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ApnaComplex
December 18, 2010

Karnataka Apartment Owners Act Part Two – Contents Of Declarations And Deeds Of Apartments

While registering your apartment under the Karnataka Apartment Owners Act, you will need to be aware of the contents of the deeds and declarations involved, as this is necessary.

Not many people these days take the effort to know what works in the legal section of obtaining an apartment while registering their building under the Karnataka Apartment Owners Act, and this is not a very good sign. Having good knowledge on the legal proceedings can help you immensely in communicating effectively to your lawyer.

Learning legal information is not rocket science, as you will find out through the course of this post, as very basic facts and figures are involved.

The content that an apartment’s deed and declaration will hold has been given below.

Karnataka Apartment Owners Act Details – Declaration Contents

The declaration will hold many particulars, and the most important of these is the land description. The nature of the land involved will be given in a detailed manner (that is, whether the land falls leasehold or freehold categories).
A detailed description of the building will follow, stating the number of basements and storeys in the particular building. The number of apartments involved will also be mentioned, and the basic materials used to build the structure will be specified.
Details will also extensively include the apartment number of each apartment that falls under the span of the building, the number of rooms present in each apartment and the dimensions of the same, and also the common areas that the apartment has access to. This is used for identification purposes.
The value of each apartment is also mentioned in the Declaration, and the overall value of the property and the percentage of interest (undivided) that each resident will bear for access to the common areas in the apartment complex will also be mentioned.
A set of bye laws will also be attached with the Declaration during registration. In simple terms, these bye laws are more targeted at apartment associations and they will involve procedures for appointing people into the upper tier of the apartment association.
The Declaration will also contain the name of the person that the entire registration process in carried out under. All personal details including the residential address, the contact details and occupation will be specified.

These are the basic details that will be included in a Declaration, under the Karnataka Apartment Owners Act.

Karnataka Apartment Owners Act Details – Deed Contents

The Deeds will contain more or less the same content as given in a declaration, including a description of the land that the apartment complex or building is set in.
The Deeds will also contain information that can be used to establish the identity of the particular apartment, including the apartment number as stated in the declaration.
The Deeds will contain the percentage of interest (undivided) pertaining to the common areas in the apartment.

These are the basic details involved in a Deed under the Karnataka Apartment Owners Act. Any real estate lawyer will be able to smoothly take you through the procedures involved without any issues.

This article aims at collating and providing information for benefit of ApnaComplex customers and blog readers. While ApnaComplex has taken every care to ensure the information is accurate, we suggest to please use it only as a guidance for further discussion and action with help of relevant professionals. If you need professional advise on this topic and any other property related matters, please send your request through our contact us form. You may post your questions/inputs in the Comments section below and we will try and get them answered through relevant subject matter experts.

ApnaComplex
December 17, 2010

Karnataka Apartment Owners Act Part One – Apartment Association And Registration of Deeds, Declarations

In order to buy your own apartment and become a member of the apartment association, there are a few steps and legal processes that you’ll need to know about.

The Need

It’s wise to be well versed in all the legalities involved while buying an apartment in the state of Karnataka. Although a real estate lawyer can take care of the half the issues in this regard for you, being aware of your rights and your position in the entire setting can help you make better and faster decisions. There are many deeds and declarations that you will have to go through while buying an apartment in a city like Bangalore.

Talking to the members of your apartment association can help you get a clear idea. Senior members of the apartment association will guide you through the legalities involved.

The Karnataka Apartment Owners Act 1972

This act deals exclusively with apartments that are residential in nature. Apartments are termed as transferable properties that are also heritable under this act. In order to register the apartment complex under this act, all apartment owners will need to come together and sign the particulars, which can be quite an ordeal.

Know your State Rules

The Registration Procedure:

Given below are a few facets that you’ll need to know while getting your apartment registered under the Karnataka Government:

The Declaration should be registered properly under the Registration Act of 1908.
The deeds involved with the house will also need to be registered with the Registration Act of 1908.
The floor plan of the particular building should also be duly registered under the Registration Act of 1908.
Along with the registration of the building’s Declaration, extensive details about the building should also be filed along. These details should include the building’s layout, the location of the building, and the number of the particular apartment. The apartment’s dimensions will also have to be accurately mentioned in the details. This is very important.
The building’s name should also be specified in the details provided. If the particular building has no specific name, it should be mentioned that the building does not have a name.
All these above mentioned details should be properly verified by an architect, who will need to release a statement mentioning that the specified details are correct.
This statement should then be run through some local authorities under whose jurisdiction the particular building falls, who will, in turn, verify the same and approve it.
If the submitted plans do not include the verified seal of a practicing architect, then the plans should have an amendment attached to them when they are submitted. This amendment should certify that the floor plan mentioned in the documents, the name of the house specified and the dimensions of the building are all accurate and true. This is also very important.
The registrar or sub registrar will then register the declaration and deeds involved under the Karnataka Government through an act that was made effective in 1908.

