficient working of a society and are mandatory for an Apartment Complex Association. Amending by-laws: Bye-laws may be amended by the association in a duly constituted meeting. An amended bye- law will be effective if it is approved by the owners representing at least two-third of the total number of units in the building. A modified or an amended bye-law shall be valid only if an amendment to the declaration is made. Procedure for amending a by-law: Conduct a general meeting on an annual basis. A resolution will be passed by a majority of the 3/4th of the members who are present. The two-third of members should not be less than one-third of the total members in the society. Every change in the memorandum of the association as approved shall be filed with the registrar within 30 days. Such change shall not have effect until it has been registered. The committee should also submit four copies of the existing bye-laws along with the resolutions passed by the annual general meeting. The registrar will register the amendment upon satisfaction that the amendment does not contravene any act or rules that guide the functioning of a co-operative society. The Registrar will issue a certificate of registration along with the certified copy of the amendment. By-laws for keeping pets According to the Constitution of India, an apartment should not ban the keeping of animals in an apartment, with Section 11 (3) mentioning about the Prevention of Cruelty to Animal Act, 1960. It is also against article 51 A (g) of the Indian Constitution wherein, it is the duty of every citizen to have compassion towards animals, living creatures and improve the natural environment.