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Should a multi-storied apartment complex association register itself under Societies Act?
Written By murali772 - 30 July, 2009
Bangalore governance housing Group Housing
A reading of the Karnataka Apartment Ownership Act 1972 (KAOA, otherwise called Act no 17 of 1973 - click here) very clearly brings out the fact that that is what is relevant to multi-storied apartment complexes. And, that is what builders are generally following, as required of them as per the Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972 (otherwise called Act no 16 OF 1973 - click here).
However, there is no authority specified under KAOA to 'register' an association, though the 'Registrar of Co-operative Societies' has been named as the "Competent Authority", but with powers and responsibilities not clearly defined.
Because of this lacuna in the KAOA, there have been suggestions from lawyers to register multi-storeyed apartment complexes under the Karnataka Societies Registration Act, 1960 (KSRA, otherwise called Act 17 of 1960 - click here), where the powers of the Registrar have been fairly well-laid out, including of the appointment of an 'Administrator' if required.
A closer reading of the KSRA however clearly shows that it pertains generally to 'Literary, Scientific, Charitable and other organisations'. The relevant Cl 3 is fairly specific in these respects. Nowhere is there even a mention of 'apartment complexes'. Consequently, if still pursuing registration under this Act, the association will require to change its name to include words like 'welfare', etc, and also amend the 'aims & objects' in its by-laws to include pursuit of some of the activities listed under the clause.
Further, registering under this Act will also enjoin a lot of additional responsibilities on the Managing Committee, like filing of annual returns along-with certified copies of Income & Expenditure statement, Balance Sheet, as also payment of filing fees amounting to 0.2% of the 'transaction value' in the Income & Expenditure statement. Even as it is, it is generally difficult to find competent people to take up office (generally honorary positions) in such associations, and adding more burdens, is only helping deter them further. The new requirement of the Govt of Karnataka that all correspondence and documentation will in future have to be in Kannada, is not making things any easier.
But, the proponents of the suggestion go on to argue that it helps bring about greater discipline, therewith accountability, and therefore it is worth the effort. Whatever, as a very senior lawyer in the city (who also was the Charter President of the association in one of the earlist multi-storied housing complexes, where he resides even today) opined, "no administration can be more transparent than that by a democratically elected 'Managing Committee' functioning according to the guidelines prescribed by a vigilant General Body of members".
COMMENTS
sanjayv - 21 December, 2009 - 17:17
Hi Murali sir. Did you learn anything more about this? Thanks for bringing this to this forum. Our apt association is in the process of getting registered and they seem to be pursuing the societies act as recommended by the lawyer. This is useful information. Now since all laws have "rules", where would one get a copy of the "rules" for the KAOA?
@ Sanjay
A good friend of mine, Mr C N Kumar, raised a querry on the subject under RTI. With the concerned departments passing the buck from one to the other, the matter has now landed up with the Karnataka Information Commission. Check on KIC website with case reference KIC PTN 3658 2009. The next hearing has been posted for March '10.
Our builder gave us a set of rules conforming to the Act, and we have built on it ourselves.
sanjayv - 25 December, 2009 - 12:42
The KIC website has made for entertaining reading. In short, the law enacted in the 1970s has fallen through the cracks?!! Amazing. I hope this RTI request is a catalyst to resolving this issue. The KAOA is so much clearer and should be a nice tmeplate for dispute resolution within apts.
murali772 - 27 December, 2010 - 04:41
@ Sanjay
I can courier you a hard copy of the letter I will be sending to the UDD. May be, you can follow that up with a letter from your association.
Ideally, we need to network with all other RWA's acroos the city, and even the state, to collectively tackle such issues. May be that could be a project - any ideas how to further it?
On reading this post, a friend linked me to this, published by Mr Ravi Kumar, Provisional secretary, Association of Mysore Apartment Societies (AMAS), and Member, Mysore Grahakara Parishat, which makes interesting reading.
I got through to him on phone, and he told me that their members' meeting the Secretary, Co-operation, GoK, in Bangalore, in March, '08, in this connection, didn't quite solve the problem, and therefore, they addressed a letter to the Principal Secretary, Urban Development, GoK, early this year, which has yet to be responded to.
His belief is that since the 'competent authority' named in the Act is refusing to get involved, an association does not enjoy legal status even if the Deed of Declaration, made out as per the Act, has been registered with the jurisdictional Sub-Registrar (of documents). Many reputed lawyers that I have spoken to, however, content that the Act only calls for 'filing' of the copy of the registered document with the competent authority, and whether that's done or not, the process of registering (with the sub-registrar) gives the association the legal status.
Whatever, no one is currently aware of even a single case where a court has refused to acknowledge an association as a legal entity on account of this.
I referred the matter to Mr Manivannan, who has now offered to Mr Ravi Kumar to pursue the matter at Vidhan/ Vikas Soudha, in his official capacity.
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