Peace in the High Rise

 

Life in a high-rise condominium type of apartment complex is not the preference of an ordinary Malayali.   When land became dearer in cities and small towns, community living turned inevitable.  Traditional beliefs and customs gave way to the new life style, and it has also opened the pandora's box of conflicts.   The predominant reason for such conflicts is the failure to implement the law relating to formation of the condominiums and its management.

A condominium refers to an apartment building, in which each apartment is owned separately by the people living in it, but also containing shared areas. The shared areas are known as common areas.  Kerala Apartment Ownership Act 1984, was enacted for the formation of condominiums and its management.  However, not even a single condominium was formed under it, and the management of the existing apartment buildings are done by legal entities formed under the general charitable purpose statutes applicable to the erstwhile Travancore Cochin and Malabar Areas.  Evidently, they were not intended for common area management in apartment buildings.

Condominium is an alternative to co-operative type of housing properties, where a society is the owner of the apartment building, while the occupier of a unit may be a member of the society holding an equity.  The member does not have proprietary rights either in the unit or the common areas.  Maharashtra is one state, where both types of properties  are prevalent and had regulatory mechanisms put in place from the early 70s of the last century.  The Registrar of Co operative societies of an area, is the common regulator for both, having extensive powers and functions.  And Kerala, like many other states, was adapting their Apartment Ownership law.

There are a few significant defects in the 1984 enactment.  (1)  The powers and functions of the competent authority, who is supposed to be the regulator, are not included there. This might have occurred because the lawmakers failed to refer to the relevant maharashtra law constituting the powers of the common competent authority of both types of properties. (2)  There is no clarity as to when, the management association is formed whether after the entire condominium formation or after the first set of declarations are registered, and (3) the cumbersome procedure for registration prescribed.  After the central enactment of RERA, this law definitely requires a relook.

There was gross neglect on the part of the authorities, in implementing the law.  The rules were notified ten years after the Act, and the competent authorities were appointed more than twenty five years, thereafter.  Even then the books in which the documents are to be registered were not made available in the sub registrars offices.  It is therefore not surprising that this law is not implemented even today, after thirty-seven years.  Some of the promoters, who acted fraudulently converting the common areas into private areas, were the indirect beneficiaries of these defects and defaults.

Once the RERA Authority, with significant powers to regulate this sector took over the scene, the situation has considerably improved.   Under RERA, formation of the allottees associations is an obligation of the promoter, similarly each allottee is bound to join such associations, and the failure would invite penal consequences.   Hence, in the post RERA scenario, the defects in the statute may not be an important legal hurdle in the formation of condominiums and its management.

Even otherwise, the 1984 Act contemplates only one declaration, where the single owner or all the owners may execute and register in the local sub registrar office. The common areas and facilities are declared and to prove the same, the floor plans of the apartment building are produced with it.  A byelaw will also be registered along with the declaration to regulate the management of common areas.  There is sufficient indication in the 1984 Act itself, that the formation of the management association  is complete at this stage itself.    The competent authority is then bound to issue a certificate indicating the name of the association and a unique identity number.  This certificate would be a sufficient proof of the existence of a legal entity, and the association can commence its operations.    The registration of the deed of apartment by the individual owners for completion of the formation of the condominium, can follow,  where the officials of the Association are competent to collect the same and forward it for registration.

In any condominium, the title of the private unit should be with the unit owner and the common area under the control of the condominium management association.  The RERA Act moves a step forward by requiring the promoter to transfer the title of the common areas to the association of allottees.  Therefore, the charitable association, currently prevalent, with no right over the common areas is obviously outside the scheme of things, especially when the individual unit owner possesses proportionate rights over the common areas.  In this scenario, even the unanimous collective decisions of the association cannot be enforced against an individual.  Obviously, no actions could be taken against defaulting and violating members.

The 1984 Act was enacted with a noble objective of making the individual apartment in a building heritable and transferable property.  The nature of the right of a unit owner in the apartment building would be an absolute right over an apartment and undivided right over the land and building.  It would be really weird to realise that each unit owner would have undivided right over each part of the building, even when one claims that the apartment is his private property.  Therefore the application of the Act, to separate the private areas from common areas and to make the individual apartment heritable and transferable property would become a dire necessity.

The separation of the common areas and private areas by the registration of the declaration and deed of apartments, under the Act, is an essential legal requirement. As the proportionate right over the common areas of each unit owner is specified in the declaration, the promoter or any one else cannot later encroach upon the common areas.  This registered documentation would be helpful to identify the respective rights of the unit owners in the apartment building, which may again be useful, while considering reconstruction of the building.   All sums assessed by the management association, but unpaid for the share of the common expenses chargeable to any apartment, shall have priority over all other charges, except the government dues or any mortgage over the apartment. The management association can take effective actions against defaulting and defying members, which could include them from using the common facilities.  Some minor changes in the 1984 Act, will make the law more efficient and can bring peace and tranquility in the high rise.