Peace in the High Rise - FAQ

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The Article ‘Peace in the High Rise’[1] has received an overwhelming response.  A discussion an encouraged regarding the futility of the current common area management associations formed under the Travancore Cochin Literary Scientific and Charitable Societies Act 1955, in the light of the provisions under the Real Estate Regulation and Development Act 2016.  Hence was deemed appropriate to prepare a FAQ (Frequently Asked Question), to get some inputs regarding the nature of association of apartment owners in a multi-flat building for management of common areas.

Frequently Asked Question

 

1.    What are the forms of ‘association of apartment owners’ that could be formed for the management of common areas of an multi-flat building?

●      A society, cooperative society or an association under the KAOA[2].

○      Whatever be the form of association, it should have the right over the common area, for its efficient management.

○      In case, the association does not have such right over the common areas, it will not be able to enforce its decisions over the owners, even though they may be its members.

 

2.   What is the nature of right that an apartment owner in a multi-flat building, should ideally possess?

 

·       The exclusive ownership and possession of the apartment, and common rights over common areas of the building, along with other apartment owners

3.    What is the nature of right that a society or cooperative society possesses in the common areas of a multi-flat building?

·       Exclusive title and possession over the proportionate common areas[3].

 

4.    What is the nature of right that an Association under the KAOA, enjoys?

●      An Association under the KAOA, will have the right to manage the common areas, declared in Form A[4] in accordance with the byelaw[5] filed with the Competent Authority.

 

○      Unlike in the case of the society or a cooperative society, the apartment owner will continue to enjoy the undivided right over the common areas along with other apartment owners, which the Association will have the right to manage the common areas, in accordance with the byelaws and the provision of the Act and the Rules.

5.     Whether it is possible to form a society or a cooperative society, after the undivided rights have already been transferred by the promoter to the allottees/apartment owners?

●      It is possible to form a society or a cooperative society, however the individual apartment owner, who currently holds proportionate undivided right over the common areas, may have to transfer such right through a proper conveyance.

 

○      Registration of multiple conveyances and payment of stamp duty and registration charges cannot be avoided. 

6.     What is the procedure for the formation of an association under the KAOA?

          Stage I

●      A declaration has to be executed and registered under the Registration Act 1908 by the sole owner (promoter/builder) or all the owners (Apartment Owners) of the property in which the apartment complex is situated.

●      Along with the declaration, the floor plans of the apartment and the title deeds of the property need to be annexed and registered.

Stage II

●      The approved byelaw has to be annexed along with the registered declaration and annexures and filed with the component authority, who shall issue a unique reference number for the association. 

●      At this stage the competent authority may issue a certificate, with which the association shall start functioning and manage the declared common areas of the apartment complex.

Stage II

●      The apartment owners shall execute and register the Deed of Apartment in Form B.  In the Deed of Apartment, the apartment owner shall indicate the details regarding his individual apartments, the registration details of the declaration and also the unique reference number issued by the competent authority to the Association.

7.     Whether the physical presence of all the apartment owners is necessary for execution and registration of the Declaration and Deed of Apartments.

 

·       No, their physical presence may not be necessary, however, the attested declaration and deed of apartments can be forwarded by the secretary of the managing committee of the association to the local sub registrar office[6],  ·  

         

8.     Whether it is necessary that all the apartment owners need to execute and register individual declarations?

●      No, it is not necessary. The promoter who as the sole owner of the property, can file a single declaration.  Then the apartment owner needs to execute and register the deed of apartment alone.  This process can be completed while the conveyance is executed and registered by the promoter, while the individual apartments are conveyed.

 

●      If the promoter has not filed a declaration and has transferred the propionate common area to the individual apartment owner, then each apartment owner will have to execute and register individual declarations and deed of apartments

9.     What is the benefit for the apartment owner by forming the association under the KAOA?

●      The application of the provisions of KAOA makes the ownership of individual apartment in a building, heritable and transferable property[7]

●      The act enables the individual apartment owner to enjoy absolute right over the private apartment and could enjoy common rights over common areas along with others.

 

●      KAOA ensures prompt recovery of common area maintenance and avoids bad debts.

10. What are the procedures contemplated under KAOA for recovery of unpaid share of common expenses by the apartment owner?

●      The unpaid share of common expenses shall constitute a charge on the apartment of the defaulting member and the said charge shall have priority over all other charges except only the charge if any for payment of taxes due to the government or a local authority and all sums on a first mortgage on the apartment[8].

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●      On the sale of the apartment, the purchaser of the apartment shall be jointly and severally liable along with the vendor for all unpaid assessment against him for his share of common expenses up to the time of the sale. However, the purchaser will have the right to recover the amount from his vendor, the amount that the purchaser has paid. 

11. Who is liable to pay the maintenance charges in case of unsold apartments?

          The promoter/builder

12. What is the status of a society, for instance formed under the Travancore Cochin Literary Scientific and Charitable Societies Act, without a conveyance from the promoter with respect to the common areas?

●      Such associations will not be able to enforce its decisions.

●      They cannot prevent a defaulting apartment owner who is having undivided right over the property, from using the common facilities maintained by using the funds of prompt payers

●      Separate civil suits will have to be filed for recovery of dues.  Most of the time it will not be a effective remedy, due to delay and expenses of the litigation.

 


[1] https://advjohnsongomez.blogspot.com/2021/05/peace-in-high-rise.html

[2] KAOA means Kerala Apartment Ownership Act 1983

[3] Read Section 17 of the RERA Act 2016

[4] Form A, is the prescribed form for making a declaration under Section 5(2) of KAOA 1983 and

[5] Byelaw referred under Section 16 of KAOA 1983.

[6] Read Section 13(6) of the KAOA 1983

[7] Read the Preamble of the KAOA 1983.

[8] Read Section 19 of KAOA 1983

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