This is the general registration procedure involved in registering an apartment and the apartment association under the Karnataka Government.

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ApnaComplex
December 16, 2010

Apartment Association Terms Explained – Part Two

Apart from the basic terms, there are many other terms that are regularly used in an apartment association. Knowing these terms can aid you in comfortably becoming a member of an association yourself, where you’ll find that your knowledge on these terms is useful. This is the second part in the series of articles. The first part can be found here: Apartment Association Terms Explained – Part One

Know your terms

Apartment Association Terms – Common Areas & Common Facilities:

Members of any apartment association frequently talk about common areas and common facilities. The primary question that runs through every single initiate’s mind is – what exactly are these areas, and how are they shared?

Common areas in an apartment primarily include the land in which the entire complex is built in.

Physical entities like the columns of the building, the foundations of all buildings in the complex, the many girders that run through the structure, the beams used for support; other physical structures used for support are also a part of the mentioned common areas for residents.
Other places like the roofs of all buildings, the corridors in each building, the halls that the complex has, staircases, lobbies, the main entrance of each building and the exit of each building all together make up the common areas in an apartment complex, according to the apartment association.
Even the cellars in the buildings in an apartment complex and the vast gardens and parking areas can be effectively classified as common areas in the complex. The list includes basements and storage spaces too.
Many facilities provided in an apartment complex for the benefit of the residents also fall under common facilities or common benefits. All apparatus used in an apartment complex, like motors, water pumps, compressors, fans, ducts, storage tanks and even elevators fall under the general umbrella of common facilities. The facilities that can be termed as common will be fully mentioned in the Declaration.
Any commercial facilities that may be provided in the apartment complex need to be mentioned in the Declaration, for them to be recognized as proper common facilities.
Public installations that provide the entire apartment complex with services like heating, lighting, air conditioning, cold water, hot water, power and refrigeration can also be termed as common facilities.

Apartment Association Terms – Common Expenses & Common Profits:

The term ‘common expenses’, although clear through its usage, can apply to a lot of things.

The common expenses of the apartment association (as per the bye laws specified by the Government) fall under the umbrella term of ‘common expenses’.
All expenses that are shared by members of the apartment association are terms, or the maintenance and steady upkeep of all common areas, are termed as common expenses too. All common expenses will be explicitly mentioned in the bye laws and these just have to be followed per se.
After the maintenance work and upkeep in a complex is done, if any amount from the original amount collected from all residents remains, it is termed as a ‘common profit’. Such profits will be shared among all members of an apartment association.

These are the many terms that you should be aware of, pertaining to shared areas and common facilities in an apartment association.

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ApnaComplex
December 15, 2010

Apartment Association Terms Explained – Part One

Learning about many terms used in an apartment association can be very helpful indeed. These terms will come to your rescue when you’re facing a huge wad of legal paperwork, and when you’re finding the formal tone and legal jargon extremely hard to understand and digest. Although we all may know the generic meaning for terms like ‘apartments’ and ‘apartment owner’, the legal meaning may be more loaded that what people can normally comprehend. Knowing all legal terms and learning about various definitions from a professional perspective can thus help you.

When reading up on the terms used in an apartment association, always go for a trusted source.

Terms Used In An Apartment Association

Given below are a few terms used in an apartment association, and their proper explanation. All these terms are defined under the Karnataka Apartment Ownership Act of 1972, which defines and talks about an individual’s ownership over a set dimension of property. You will learn more about the constituents of this act when you take up the registration procedure for your deeds and Declaration.

Apartment:

An ‘apartment’ is basically a term used to denote a residential section in a building that can be located in any of the mentioned floor, with any number of rooms. An apartment may also be present in more than one floor, or in parts in each floor. Apartments, as per the Apartment Ownership act, have a direct exit to a public road or street, or even highway. Apartments which do not fall under this category may have a direct exit to a public space or common area, which may in turn lead to a public street or highway.

