Track the Financial Management of the Apartment’s Association
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Track the Financial Management of the Apartment’s Association

Comments(11) Sub Category:Community Living Posted On: Apr 23, 2012

The residents of an apartment society pay a big chunk of their monthly salary as the maintenance charges. This certainly brings in the question that “whom do we pay this maintenance charges and for what?”
All the Apartment’s owners, either residing or non residing holds an undivided ownership of all the common areas and amenities. So, the answer to the above asked question is quite simple that we pay the maintenance charges to the Apartment’s Association who is responsible for the maintenance of the common areas and the common facilities.
Now the next and the important question is “Is it possible to track the financial records of the association?”  The answer to this is yes. But to do that you need to understand who handles the finance, how does an association works and the different sources of income to an association.

Different Sources of Income to the Association:
Transfer fee
A member of the association has to pay transfer charges, in case he transfers his rights, share and interest in the property to some other person. The amount of the transfer fee is fixed and is decided by the association in a general body meeting. Generally this amount does not exceed Rs. 25000/-.
Rent from the advertisement hoarding:
Any type of advertisement hoarding in the premises of the apartments is chargeable and before putting any hoarding of such type one needs to take permission from the apartments association. The rental earned from the any form of advertisement say hoarding, display or workshop goes directly in the account of the apartments association.
Rent from the cable or mobile towers:
Due to increasing density and scarcity of open land, the terrace of an apartment society is well suited for the installation of the cable or mobile towers. One has to seek the permission before installing any cable or mobile tower in the premises of an apartment’s society and is chargeable by the Apartments Association.
Rent for the open spaces and terrace:
The open spaces, hall at club house and the terrace of an apartment can be put on rent to the residents or non residents by the apartments association. the rental is decided by the Apartments Association and there is always a different in the rental rates for the owners and the outsiders.
Rent from Parking and Shop:
If there are some booths or the sops in the premises of the apartment society, then they could be put on rent by the Apartments Association. The rental earned from these commercial activities directly goes in the account of the Apartments Association. The parking slots are also rented by the Apartment’s Association and the rent directly goes in their account.
Interest on investments:
Housing societies have excess funds with them which could be used in a sudden emergency repairing. If a housing society wants than it can invest these funds in a co-operative bank or any other institution in order to earn interest.
These above mentioned are some income sources of Apartment’s Association other than maintenance charges.

Working of an association:

  • The association passes the budget and forms the basic guidelines of the financial expenditure.
  • The treasurer has the power to operate the bank accounts jointly with the president/secretary. It is the duty of the treasure or the secretary that all the transfers made for the authorized purpose of the association should be updated in the accounts book and the account book must be duly signed by the authorized person. It is the duty of the association to provide a copy of the monthly accounts in the office of the registrar for the resident’s reference.
  • The association can appoint an accountant to keep a track of all the payments to be made and received in order to maintain the accounts properly.
  • It is the duty of the treasurer to maintain enough cash to meet all the needs of maintenance and payments to be made to the services.

Keep an Eye on the Accounts:
Refer to the copy available at registrar’s office:To maintain the transparency, it is the duty of the association to provide a copy of the accounts book at the office of registrar. Every resident has the right to refer the copy of the account book and demand an answer if he is not satisfied. But since this procedure is manual it has its own limitations which demands effort in data collections and delay in taking any action.
Use of apartment management software: The use of AMS has made many things easy and brought transparency in the working of the association. The apartment management software like CommonFloor.com provides a gateway to make your maintenance charges online and can refer the accounts sheet online. Moreover this software also provides a provision of start a discussion in which you can immediately start a discussion and inform other residents if you find anything not in place, simply by sending an email.
So, keeping the track of the financial management of the association does not need much of your efforts now days you can simply get all the details with a click.

Also Read

Role of Apartment Owners Association in Apartment Handover from Builder

Investment option for Apartment Owners Association

Income Tax and Rebate for Apartment Owners Association

Guide to Apartment Owners Association: Formation and Functioning

 

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    11 Responses to “Track the Financial Management of the Apartment’s Association”

    1. Shirsendu says:
      April 23, 2012 at 11:19 pm

      The information provided in this article are very much helpful to all association members..

      Reply
    2. Prasant Saxena says:
      April 24, 2012 at 12:18 am

      I am also part of owner’s association in our apartment and I can understand how difficult it is to manage the financial part of the project.. The sources provided are very systematic and up to date.. Very informative post..

      Reply
    3. Ravindra Singh says:
      April 24, 2012 at 4:20 am

      Well written article and very informative indeed..

      Reply
    4. Things to Know Before Buying a Property says:
      April 24, 2012 at 7:03 am

      [...] desires to own a property and be independent. Buying a property in India  has an emotional and a financial aspect and an important phase in everyone’s life. Before you buy a property, you should be aware of [...]

      Reply
    5. Saran says:
      April 24, 2012 at 7:23 am

      Different Sources of Income to the Association mentioned in the above article are very informative and well researched…

      Reply
    6. Guide for Buying Life Insurance says:
      April 30, 2012 at 12:58 am

      [...] of the most vital parts of financial planning is Insurance. It is not an easy task to understand the concepts of life insurance as one need to be [...]

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    7. Om Prakash says:
      May 15, 2012 at 7:28 am

      Very informative and useful article. Keep on sharing such tips with the owners to help them run the associations effectively and for better up-keep of the appartments common areas.

      Reply
    8. shanti rajagopal says:
      May 22, 2012 at 4:23 am

      dear all,

      please advise if the lodha bldgs. are insured for catastrophic risks and whether an All Risk policy is in place.
      are the activities of Owners Assocation insured, i.e. the Management and execution of various activities, the financial management.

      my old parents stay in Alexandria while we stay out but was curious about the insurance arrangements.

      regards
      shanthi

      Reply
    9. Dattatri says:
      May 25, 2012 at 9:03 am

      I am very much happy that I see a movement in this layout association. I see also the interest in the members are increasing day by day. The association office bearers and members together should make the benifit of this. We can make it.
      BR
      Dattatri

      Reply
    10. Why should an apartment association be registered? says:
      July 20, 2012 at 7:16 am

      [...] Due to the paperwork and initiative issues most of the apartments prefer staying unregistered. An unregistered apartment association can cause adverse effects to the [...]

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    11. Why is healthy communication required in an apartment society? says:
      September 3, 2012 at 5:43 am

      [...] Track the Financial Management of the Apartment’s Association [...]

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