‘Why did the twin tower fall’ – A review of the Condominium management laws in the Country
On 28th August 2022, the Noida twin tower
named Apex and Ceyna were reduced into absolute nothing except for about
55000 tons of debris, following its demolition.
Apex and Ceyna housed 900 apartment units, with a construction cost, estimated
at 90 crores and market price of 700 crores, approximately. The demolition followed a judgement of the
Apex Court.
The Supreme Court[i]
has cited three major reasons for arriving at its conclusions for demolition of
the twin tower, namely (1) Violation of the distance requirements under the
building regulations, (2) Consent of the Resident Welfare Association (RWA) not obtained before the construction, and (3) Collusion and illegal Construction. This Article focuses only on the second reason, ‘Failure
to obtain Consent of RWA’.
The Apex Court found the consent
of the individual flat owners of the original fifteen towers, individually or
through the Resident Welfare Association (RWA), was a necessary requirement
under the UP Apartments Act 2010 and UP 1975 Act before Tower No.-16 (Apex) and
Tower No-17 (Ceyna) could have been
constructed, since they necessarily reduced the undivided interest of the
individual flat owners in the common area by adding new flats and increasing
the number of apartments from 650 to 1500.
A study of 1975 and 2010 enactments of Uttar Pradesh, is also the story of the Condominium management laws in the Country. Such local laws received more attention, when the Real Estate (Regulation and Development) 2016 (RERA) came into force. There is a general feeling that the condominium management methods put forward by such local laws is far more better RERA.
What is a legal condominium and
how is it constructed?
A Condominium[ii]
means an apartment building in which each apartment is owned separately by the
people living in it, but also containing shared areas. The construction of a legal condominium will not be
complete by building its superstructure, but it either requires the application of either the
provisions of the RERA Act or the Condominium Management Laws.
Construction of the Legal
Condominium under RERA
RERA, primarily operates by
creating obligations upon various stake holders, namely Promoter, Allottee,
Real Estate Agents etc. The Promoter is obligated to form an Association of
Allottee, which could either be a Society or Co-operative Society, under the law applicable[iii]. Further, the Promoter has to convey the title
of the undivided proportionate title in the common areas to the Association,
through a registered conveyance deed, while the private apartment is
transferred to the respective allottee[iv]. Moreover, they are obligated to hand over
physical possession along with the necessary documents[v],
to the allottee and the Association of Allottee, as the case may be. These processes are sufficient enough for
completing the legal condominiums, however, the transfer of undivided common
properties to the Association of Allottees, is not generally acceptable to the home buyers, for they are divested with title over the common properties. The application of the Condominium Management Laws, could offer better relief to the home buyers.
The Condominium Management Laws and their application
The Utter Pradesh Ownership of Flats Act 1975, Maharashtra Apartment Ownership Act 1970 and the Kerala Apartment Ownership Act 1983 appears to have a common origin, as most of these provisions are identical. The UP went for a total repeal, while in Maharashtra, it underwent several amendments, while in kerala there was neither any amendments nor were it implemented, either.
Let us examine the preamble and the provision for the application of the statute, in an attempt to understand the purpose of these local Condominium Management Laws . The preamble[vi] reads as follows:
An Act to provide for the
ownership of individual apartment in a building and to make such apartment
heritable and transferable property.
Section 2 Application of the Act[vii]
This Act applies only to
property, the sole owner or all of the owners of which submit the same to the
provisions of this Act by duly executing and registering a declaration as
hereinafter provided:
Provided that no property shall
be submitted to the provisions of this Act, unless it is mainly used or
proposed to be used, for residential purposes.
Even though, these statutes were enacted with
salutary objectives, most of the promoters as the 'sole owner' refused to execute
and register the requisite declaration, for the application of the law. Once the conveyance deeds are executed, in favor of the apartment owners, and they became the title owners of the proportionate
undivided common areas of the property, the second part of the provision, which
required 'all the owners;, would practically
become impossible.