Apartment Owner:

An apartment owner will normally refer to a person who owns an apartment, and has some undivided interest in all shared regions in the apartment complex too. The interest and other particulars will be duly mentioned in the Declaration, and these can be taken from the documents directly.

Apartment Number:

The letter or number designated to a particular apartment is the apartment number. The number will be mentioned in the Declaration, and it may either be a letter, a number or a mixed combination of both these things. The apartment number is first specified in the declaration.

Association of Apartment Owners:

This is a term that is used to denote all the members of an apartment association. The people who together form the apartment association are collectively termed as an Association of Apartment Owners. True to the term, these individuals will have an apartment in the premises in their name and will all be owners of at least one apartment in the complex.

Building:

In the jargon used in an apartment association, a building normally means a residential structure that houses at least four (or more) apartments. A collective building can also refer to a structure with two buildings with two (or more) apartments in each building. A minimum of four apartments are seen as necessary either way.

These are the very basic definitions that you first need to know and understand in order to proceed to the later ones. Other definitions on common areas and public spaces will soon follow.

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ApnaComplex
December 11, 2010

Formation of an Apartment Owners Association in Hyderabad, Andhra Pradesh

Hyderabad is a rapidly growing city and the IT capital of Andhra Pradesh. Real estate in Andhra Pradesh, or for that matter, Hyderabad, is growing rapidly, with an increasing demand for residential apartments and flats.

Talking of flats and apartments, it is imperative that an apartment complex has a registered apartment association in order to ensure smooth functioning of the society. The Apartment Owners Association takes care of the management of common apartment areas and all welfare requirements of the residents. The Apartment Owners Association elects a Managing Committee, which is responsible for collecting maintenance fees and using it for the upkeep of common amenities, such as the lift, club house, gym, apartment security, and various other issues.

However, the Apartment Owners Association needs to be registered to be recognized as a legal body and exercise legal rights. While Apartment Associations need not be mandatorily registered, it is certainly advisable to register the association of your apartment. Here’s the procedure for the formation of an Apartment Association in and Hyderabad, Andhra Pradesh.

There are various laws under which the Apartment Owners Association can register itself in Andhra Pradesh- the Societies Registration Act, 1960, which is a central act applicable to all states in India, other than Jammu and Kashmir; A.P Societies Registration Act, 2001, which is the registration act specifically released for the state of Andhra Pradesh. This act extends to the entire state. Only a group of seven or more people, who work for public interest at large, such as promotion of art, culture, literature, religion, science, philosophy, can register under this act.; or The Andhra Pradesh Apartments (Promotion of Construction and Ownership) Act, 1987. In fact, most apartment associations in Andhra Pradesh are registered under this act.

According to this law, Association of Apartment Owners is defined as “all the apartment owners acting as a group in accordance with the provisions made by it in the bylaws”. The builder, who has constructed the apartments for the purpose of selling them, is called the “Promoter” according to this law. Under this law, the promoter has to submit in writing the date by which the apartments will be handed over to the apartment owners, as well as a list of common properties and documents that will be handed over to the Apartment Association.

According to The Andhra Pradesh Apartments (Promotion of Construction and Ownership) Act, the common property of the Association includes:

The land on which the building is located.
Stairs, entrances, fire-exits, elevators, terraces, lobbies, halls, basements, parking lots, cellars, children’s playing grounds etc.
Premises for the lodging of persons employed for the management and maintenance of the building.
Installation of central cervices such as water, electricity, gas etc.
All apparatuses and installations for general use such as tanks, bore wells, and pumps.

To register under the A.P Societies Registration Act, 2001, or Andhra Pradesh Apartments Act, 1987, a set of documents along with a formal application needs to be submitted to the Registrar of the District. The application must have the signature of all the applicants as well as that of a witness. The following documents need to be attached with the application:

A Memorandum of Association of the society, which must include:

The name of the society
The aims and objectives of the society
The name and occupations of the members in the committee
The person in the committee who is authorized to correspond with the Registrar of the District
The by-laws of the society stating the membership eligibility; process for electing the Managing Committee; rules for holding meeting, quorum, functions and responsibilities; the office bearers with their responsibilities, election and removal process; types of fund raising, appointment of auditors, and other matters relating to internal management and dispute resolution.

