• Problems with Apartment association and the way it is working

Our Apartment association is formed in 2016, We bought an apartment is 2017 and I have only discovered in the last 1 year that the association is not working by rule of law and there are many irregularities in handling money. Please find the below irregularities

Our Apartment is located in Hyderabad, Telangana . 

1) All the actual association members sold the flats and moved on . After that new association took over , but none of the association members are registered as members

2) There are no by laws registered. 

3) Documents handover from the Builder did not take place until now.

4)Even though the money is under the association account, the person in charge of the bank account is the previous owner who sold the flat . 

5) Money is being transferred from the association account to personal bank account of the association members . The reason given by them is they are spending the money from their account, but there are not bills attached for the expenditure. 

6)decisions taken in spending money without a proper process involved.

In the case of above circumstances what are the rights of the flat owners. Most of the flat owners are aware of the situation now . Are the above activities legal? Do they have right to spend our Initial deposit without proper consulting. What are the steps to be followed to fix the above problems and better running of an apartment society
Asked 2 years ago in Civil Law

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9 Answers

It is mandatory to audit accounts on yearly basis and submit audited accounts to members 

 

2) complain to registrar if association has not approved any model. Bye laws , not submitted audited accounts , not holding AGM

 

3) you can also take legal proceedings against association to direct association to submit audited accounts for last few years , to hold AGM 

Ajay Sethi
Advocate, Mumbai
94712 Answers
7530 Consultations

5.0 on 5.0

Apartment owners association is a vital part of community living. Apartment owners association works for the welfare of residents in the apartment, conducts events or awareness programs and protects the rights of apartment owners. The registered association enjoys all the legal benefits.

 Arbitration / mediation is a technique for resolution of disputes among members of the association or residents in the apartment. There may be internal matters in the apartment that need to be resolved or the apartment owners association may have disputes which may require legal intervention. The general body elects members belonging to the general body to form a  Management committee. The management committee represents the apartment owners association and will look into all matters concerning the apartment as well as the rights and interests of members.

All members of the association are bound by the bye-laws of the association. The work of the Management committee is reviewed by the General Body or member of Association at the annual general body meeting or any other meeting. The Managing Committee can organize social and cultural events, recreational facilities for residents or join hands with any other association for common and mutual benefits. It is the duty of the Managing Committee to keep in its custody all original documents connected to the land and building as well as licenses issued by any authorities relating to the apartment complex.

The bye-laws of your association have to be looked into before taking a step. The secretary is responsible for the executive administration of the association subject to the control of the committee. The treasurer has custody of all properties of the association, including the funds of the association. If a person sold his apartment has no right to association. The by-law is still existed even if the members changed their status as previous owners.

So you can choose two options

  1. Send a legal notice to secretary for conducting  the Annual General body Meeting and raise the issues at the AGM. If the secretary is not called the AGM approach, a civil court is to get such relief.
  2. Approach the registrar and file a complaint. An apartment owner fails to comply with the Bylaws or the Rules and Regulations, either damages or injunctive relief or both can be claimed against him.

 

 

Ajay N S
Advocate, Ernakulam
4073 Answers
111 Consultations

5.0 on 5.0

You can file a complaint with dy registrar in the said matter. You can also approach to consumer court or cooperative court for the same

Prashant Nayak
Advocate, Mumbai
31946 Answers
179 Consultations

4.1 on 5.0

Hi, all the owners need to form a new association and  same has to be registered one and thereafter you have to take control of the affairs of the apartment. Better start a internal inquiry and ask the account holder to give proper accounts and if the association finds prima face mismanagement then you need to lodge police complainant.

