Housing association has raised an AMC demand without an AGM
Dear Sir/ Madam,
The housing association I live in is in Bangalore and is registered under KSRA. The last AGM (for the year 2016-2017) was held on 31st July 2016 with a followup EGM on January 2017 (increasing the AMC rate for 2016-2017). The AGM for this year (2017-2018) has not yet been scheduled, but the managing committee has already issued an AMC (Annual Maintenance Charge) demand for 2017-2018 and also threatened to levy a penalty on anyone who does not pay within 25 days of the demand.
When asked the Managing Committee have responded with "An EGM or AGM decides the AMC applicable for the year and until another AGM or EGM revises it , the previously decided AMC remains valid".and are using this as justification to carryover and use previous year's AMC this year. My understanding is that the AMC decided is for a fixed time period (last year's AMC is valid for 2016-2017 and is minuted as such) and cannot be carried over to this year, without majority approval in the AGM for 2017-2018.
Given your experience and expertise in the laws and bye-laws of the KSRA and KAOA, could you help us in this matter by answering the following questions?
1) Is the association's.demand for AMC without holding an AGM, without presenting the accounts for previous year and without presenting the budget for this year valid and legal? Is the AGM not essential to authorize the AMC? If for any reason the AGM for this financial year gets skipped, will the AMC decided for 2016-2017 be valid till next year's AGM?
2) The association has threatened a penalty for non-payment of AMC demanded. Given the current context, is that legal and enforceable? A penalty of 1% on non-payment of dues was decided in one of the past AGM's, but given that this year's AMC demand is raised without an AGM, can the penalty be enforced?
3) If a member requests details of the incomes, expenditures and the sinking fund, by when should the information be made available to him/ her? A week? 15 days?
4) Should the managing committee share with members and residents information on the statement of accounts, incomes, expenditures, sinking fund and planned budget for the ensuing year while calling for an AGM? Right now, all we get is a notice for the AGM with financial information being shared only in the AGM. A printed record of financial information is passed around in the AGM for 2 - 3 minutes and we barely have time to make understand the details, before it is taken back.
We have had problems in the past, with the managing committee trying to unilaterally take financial decisions without the proper forum of AGM/ EGM and hence we take a cautious approach to matters affecting the residents financially.
Answers to these queries will help us decide the way forward and your advice is invaluable in this regard.
Asked 8 years ago in Property Law
Religion: Hindu
According to my records that I've from 2011 onward, an AMC demand has always been generated after the AGM with one exception. In April 2016, the then managing committee published a letter to create an interim AMC with a lower rate to meet day-today expenses till the AGM was conducted in July 2016( and AMC raised to generate funds). Since this interim AMC was accompanied by a letter from the managing committee explaining their stance and had a low rate, no objections were raised and all payments were done.
Further, each of the 42 apartments had paid between Rs. 18,000/- to Rs. 20,000/- in February 2017 towards the 2016-2017 AMC following the decision of the EGM in January 2017. The EGM minutes clearly state that the AMC is valid for 2016-2017. So we are assured, that there is no shortage of funds in the association.
In April this year (just two months after the residents have paid an average of Rs. 19,000/- each), the managing committee has demanded between Rs. 45,000/- to Rs. 55,000/- from each of the 42 apartments as AMC, depending on the apartment size. This is a substantial cost right on the heels of the previous AMC payment. The AMC invoice for 2017-2018 states that it has been approved by the January 2017 EGM, which is untrue as the EGM minutes for January 2017 clearly state the AMC is valid for 2016-2017.
There is no letter explaining the managing committee decision, no communication in any form to explain the demand nor any attempt to term the recent AMC demand as interim. In this case we assume that the AMC demand is to be taken as the final demand. We feel this is heavy-handed behaviour on part of the managing committee and that they seem to have taken a unilateral decision bypassing the due process. This behaviour has the residents worried about the validity of the actions of the managing committee.
Asked 8 years ago