All the documents submitted must be typed or printed and signed by all the applicants. All the persons who sign the application papers are considered the original members of the Association. However, later on, more members can be added to the Apartment Owners Association. It should be noted that it is mandatory for all owners of an apartment complex to become members of the Association.

Once the memorandum and by-laws are found to be legally valid, and the required registration fee has been paid, the Registrar issues the Apartment Association a Certificate of Registration, which proves that the society is legally registered.

However, it is vital to note here that the law requires a signed document to be registered within four months from the date of signing of the document. If it exceeds the given timeline of four months, a penalty is levied as late registration charges.

After the Association is registered it can take legal action on the behalf of the owners, as well as maintain the apartment and enforce the by-laws.

Read also: Bylaws: The constitution of your Apartment Association and download a sample byelaws template that you can customize for your needs

This article aims at collating and providing information on forming an association for benefit of ApnaComplex customers and readers. While ApnaComplex has taken every care to ensure the information is accurate, we suggest to please use it only as a guidance for further discussion and action with help of relevant professionals. If you need professional advise on this topic and any other property related matters, please send your request through our contact us form. You may post your questions/inputs in the Comments section below and we will try and get them answered through relevant subject matter experts.

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ApnaComplex
November 23, 2010

Know Your Residents Welfare Society Better- The Different People Who Make An Apartment Association

It is a well known fact that a residents welfare association is a necessary wing in every gated community. These apartment associations help in organizing all public events in an apartment and play an active role in maintaining the apartment’s infrastructure by giving out responsibilities for all its members, so that they do their share for maintaining the apartment as a haven for harmonious living.

You’ll need to know the lowdown on what goes on within the ranks in an apartment in order to fit yourself into the association, and find your true calling in the group.

Every member has to contribute effectively run an apartment’s Welfare Association

The Roles

When an apartment association or resident welfare society is formed in an apartment complex, all apartment owners are termed as members and all tenants who are staying in the apartment on a rented basis are termed as associate members. All members together form the general body of the apartment association.

The top tier in an apartment complex is called as the Management Committee. This Management Committee comprises of a President, a Vice President, A Secretary, A Treasurer, and other office bearer members. Some of these roles have already been discussed earlier. People are voted into these respective positions by all members, excluding associate members.

The Management Committee in an apartment association serves as a section that deals with all legal issues and upholds human rights and other interests within the apartment. The Management Committee has its own fair share of duties in an apartment complex, a few of which have been discussed below.

Management Committee Duties

The Management Committee in an apartment association is responsible for organizing public amenities for all residents in the apartment (including gyms, parks, and roads).
The committee is also primarily responsible for organizing cultural activities during particular occasions like national holidays (flag hoisting and other group activities).
The committee is in charge of organizing recreational facilities for all residents too.
The Management Committee should defend the interests and rights of every single member in its ranks, especially in the face of legal issues and the like.
The committee will also be responsible for handling all documents related to the apartment complex, and it has to ensure the safety of these documents too. The licensure and permission given for the building’s construction also needs to be maintained well by the committee.
Maintaining financial records and bank accounts will also be the committee’s responsibility.
The committee also has to ensure that the amount of money collected from all residents for maintenance purposes is effectively spent on repairing and improving the infrastructure and should maintain records for the same.
The Management Committee should also conduct regular meetings including all members and discuss everyday issues and problems and doubts if any, which can be clarified during the course of these meetings.

All members of the apartment association should attend such organized meetings and should exercise their right to vote in the face of committee issues. They should also follow all guidelines stated by the Management Committee and in this way, contribute their part to the community, making the apartment complex a peaceful place to live and co-exist in!

ApnaComplex is an apartment managment software. We are now offering a 30-day no obligation free trial for every complex. Go ahead and register your complex and see how you can manage your complex more easily, efficiently, and effectively.

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ApnaComplex
November 15, 2010

Roles, Duties And Responsibilities Of Members Of A Resident Welfare Association

A resident welfare association is necessary, as it can serve as a committee through which queries can be explained, and issues and problems solved. The presence of a committee or resident welfare association will also spice up interaction among residents and get them to contribute equally from their part. Such open social interaction will improve the joy of living in an apartment complex.

A resident welfare association, however, needs to be registered under the government for it to be recognized as a proper association. A registered resident welfare association will this way be able to enjoy many legal benefits. While forming a registered resident welfare association, make sure that you have more than seven members who are at least eighteen (or above) years of age. This is very important.

