Guide to Apartment Owners Association: Formation and Functioning

Today apartment owners association is vital part of a community living. Apartment owners association is association where all owners of the apartment are members and association maintains facilities or amenities available in apartment. Apartment owners association works for welfare of residents in apartment, conduct events or awareness program and protects the right of apartment owners. Apartment owners association may or may not be registered but registered association can sue or defend any legal action and enjoy legal benefits.

Apartment owners association is not only have right to maintain facilities available in apartment but also legal powers to protect its members and defend legal action raised against association.

Apartment Owners Association as Arbitrator

Arbitration is a technique of resolution of disputes among members of association or residents in apartment. There may be internal matters in apartment or apartment owners association which may end in dispute or approaching court. In this case, apartment owners association can act as arbitrator between members or residents in apartment and association can help to solve disputes outside the court. Approaching court is not always recommended as it may take months or even years for resolution of dispute. Association can either hire a legal advisor or appoint an advocate for affairs of association.

Power to Recover the Maintenance Fee

Provisions are made in the by-laws of the association for collecting the maintenance charges. The builders allow the apartment owners to form their own association and fix the charges. The cost of maintaining the amenities needs to be shared by the apartment owners and residents in apartment. There exists a convenient misconception among residents that the price they pay for the apartment is all-inclusive. Maintenance is a fee charged for services and maintenance of equipment.



In most association meetings, the issue of maintenance charges is often debated in overstretched sessions. The maintenance charges are calculated either on the basis of provisions made in the bye-laws of the association or on the basis of method agreed by majority of members of apartment owners association. Acceptance of maintenance charges can at least help maintain peace and harmony. In the event of default by any member, the apartment owners association has right to charge interest and penalty from the defaulter and the power to recover this amount. The apartment owners association has right to sue defaulting members but the apartment owners association cannot cut or terminate any facility enjoyed by the owner. The apartment owners association can only initiate legal proceedings for recovery of the outstanding and can seek other relief as may be permissible under the law.

Legal action against members guilty of offense

Apartment owners association consist general body consisting of all the members of association who are owners of apartment complex. General body elects members by and from general body as Management committee. Management committee represents association before all official and non-official bodies concerning building and other member’s rights and interests. Any members in apartment owners association, who steal, forge or make any loss to association shall be liable to be punished and association has right to take legal action against the members guilty of offence.

File case against Builder

Today demand for residential property is increasing and number of builders who come up with attractive price also increasing. There are number of property buyers who often complaints that their builder has cheated by offering low quality work, not responding for property buyers query and fails to keep their promise. Apartment owners association can file case against builder for compensation of losses, lodge police case and even file criminal case against builder.

• Notice to builder: It is always recommended to issue notice to builder before approaching the court or taking any legal action. Apartment owners association can issue notice to builder for delay in project, compensation of losses and in case of poor quality construction. Send the notice by registered post or Under Postal certificate. Retain the proof of sending.

• Lodge Police case: If builder fails to respond the notice, apartment owners association can lodge police complaint against builder. The police authorities to begin with call upon the parties to remain physically present at the Police Station. The Police authorities invoke Section 107 (Security for keeping the peace in other cases) of the Code of Criminal Procedure, 1973. Proceedings under this section may be taken before any executive magistrate.

• Consumer Case: It is observed that that the builders do not comply with their statutory obligations. In such circumstances the options available to the flat purchasers / society include filing a complaint in the Consumer Court. Apartment owners association can file single case against builder on behalf of all its members as consumers having the same problem. Write your complaint with preferably date-wise facts. Refer to the page numbers of the attached documents where ever required (like bill, agreement, service report, etc). Mention what relief you are looking for against your complaint. You can either file your case in direct or send registered post.

• Criminal case: A builder can be sued for cheating, breach of contract, not responding the grievance and delivery of poor quality construction. While drafting the criminal complaint, the Society should high-light specifically the violation of the various provisions. The Society should also emphasize that violation of the provisions is criminal in nature. Attention of the criminal court should be drawn to offenses of various sections of Indian Penal Code – Sections 406, 407 read with sections 415 and 420.

• Section 406 Punishment for criminal breach of trust
• Section 407 Criminal breach of trust by carrier, etc
• Section 415 Cheating
• Section 420 Cheating and dishonestly inducing delivery of property

The complainant should also bring out irregularities committed by the builders while executing the constructions of the building. Once a complaint is lodged, the matter is kept for verification wherein the statement of the Complainant is taken. On the basis of the evidences either of the both the parties Honorable Metropolitan Magistrate’s Court office passes proper order. Builder has to prefer an appeal in the Sessions Court. In the event the accused is aggrieved by the order as passed by Sessions Court then in that circumstances either of the parties can approach High Court.

Apartment owners association can be sued by members or parties if association fails to meet its statutory obligation. A well-drafted bye-law should enable any flat owner to raise issues and mandatory require the managing (or executive) committee to address these issues in one form or the other. The common problems complained of by many flat owners pertain to the association to be unresponsive to their concerns. Some find that the association is actively working against their interests. The member of apartment owners association has right to raise the issue and demand the meeting for the same. If the association still fails to take action, then, member can, as a last resort, approach the courts for relief. If an association persistently commits default in fulfilling its statutory obligations or if there are huge disputes over the management of the association the member can consider complaining to the concerned Registrar of Societies in this behalf. The registrar has right to cancel registration of the apartment owners association which fails to meet statutory obligation and there are huge disputes over the management of the association.

References:

How to register Apartment Owners Association
Methods to Calculate Maintenance in Apartments

Tags: apartment owner association, apartment owners association, filing a case against property builder, flat owners association, legal action against builder, Resident welfare association, RWA