Pradeep Bharathipura
Advocate, Bangalore
5604 Answers
335 Consultations

4.5 on 5.0

  1. Without registered membership the association is illegal. It without any legal sanctity. The association has to right to regulate the business of association.
  2. With bylaws association cannot function.
  3. Builder is bound to hand over all title deeds to respective owners.
  4. Pervious has lost right to operate bank account.
  5. It amounts to fraud and misappropriation of property for which the members are liable under Section 406 of Indian Penal Code, 1860 for which  punishment is imprisonment up to three years.
  6. Even one rupee cannot be spend without accounting for.

The total transaction is illegal. If the association is registered, make a complaint the Deputy Registrar of societies giving all details to criminal acts. If it is not registered, any one of the flat owners can file a criminal case in the Court of Magistrate under Section 406. The association is in Hyderabad you need to file criminal case in the Criminal Court at Nampally, it is in Secunderabad, it has to filed in Secunderabad Court.

Ravi Shinde
Advocate, Hyderabad
4042 Answers
42 Consultations

5.0 on 5.0

this is a fit case for applying to your jurisdictional registrar of co-operative societies for appointment of an administrator to whom the management of the society would be handed over till the time a proper managing committee is set up for handling the day to day affairs of the society

Yusuf Rampurawala
Advocate, Mumbai
7510 Answers
79 Consultations

5.0 on 5.0

If the association is not functioning as per the bylaws and lot of such irregularities are observed, then you gather all other members  and place a demand to the association to convene an extra ordinary general meeting urgently to discus ll the issues observed now by you keeping that as an agenda to the meeting. 

If the association declines to accept the request you may all submit a complaint jointly to the registrar of societies about this and seek to sack the committee members and conduct an election afresh to elect new members as per law. 

Once new body is elected then you can ensure the association to function as per the bylaws properly. 

If the association is not a registered body then you may approach court of law with a suit for injunction to restrain  them from functioning as office bearers of the unregistered association due to their mal practice and other fraudulent activities. 

T Kalaiselvan
Advocate, Vellore
84913 Answers
2195 Consultations

5.0 on 5.0

Dear Client,

It is mandatory to have a registered membership and a by-law of the association to function. Without which, the functioning shall be considered illegal.

It is also important to note that the builder is legally bound to hand over the documents to the owners of the respective flats.

Once the flat has been sold to a new owner, the previous owner shall have no right over the bank account of the association.

In such circumstances, it is advisable to send a legal notice to the heads of the association to organize a general meeting. In case of any failure to act according to the situation on the Association's end, you may file a complaint under Section 406 IPC. You may also file a complaint at the office of the Registrar of Societies, and claim for injunction or relief from damages against such fraudulent activities.

Thank you.

Anik Miu
Advocate, Bangalore
8872 Answers
110 Consultations

4.7 on 5.0

- As per law, RWA/apartment association is a voluntary organization set up from among the elected members of a housing society and is re-elected every year, or after a set period decided by the general body of the RWA through a voice vote.

- Further, since association is a legal body, registered under the Societies Registration Act, 1860, hence one can sue against its function, if not performing well.

- Further as per rule of the Societies Registration Act, any society registered under this act may sue or be sued in the name of the president, chairman or the principal secretary or trustees, as determined by the rules and regulations of the society and, if no such posts have been established, then in the name of the person appointed by the governing body of the RWA for the occasion.

- Further, as per the rules of the Societies Registration Act, any member or non-member can file a complaint.

- Further, the Registrar of Societies is bound to take action against the errant RWA on a legitimate complaint.

- Hence, you can file a complaint to the Registrar of Societies after narrating your concern against the existed RWA.

- Further, a RWA/housing society can be dissolved also, if the RWA fails to meet its objectives, involvement in illegal acts, inadequate number of members, ceasing of functioning over a period of time, contravention of law, or irreconcilable dysfunction.

- It can be dissolved by a) its members b) the Registrar c) the Court or d) the Government. 

- A number not less than three-fourths of the members of any RWA/society may determine that it shall be dissolved, then an RWA can be also dissolved. 

Mohammed Shahzad
Advocate, Delhi
13219 Answers
198 Consultations

5.0 on 5.0

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