Every Individual Has A Role in an Apartment Association

The primary objective of every resident welfare association would be to collect the common maintenance charges from every single resident in the apartment and use this in establishing good public infrastructure for the residents. An association will normally have to be formed under The Karnataka Apartment Ownership Act of 1972 or
The Karnataka Societies Registration Act, 1960 (and appropriate act for states other than Karnataka).

Every resident welfare association will have a management committee, a president, a treasurer and a secretary, apart from the regular members. There are many common responsibilities that members of the association should take up among themselves, and some of these have been mentioned below (we will cover other roles in future blog posts):

The President’s Role:

The President will be given the authority to defend any form of legal action that is taken against the association, and will also be given the authority to sue people for legal purposes and reasons.
The President of a resident welfare association will have the final call in approving a contract that is brought by the committee and implementing the terms.
The President should maintain an overall view on the occurrences and ensure that all residents and members are satisfied without having any qualms or problems. The President should also oversee all expenses and make sure that they are put to good use.

The Treasurer’s Role:

The Treasurer in a resident welfare association will be given the task of maintaining all funds within the organization. The responsibility of maintaining the money safely along with all documents also rests solely with the Treasurer.
The Treasurer’s role is a demanding one and should be bestowed upon an experienced person with good management capabilities, as these documents and funds are very important for the association.
The Treasurer should also make note of the overall income and also calculate monthly and yearly expenditures. This way the flow of money will be constantly regulated for the benefit of the residents.

The Secretary’s Role:

The secretary in a resident welfare association will be given the responsibility of conducting various general body meetings.
The secretary will also be given the responsibility of compiling the minutes of the meeting and analyzing the overall information brought to the table.
The secretary will have to bring up concerns from each individual resident in order to ensure active participation of all members.

These are the three major roles in any resident welfare association, and you’ll need to be aware of all such responsibilities involved, in order to contest for the spot yourself, or even in order to vote for the right person when the polls come up.

ApnaComplex supports the notion of committee members – administrators can tag members with different committee member roles and even give “permissions” to modules specific to thier roles. For example, a member can be tagged as a treasurer can be given access to only accounting modules. ApnaComplex is an apartment managment software. We are now offering a 30-day no obligation free trial for every complex. Go ahead and register your complex and see how you can manage your complex more easily, efficiently, and effectively.

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ApnaComplex
August 11, 2010

Before you buy: A checklist for Apartment Buyers

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Buying an apartment is one of the most exciting, yet at the same time, most challenging tasks in life. It is exciting because it is one of the biggest financial and emotional commitments one can make. At the same time, buying a home is one of the most demanding activities because of the many pitfalls involved in the process. From fly-by-night developers who are only interested in making a fast buck to poor quality of construction to use of inferior materials and fittings to lack of supervision and inadequate approvals from the concerned government authorities… there are many issues that an apartment buyer has to grapple with. In this article we try to offer you a checklist that could help you decide whether your money and efforts will buy you an apartment that you’d be proud to call home.

Whether you’re planning to buy an under-construction property or a ready-possession flat, do go through the check list given below:

Know the builder

It is always better to go with a builder who has an established presence in the market. A builder who has a good reputation in the market may charge a slight premium over the other builders, which could be well worth it. Consider it as an investment for your peace of mind. Check the following facts about the builder before you decide to consider a certain property:

Has the builder constructed sufficient number of projects to establish a reputation?
Does the builder enjoy a reputation for completing projects on time?
Is the quality of their projects as per the standards you’re looking for?
Is the quality of staff employed by the builder helpful and courteous with your queries?
Do the leading financial institutions have tie-ups with the builder?

Know the project

Once you’ve short listed the builders whose properties you’d like to buy, find out more about their projects by using the following checklist:

Is the project located in an area of your choice?
Is the project easy to access by road and rail?
Does it have common facilities within easy reach?
What is the distance from critical infrastructure like schools, hospitals, fire and police stations?
What are the future civic plans for the locality?
What is the weather impact on the locality? Does the area get flooded during the monsoons?
What is the noise and air level pollution in the area?
How is the water availability in the area?
What is the number of buildings that are being planned? Will the long construction period affect the quality of living?
What is the project plan? Does it leave enough open space for leisure activities?
Does it have enough parking spaces for residents and visitors?
If the building has lifts does it have back up power supply?
Is the construction environmentally and structurally sound? Is it an earthquake-proof construction?
What would be the monthly maintenance outgo for the project?
Is the project in a safe locality? Does the project offer security staff cabins and intercoms?
If you’re buying a flat on resale or in a ready constructed property, check with the existing owner’s association and existing residents. You should be able to get lot of valuable information regarding the project and the locality.

