When homebuyers take possession of a building property from a builder, they also take over the responsibility of managing the building affairs and maintaining the property to ensure their long term enjoyment and use of the building property. For this reason, they make associations and societies under the aegis of legal provisions enacted to protect the interests of homeowners and provide them with the necessary powers to regulate the affairs of the building by themselves.
The associations or cooperative societies formed are legally registered under different statutory enactments with their powers and obligations provided under legal provisions. Though the overall objectives of the apartment owners association and cooperative society are similar, there are certain differences in the structure and powers of these two bodies. These bodies are governed by different legal provisions and manage the building property by framing a set of bye-laws.
Both of these bodies have their advantages and disadvantages when it comes to balancing the management of the building property and ensuring the interests of every society member/apartment owner. This article seeks to highlight the advantages and disadvantages of apartment owners associations.
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The Advantages of an Apartment Owners Association
The advantages of a registered apartment owners association are the following:
- The apartment owners who have formed an association have greater rights over their individual apartment property and greater autonomy in the association.
- The apartment owner in an association is the true owner of his or her apartment in a building property unlike the member of a society who despite having the right to occupy and use the property does not have true ownership of the flat. The flat truly belongs to the cooperative society.
- The apartment owner has the rights to dispose of the apartment property, lease it out or rent it out to whomsoever s/he may choose without the permission of the Board of Managers (the body which protects the apartment owners’ interests and ensures the provision of the amenities to the building). This is not the case in a cooperative society where you need permission before you decide to sell, lease or rent out the property. This is due to the nature of ownership discussed in the first sub-point.
- You will also find that the conveyance deed of the apartment in the case of a registered association belongs to you, the apartment owner. But in the case of a cooperative society, the conveyance deed of the building property belongs to society. Instead, the member is given a share certificate that serves for all rights and purposes as the title deed of the flat property.
- The apartment owners can effectively protect their property rights and manage the entire building property affairs by forming a body that comprises the apartment owners as members. The apartment owners elect a Chairman, a Treasurer and a Secretary from among themselves. These members holding posts are important office bearers of a governing body and along with a few other members make up the Board of Managers. The Board of Managers is an important managing body that:
- protects the rights of the apartment owners comprising it;
- Ensures that the amenities of the building are maintained and in proper condition to be used by the apartment owners.
- Ensures that there is an uninterrupted supply of water and electricity services to the building property.
- The association ensures that the apartment owners comply with what is legally required of them by the statutory provisions.
- The association formulates by-laws that regulate the rights and obligations and conduct of the affairs of the association about the building property to avoid disputes between the apartment owners and ensure the safeguarding of the building property.
The Disadvantages of Registered Apartment Owners Association
However, certain disadvantages of registered apartment owners association are the following:
- In a Registered Apartment Owners Association, the voice and opinion of every apartment owner count. Where this is good for protecting individual rights, this is a disadvantage for the association’s interests.
- If every owner is not on board with a particular course of action, it leads to the stalling of that action with no decision being taken on it.
- The association’s Board of Managers does not wield the clout or powers of a cooperative society’s managing committee or general body. In the case of a cooperative society, the decision taken by the general body is final.
- The association’s framed bye-laws do possess the binding power as a cooperative society. However, the maximum an association can do is penalize an owner for violating the rules. However, in a cooperative society, in extreme cases, society can expel a member if the member fails to heed the repeated warnings of the society when it comes to bye-law violations.
The apartment owners association can be either legally registered under the provisions of the Societies Registration Act, 1930 or remain unregistered. But there are advantages to legal registration for cooperative societies in the form of complete control over the building premises, legal recognition from the State, easier access to dispute resolution mechanisms, etc.
It is not mandatory for a building to have an association but it is advisable. Also, a member doesn’t need to join a society unless s/he applies for such membership. It is also possible for expelling a member if the member does not comply with the bye-laws or has outstanding dues of membership with the society.
The apartment owners association is formed by the apartment owners to lend collective strength to the interests and secure the building property in which they have their respective apartment properties. An apartment owner’s organization can be legally registered under the relevant provisions or may remain unregistered. However, legal registration of an association avails it certain benefits over the remaining unregistered. These benefits are better financial control to ease in opening bank accounts due to the existence of a registered identity, legal recognition of, and control over building premises.
There are also certain advantages and disadvantages when it comes to the formation of associations as compared to cooperative societies and such a body ensures the protection of the apartment owners’ rights and the maintenance of amenities and supplies to the property. When apartment owners form an association, knowledge of the legal provisions that regulate these associations and their affairs are required. This allows the owners to better assert their property rights, protect their interests and comply with legal requirements.
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