The ideal mechanism for construction of legal
condominiums:
The Condominium Management Laws
required the Owner of the property (either the promoter or the apartment
owners) to execute a declaration in the prescribed form, describing the private
areas and the common properties of the apartment building. Each Apartment Owner has to execute a deed of
apartment in the prescribed form, immediately before the execution of sale deed
by the Promoter/Builder or their joint venture partner owning land, in his
favor. A byelaw approved by all the
apartment owners has to be annexed along with such declaration be submitted
before the Competent Authority. Thereupon,
the Association of Allottees/Owners become functional
The legal consequence of the
construction of this legal condominium, is that the individual apartment owner
would gain exclusive ownership over his common properties and the association
of owners get the right to manage the common areas and facilities, described in
the declaration, in accordance with the byelaws. The benefit of applying this law is that the
apartment owners can retain their proportional title in the common areas, and get over the harsher mandate provided in RERA.
The Society of Construction Law (Kerala) and its study
on condominium Management
Society of Construction Law (Kerala) is
a not-for-profit organization, working with the objective of promoting
education, study and research in the field of Construction Law, relevant to the
infrastructure and construction industry.
It is affiliated to the India Branch of the Society of Construction Law.
The Society, constituted a sub-committee by including various stake holders of the condominium properties, to study
about its management in Kerala. The conclusions that were arrived may be sufficient to disturb the peace of the home-owners in the high-rise buildings, a few of which are are enumerated below:
● The
common property management under the Condominium Management Laws is far better than what is proposed by the RERA, since the apartment owners could continue to enjoy undivided title in the
common properties.
● The Condominium Management Laws are not applied in the State of Kerala, for want of
necessary regulatory mechanism, incorporated in it.
● The
majority of the associations of Apartment Owners are registered under the
general laws for registering charitable societies. Such associations, does not have any manner of right
over the common areas.
● The
nature of right transferred to the apartment owner is as provided under Section
44 of the Transfer of Property Act, and the apartment owners cannot claim exclusive
ownership and possession over the individual apartments in the buildings.
● The
nature of right of the apartment owners, would be in the nature of right
described in Section 14(2)[viii],
which reads as follows
○
“…the property shall be deemed to be
owned in common by the apartment owners, and the undivided interest in the
property owned in common shall appertain to each apartment owner shall be the
percentage of undivided interest …owned by such owned in the common areas and
facilities.”
● Re-construction
of the building, after 80 to 100 years, is likely to be difficult or may even be
impossible for want of sufficient data regarding right of the apartment owners
over the common areas, since declarations are not executed and registered.
● The huge bad debts faced by the owners’
associations is attributable to the non-application of the condominium
management laws.
●
The possible remedy lies in the amendment
of the apartment management laws by incorporating provision for sufficient
regulatory mechanism as was done in Telangana and Uttar Pradesh and also by
bringing it within the scope of the local RERA Authorities.
The
seminar on Apartment Managing laws in Kerala
The
Society of Construction Law (Kerala Chapter) proposes to bring to table all the
stakeholders of condominium properties like Apartment Owners and
representatives of the Apartment Owners Association, Builders and Promoters of Condominium
Properties in a seminar.
The
Seminar will be inaugurated by Mr Justice P Gopinath, Judge High Court
of Kerala. Mr M.R. Rajendran Nair,
Senior Advocate, will moderate the panel discussion, while Mr M.P. Mathews
Member, RERA Authority, Mr Cherian John, Managing Director, Hillife Builders, Thrissur, Governing Council and Legal Committee Member of Credai, Kerala, Commander Mr. Dean Mathew (Retd), Secretary, Tritvam Apartment Owners
Association Ernakulam, and other stake holders will participate in the panel
discussion.
Topic of Seminar : “Review
of the Kerala Apartment Ownership Act
1983”
Date and Time : 11th February 2023 10 AM.
Place : MKD
Hall, KHCCA Golden Jubilee Chamber
Complex,
Ground Floor, Kerala High Court Premises, Ernakulam.
[i] Supertech Limited Vs. Emerald Court
Owner Resident Welfare Association and Others 2021 (10) SCC 1
[ii] https://dictionary.cambridge.org/dictionary/english/condominium
[iii]
Section 11 (4)(e) of the Real
Estate (Regulation and Development Act 2016
[iv] Section 17 (1) of the Real Estate
(Regulation and Development Act 2016
[v] Section 17 (1) and (2) of the Real
Estate (Regulation and Development Act 2016
[vi] Preamble of Apartment Ownership Laws
in Utter Pradesh, Maharashtra and Kerala
[vii] Section 2 of the Kerala Apartment
Ownership Act 1983.
[viii]
Kerala Apartment Ownership Act
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