Know your apartment

Once you’ve identified the projects that you’d be interested in investing, check out the apartment with the help of the following checklist:

Get the floor plan of your apartment.
Calculate the carpet area of the apartment.
Check out the inside and outside wall finish. Does the outside wall have a weather coat?
Check the floorings used. Does the bathroom and kitchen have floorings that are safe?
Inspect the electrical fittings. Do they have child-safe fittings? Are the electrical fittings of a reputed brand?
Check the bathroom and kitchen fittings. Are they of a quality brand?
Check the door and window quality. Are the doors built to provide easy access? Do the windows allow enough light and air into the rooms?
Does the flat allow cross-ventilation for better circulation of air?
Does the ceiling have sufficient height?
Are the features offered in the rooms of contemporary style and usability?
Is the view from all windows of the room acceptable?
Do the rooms have provisions for AC fittings?
Are there enough outlets for phone, TV and internet connections?
Are there provisions for storage and drying clothes?

Know your documentation

Even if you’ve liked an apartment, don’t be in a hurry to sign up the deal and hand over your money. Go through the following documentation carefully to save yourself years of headache later on. These documents are the final checklist that you need to verify before you make your buying decision.

What is the rate quoted per square feet? Is it reasonable when you calculate it in terms of the carpet area?
There are other statutory charges along with additional charges that the builder quotes outside of the apartment cost. Have you considered those costs?
What are the extra amounts that the builder is charging?
How much will the statutory charges such as Stamp Duty, Registration Fee, Electricity connection fee, Water connection fee, Sales Tax, Building tax, service tax and other expenditure add up to?
If you’re going for an under-construction flat, what will be the payment schedule? In case, you are booking a flat in an under construction apartment, ask for a copy of the schedule and any service and value added tax that you may have to pay.
Compare the layout of the apartment with the plan given by the builder. Is there any difference between the two?
Does the documentation provided by the builder suggest a clear title? Get it verified from a government authority if you need to be sure.
Check the fittings provided in the apartment with the promises made by the builder in their brochures.
Check if all the necessary property approvals have been obtained from the land development or planning authorities under the Urban Land Ceiling and Regulation Act and the Income-Tax Act.
Has the municipal corporation issued an occupancy certificate to the project? Insist on seeing this.
If you’re buying a resale property, check the ownership document to see the earlier transactions. Also check that the required statutory approvals including stamp duty and property registrations have been done.
Check that the builder has acquired all the legal approvals from the Municipal Corporation the Electricity Boards, the water supply and Sewage Boards and the Area Development Authorities.

While the above list is not comprehensive, most buyers consider only a few of the above parameters that are listed above when investing their hard-earned money in their home. Following this checklist will appear time-consuming. But believe us, it will save you years of trouble and offer you peace of mind that really lasts.

We wish you the very best for your dream home!

The entire checklist can be downloaded in excel format from here.

This article aims at collating and providing a ready to use checklist for prospect buyers of an apartment for benefit of ApnaComplex blog readers. While ApnaComplex has taken every care to ensure the information is accurate, we suggest to please use the information in the article and the template provided as a guidance and do your own due diligence before buying any property. If you need professional advice on this topic and any other property related matters, please send your request through our contact us form. We encourage readers to post more items that can be added to the checklist ad we would be glad to release an updated checklist for benefit of the buyers.

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ApnaComplex
July 20, 2010

Popular methods of calculating Maintenance Charges in Apartment Complexes

As a resident of an apartment complex, you are required to pay a monthly charge for the upkeep and maintenance of your society. This maintenance charge is usually arrived at taking into account the monthly expenses plus an additional amount that the society can save for major repairs or maintenance that will arise at a later date. Every housing society decides on a method that it believes is a fair and reasonable way of calculating the amount for each member. While this may sound like a simple agenda, at times, it’s not so simple to carry out due to the different ways in which the amount can be calculated. Here, we present some of the popular ways in which societies calculate maintenance charges along with their respective pros and cons:

Pay per Square Feet:

This is the most common and popular way of calculating maintenance fee. In this type of calculation, a fixed rate is charged per super built up area of the apartment that you own. For example, if the fixed rate is Rs. 2 and you own a 1000 sq. ft. apartment, your maintenance charge will be Rs. 2,000 per month. In this type of arrangement, the bigger the area of the house, the higher you pay as maintenance charge. So in apartment complexes with apartments of varying sizes, you’ll have people paying different amounts per month as maintenance charge.

