• Can developer force their facility management (maintenance vendor) on the housing society?

Dear experts,

I have taken a residential plot in a gated community of 221 plots. The project contains swimming pool, clubhouse and other amenities and individual plot owners will construct their homes as they want.
This project is registered in Maharashtra RERA.

In the sale agreement, below part is mentioned:
lt is hereby clarified and the purchaser/s agrees and authorizes the Developer to appoint the first Facility Management Company in the project and post formation of the association / co-operative society / Iimited company for all the plot owners, as the case may be, the Developer will novate the facility management agreement("FM Agreement") in favor of the association / co-operative society / limited company for all the plot-owners, as the case may be and post expiry of the tenure of the FM Agreement, it shall have the option to either continue with the Facility Management company appointed by the Developer or appoint a new facility management company as it may deem fit.

Below part is mentioned in individual plot conveyance deed:
The Purchaser agree to execute maintenance agreement with the Facility Management Company as and when called upon by the Developer/ Facility Management Company. The Facility Management Company shall also be entitled, to collect the common area maintenance charges, maintenance de The Purchaser/s hereby grants his/her/their/its unequivocal and unconditional consent confirming such agreement /contract / arrangement that the Developer has or may have to enter into with the Facility Management Company (“FM Agreement”). It is hereby clarified and the Purchaser/s agrees and authorizes the Developer to appoint the Facility Management Company for the Project and post formation of the society/ association / apex body/common organization, as the case may be, the Developer will novate the FM Agreement in favor of the society / association / Apex Body/Common Organisation, as the case may be. Post expiry of the tenure of the FM Agreement, the society/association/apex body/common organization, as the case may be, shall have the option to either continue with facility management company or appoint a new company, provided that prior written consent of all purchasers in project is obtained for any discontinuation/non renewal.

Developer is forcing the use of their company (godrej living) for maintenance of society.
1. Can the developer force the society to be maintained only by Godrej living? Does RERA allow such clauses?
To discontinue, written consent of all owners is required, is this even legal? This is practically not feasible.
2. Pl suggest the future course of action here, after 1 year is we want to discontinue what can be done by the committee? This is also true when they're charging unreasonable amounts
3. Conveyance is still pending, will RERA be able to help us here removing these clauses?
Asked 1 year ago in Property Law
Religion: Hindu

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14 Answers

No he can’t you can file complaint in consumer court for deficiency of service and even Dy registrar office

you can get other vendor quotation and take majority members consent and discontinue 

no it’s better you approach consumer court

Prashant Nayak
Advocate, Mumbai
31951 Answers
179 Consultations

4.1 on 5.0

Call annual general meeting or special general meeting of all members 

 

2) place issue on agenda of meeting 

 

3) in AGM or SGM pass resolution for discontinuation of facility management services 

 

4) terminate the contract of facility management services 

 

5) managing committee cannot discontinue services of Facilirt management company 

Ajay Sethi
Advocate, Mumbai
94720 Answers
7532 Consultations

5.0 on 5.0

1. RERA has nothing to do with the agreement entered by the developer in this regard.

RERA cannot interfere in this issue.

This matter is to be decided by the society in the next general body meeting.

You can add this as agenda in the next meeting.

2. The decision to discontinue this facility can be decided by all the members in the general meeting or an extra meeting in this regard.

3.  If the developer is creating problem for conveyance due to this matter can be taken up with RERA as a complaint against the developer.

 

T Kalaiselvan
Advocate, Vellore
84921 Answers
2195 Consultations

5.0 on 5.0

it is not possible that all flat owners will agree to discontinue their services 

 

all decisions have to be taken by majority vote 

Ajay Sethi
Advocate, Mumbai
94720 Answers
7532 Consultations

5.0 on 5.0

The association in its meeting should decide about continuing it or to discontinue it by passing a resolution to this effect. 

T Kalaiselvan
Advocate, Vellore
84921 Answers
2195 Consultations

5.0 on 5.0

1. that part of the clause by which the purchaser authorizes the developer to appoint a FMC of his choice is ok

2. even if the society is formed and the tenure of the FMC has still not ended, the developer's right to novate the FMC agreement with the society is also fine, because the society is nothing but an agglomerate of plot purchasers

3. however once the society is formed and the tenure of the FMC has expired, then the developer has no business to dictate as to how and in what manner the FMC should be continued or renewed

4. once the FMC tenure is completed, the society will then be at liberty to appoint a new FMC by calling a meeting of its members and by passing a resolution for appointment of a new FMC or for continuing with the same FMC, by majority votes casted by the members who are present in the meeting and entitled to vote

5. so to the aforesaid extent the clause which is reproduced by you in your query tantamounts to a blanket consent and is liable to be ignored

6. you need not approach RERA for this. the developer or the FMC appointed by the developer can under no circumstances dictate terms to the society for appointing a new FMC or renewing the contract with existing FMC, once the term of the developer appointed FMC has expired 

Yusuf Rampurawala
Advocate, Mumbai
7512 Answers
79 Consultations

5.0 on 5.0

The present situation is related to the internal society matter thus, RERA is out of the picture. As every co-operative society has a annual general meeting for deciding up on such issues you can put this before the members of the society by including this in the agenda and decide to vote out the Facility. 