Pros: It is easier to calculate. This method is one of the most commonly used methods in apartment complexes.
Cons: While this method is popular, it is unfair on people owning larger houses as some of the facilities that they use like a lift, the garden, the club, security services etc. are equally shared among all members irrespective of the size of the flat.

Combined Maintenance Charges:

In this method, the maintenance amount is divided into two parts. Part 1 includes all expenses that are equally utilized by members, irrespective of the size of their apartments. This includes the cost of maintaining lifts, salaries for security and other staff, costs for stationery, property taxes of society office, conveyance, meeting charges, audit fees, legal charges, common electricity charges, etc. The other part is calculated on the basis of the area of the flat and includes items like property taxes, water charges, etc. This is also the method advocated by the Maharashtra Cooperative Societies Model Bye-Laws.

Of this amount collected, everything is an immediate outgo for the society except for the amount collected as sinking fund. This amount is used when the society needs funds to carry out major repairs or maintenance. So instead of collecting the amount from the members at one time, the society can dip into the sinking fund that has grown over the years. The bye-laws recommend collecting at least 0.25% per annum of the cost of construction of each apartment (excluding the cost of the land) as sinking fund corpus. The AGM can vote to collect a higher amount than this if required. The amount is calculated on size of the apartment. This amount remains with the society until any major repairs has to be undertaken. In case the owner sells the apartment, this money is not returned to him/her.

Pros: Aims to be fair on all parties involved. The members owning a bigger apartment is not penalized based on the size of the apartment. All other expenses which are related to the size of the apartment are charged as per dimensions of the apartment.
Cons: There can be lot of differences of opinion on the items that should be charged as per size of the apartment.

Equal Maintenance Fee:

This method is favoured in apartment complexes where the size of each apartment is the same. Here, the fixed amount is arrived at after calculating the monthly expenses plus the amount to be kept aside in the sinking fund and dividing the total by the number of apartments in the society. As costs increase, this amount gets revised in the Annual General Meeting. For complexes where apartments are of different sizes, this method will be unfair and is usually not accepted by the members.

Pros: Easy to implement in societies with same-sized apartments.
Cons: Unfair to smaller apartment owners in societies with different-sized apartments. The greater the difference in size of the apartments, the higher will be the discrepancies in the maintenance charges between the members.

In all methods, it is recommended that the maintenance amount calculation be revisited at least once in six months based on the actual expenses incurred in the past 6 months and the contingency amount that the association would like to maintain for any exigencies.

While these are some popular ways of calculating the maintenance charge, a residential society can arrive at any system that is considered fair and acceptable to all members of the society. If there is any doubt, you can refer to the model bye-laws and decide on the best way to calculate the maintenance charge in your Annual General Body Meeting.

Update: You can also refer to this article – How to Calculate Maintenance Charges for your Apartment Association?

This article aims at collating and providing information on maintenance charge calculations for residential complexes for benefit of ApnaComplex customers and readers. While ApnaComplex has taken every care to ensure the information is accurate, we suggest to please use the information in the article and the template provided only as a guidance for further discussion and action with help of relevant professionals. If you need professional advise on this topic and any other property related matters, please send your request through our contact us form. You may post your questions/inputs in the Comments section below and we will try and get them answered through relevant subject matter experts.

26 Comments InApartment Management Articles Bye Laws Financial Legal Maintenance Tips

ApnaComplex
June 7, 2010

Bye Laws: The Constitution of your Apartment Association

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If you are looking for sample template of bylaws for residential welfare association or apartment owners association, download from here.

Need for Bye Laws

The primary responsibility of the Managing Committee of an Apartment Owners Association (or Residents Welfare Association) is to ensure proper maintenance of the Apartment Complex and to resolve any issues that residents face in a timely and effective manner. These are not easy tasks to handle when you consider the sheer variety of challenges that confront the committee. Convincing members to act in the interest of the society is no less a challenge either as almost every resident is aware of their rights but few accept their responsibilities. So how does a Managing Committee go about its day-to-day tasks, taking clear, unbiased actions that work in the best interest of the society? What are the powers of the Managing Committee that enables it to enforce its decisions? And what makes the members of an Apartment Complex accept these decisions?