 

Aayushi Jain
Advocate, Ahmedabad
8 Answers

Not rated

as stated you can go with the majority if still society obstructs you can file complaint to Dy registrar or consumer court 

Prashant Nayak
Advocate, Mumbai
31951 Answers
179 Consultations

4.1 on 5.0

If all the 221 unit owners have already signed the conveyance deed containing the clause that Godrej living will maintain the society, and the conveyance has been executed, then the unit owners will have to abide by the terms and conditions mentioned in the deed. However, if the conveyance is still pending, the unit owners can request the developer to modify the clause to provide them with the option to choose their own maintenance agency.

 

B. As per Section 11(4) of the Maharashtra Real Estate (Regulation and Development) (Registration of Real Estate Projects, Registration of Real Estate Agents, Rates of Interest and Disclosures on Website) Rules, 2017, the promoter or developer is not authorized to impose any restriction on the association of allottees, in the matters related to maintenance and transfer of the association, after the formation of such association or society or federation of such associations or societies.

 

Therefore, the developer cannot force the society to be maintained only by Godrej living, and such a clause is not allowed under RERA. If the developer is charging unreasonable amounts for maintenance, the committee can raise the issue with the developer or file a complaint with the RERA authority.

 

C. If the conveyance is still pending, the unit owners can raise their objections to the clause regarding the maintenance agency and request for its modification. Once the conveyance is executed, it becomes legally binding on all parties, and any modifications can be made only with the mutual agreement of all parties involved. However, if the clause is found to be in violation of RERA rules, the unit owners can approach the RERA authority for necessary action.

 

 

 

Anik Miu
Advocate, Bangalore
8879 Answers
110 Consultations

4.7 on 5.0

1. The society has to act on the basis of the resolution passed by majority members in a special or general meeting 

2. The society has got powers to act in the interest of the members of the society.

The society has been formed for the welfare of its members hence society cannot act against the interest o its members.

If the majority members decide on any subject matter then it is the society which has to enforce or implement the decision of the majority members.

3. The society cannot put its own decision when the bylaws do not permit so.

4. The society will be governed by the laws framed by the cooperative societies act.

 

T Kalaiselvan
Advocate, Vellore
84921 Answers
2195 Consultations

5.0 on 5.0

Law will be more weightage then the deed 

Prashant Nayak
Advocate, Mumbai
31951 Answers
179 Consultations

4.1 on 5.0

You are at liberty to remove Godrej living by majority vote . 

2) in case Godrej challenges the decision take the plea that issue was placed on agenda of AGM and decided by majority vote 

 

3) it is not possible for all 221 members to attend AGM and vote .clause will not stand legal scrutiny 

 

4) ask Godrej to delete clause in conveyance deed . If they refuse take legal proceedings to direct Godrej to execute conveyance deed 

 

5) societies act and state laws prevail 

Ajay Sethi
Advocate, Mumbai
94720 Answers
7532 Consultations

5.0 on 5.0

Same question is being asked in different way 

Also no two lawyers will give you the same response 

Once the term of godrej's appointed FMC has expired it CANNOT foist itself on the society and its members 

Its upto the society to renew or not to renew Godrej's FMC's contract by passing a resolution in a meeting of its shareholders by majority 

There is no need to take consent of each and every society member/plot purchaser 

To repeat , that part of the agreement for sale and conveyance which says that consent of all purchasers is needed to not renew Godrej's FMC's contract or to appoint a new FMC, is illegal and is a blanket consent and not binding on the purchasers and society 

Other follow up questions are framed in different ways for asking the same very thing which is asked in the main query. So those are not being separately replied as the reply to the same will be the same as above. It's so irritating that when answers are given in clear and unambiguous manner, despite that same thing is being asked again and again in different ways !

Yusuf Rampurawala
Advocate, Mumbai
7512 Answers
79 Consultations

5.0 on 5.0

Dear client,  

If all 221 members have signed the conveyance deed containing the clause and later the society calls AGM and on majority vote decide to remove Godrej Living, it would be legal as long as the society follows the legal procedures and obtains the required majority for the resolution to be passed. However, Godrej Living may challenge the decision in court and seek appropriate legal remedies if they feel that their contractual rights have been violated.

Written consent of all 221 members to remove Godrej Living may not be necessary if the society follows the legal procedures for passing a resolution to remove Godrej Living. The exact requirements for passing such a resolution may vary depending on the laws applicable to the society, but generally, a simple majority vote of the members present and voting at the AGM should be sufficient.

If the society decides not to go ahead with the conveyance deed, they may need to negotiate with Godrej Living to amend the terms of the agreement or to terminate the agreement altogether. If the society goes ahead with the conveyance deed and Godrej Living challenges it in court, the society may need to defend the legality of the agreement and the removal of the clause, and may need to seek appropriate legal remedies if their position is challenged.

The provisions of the Maharashtra Co-operative Societies Act and other relevant state laws would apply to the society's actions, but the terms of the conveyance deed would also be legally binding on the parties who signed it. In case of conflicts between the two, a court would need to determine which provision takes precedence based on the specific facts and circumstances of the case.

 

 

Anik Miu
Advocate, Bangalore
8879 Answers
110 Consultations

4.7 on 5.0

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