The answer to all this lies in the rules and regulations that every Apartment Complex adopts from the moment it is registered. Called bye-laws of the society, these rules and regulations govern the day-to-day functioning of the Apartment Complex. So crucial is the role of bye-laws in the smooth functioning of a society that many consider them to be the constitution of an Apartment Complex.

Registering Your Bye Laws

The Co-operative Society Act is a Central Act that helps co-operative societies to manage their affairs. However, most States in India (Maharashtra in 1960, Gujarat in 1961, Karnataka 1960 and so on) have repealed this act and have created their own Co-operative Societies Act. These Acts specify the rules and regulations that are part of a model set and usually any residential Apartment Complex association is free to adopt these bye-laws in total or modify them as per their requirement and accept them. The Act thus offers a certain degree of flexibility to societies.

What is inflexible, however, is the need to get the bye-laws adopted. The bye laws are considered so critical for the efficient working of a society that it is mandatory for an Apartment Complex Association to approve and submit them to the Registrar of Societies during the formation of the association itself. The bye-laws adopted by an Apartment Complex should have the following details:

the aims and objectives of the society,
the details of the rules and regulations that apply to members,
the specifics of selecting a member and office-bearers of the society,
details of how the association aims to help the residents of the society
details of how it will go about getting the co-operation of all members.
information on how the society will manage its income and expenses.
the list the office-bearers who will be authorized to issue cheques and monetary transactions on behalf of the association. (Bye-laws usually recommend rights to three-office bearers for signing any document or monetary transaction with any two of them required to sign at one particular time.)
details about transfer charges, maintenance costs, penalties, etc

The bye-laws should also mention when and how the AGM of the society will be held. Usually the first AGM should be held within six months from the close of the financial year. From the second year onwards, it should be held every year after March 31 and before August 14 as per bye-law no. 95or within an extended period as per Section 75(i) of the act. An AGM can be held by giving at least 21 days prior notice to members.

Amending your Bye Laws

Once the bye-laws are adopted, the society can function forever with that particular set of rules. However, the bye-laws can also be amended by the government or the residents themselves if the need arises. For example, if the bye-law says that the tenure of the Managing Committee should be 5 years, the association can change it to 3 years or 7 years by getting it approved by the General Body and then the Registrar. The new set of amended bye-laws will become functional for the association from the date of approval by the Registrar.

An Apartment Complex Association can amend its bye-laws in the following manner:

A General Meeting (annual/special) should endorse the change with a two third majority of the members present in the meeting. This two third of members should not be less than one third of the total members in the society. (The Registrar may still accept the amendment under such a condition if the reason for the low turnout is explained in writing).
The Managing Committee should submit the form mentioning the new law to be brought into force.
The Committee should also submit four copies of the existing bye-laws along with the resolutions passed by the Annual General Meeting.
Along with the signatures of the Managing Committee, the form should have the following details:
- The date of the meeting at which the amendment was passed.
- The number of members in the association.
- Number of members of the present in the meeting.
- Number of members who voted in favour of the amendment.

The Registrar will register the amendment upon satisfaction that the amendment does not contravene any Act or rules that guide the functioning of a co-operative society. On approval, the Registrar will issue a certificate of registration along with the certified copy of the amendment. This is proof of the amendment being successfully registered. The Registrar of Societies can, however, refuse to register an amendment of the bye-laws. The Registrar will provide the reason for the decision in writing to the association.

The bye-laws are thus binding as well as flexible enough for the Managing Committee to manage the affairs of the association as best as possible.

You can download a sample template of bye-laws from here.

This article aims at collating and providing information on bye-laws for residential complexes for benefit of ApnaComplex customers and readers. While ApnaComplex has taken every care to ensure the information is accurate, we suggest to please use the information in the article and the template provided only as a guidance for further discussion and action with help of relevant professionals. If you need professional advise on this topic and any other property related matters, please send your request through our contact us form. You may post your questions/inputs in the Comments section below and we will try and get them answered through relevant subject matter experts.

65 Comments InApartment Management Articles Bye Laws Legal Resources

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