Recovery of arrears: Common Maintenance Charges

Liability of dues of old owner of the apartment 1. There are provisions for realisation of the arrears either from the old owner or the new owner of the apartment. Please read the Section – 16 of the West Bengal Apartment Ownership Association, 1972: Liability for unpaid common expenses : Upon the sale of an apartment, the purchaser of the apartment shall be jointly and severally liable with the vendor for all unpaid assessments against the latter of his share of the common expenses upto the time of the sale. Commentary: Scope of the Section:- This Section has fastened liability for payment of unpaid common expenses both the vendor as well as the purchaser of the apartment after sale of apartment and such liability shall be joint and several. Both of them shall bear the said liability for all unpaid assessments against the vendor for his share of the common expenses up to the time of sale and will continue to subsist till the date of payment of such assessments. Thus, this Section safeguards the interest of all apartment owners so that one apartment owner cannot evade his liability by selling the property to a third person or even to an apartment owner of the same property. The use of word “sale” excludes other transfers as contemplated in Transfer of Property Act. Liability, joint and several:- So far as the joint and several liability is concerned, reference can be made to Section – 43 of the Indian Contract Act. 2. Please read also the Bye-laws – 28 of the West Bengal Apartment Ownership Act, 1972:- Sale of apartment to be notified to the Board:- An apartment owner who sell or otherwise transfers his apartment shall immediately notify the Board of the fact stating the name of the purchaser or transferee and his address. Similarly, the purchaser or transferee of the apartment shall immediately, apart from executing and registering an instrument in the form (FORM-A), as provided for in clause (ii) of sub-section (3) of Section – 4 of the West Bengal Apartment Ownership Act, 1972, notify the Board concerned about his ownership or interest, as the case may be, of the apartment in question. 3. Please say “common maintenance charges” instead common expenses fees etc or like that. Please read Section – 15. of the West Bengal Apartment Ownership Act, 1972 : Charge for property of common expenses:- All sums assessed by the Association of Apartment Owners for the share of common expenses chargeable to any apartment shall constitute a charge on such apartment prior to all other charges, except charge, if any, on the apartment for payment of municipal rates and taxes. Payment of common expenses and assessment of all other sums payable as charges: As per Section 3 (e) of the West Bengal Apartment Ownership Act 1972, “Common Expenses” means expenses of administration, maintenance, repair or replacement of the common areas and facilities and all other sums assessed against the apartment owners by the Association of Apartment Owners. Commentary: As this Act lays down the provision for formation of an Association and entrusts it with the powers and functions of administrating the property concerned, the Association is entitled to assess the expenses and all the sums for the administration of the property. The function of an Association as specified in clause (2) of the bye-laws 4 as well include for maintenance, repair and replacement of common areas and facilities of the property and payments thereof. Section 9 of this Act charges the Apartment Owners with the duty of paying the common expenses according to the percentage of undivided interest in the common areas and facilities. Section – 15 of the West Bengal Apartment Ownership Act 1972, defines the detail of charge for payment of common expenses as All sums assessed by the Association of Apartment Owners for the share of the common expenses chargeable to any apartment shall constitute a charge on such apartment prior to all other charges, except charge, if any, on the apartment for payment of municipal rates and taxes. Commentary: Scope of the Section: This section provides for the creation of a charge on the apartment for all dues assessed by the Association on account of share of the common expenses. This section is also intended to provide the facility to the Association for realization of all sums assessed on account of the share of common expenses as expenses for administration, maintenance, repair and replacement of common areas and facilities and all other sums assessed against any apartment by the Association. In addition to that and as we are facilitated to use the common areas and facilities against specific charges, for personal need and necessity as specified in the bye-laws, the arrear of dues as assessed by the Association on that account shall constitute the charge against that apartment. Non-payment of such dues will lead to be labelled as defaulter. Personal use of common areas and facilities for car parking or arranging social function etc, as permitted by governing body, is to be considered as “use of common areas and facilities for personal purpose against specific payment obeying the permission of Governing Body. Charge, meaning of --- This Act has not defined “charge” and as the provisions contained in this section are in no way inconsistent with the provisions contained in the Transfer of Property Act, the provisions in the latter Act will apply. Section 100 of the Transfer of Property Act dealing with “charge” provides as follows: - “When immovable property of one person is by act of parties or by operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions herein before contained which apply to a simple mortgage shall as far as may be apply to such change”. So, as far the above noted Section, a charge does not amount to a mortgage though all the provisions which apply to simple mortgage shall insofar as may be applicable to a charge which we are discussing. The word “charge” only gives the right to payment out of a particular property without transferring the property. A charge can be created either by act of parties or operation of law. Therefore, the word “charge” is only a security for repayment of money. “Charge” has got the legal power for enforceability against transferee also. Effect of this provision --- Section – 15 of this Act constitute merely a charge in express language upon such apartment and all assessed sums payable on account of share in common expenses including any other dues have been made prior charge to all other charges except Municipal taxes. This Section however contemplates creation of a charge by operation of law and as such it is a statutory charge. It is justified that an intending purchaser of any property in municipal area, where the property is subject to the municipal tax, which has been made a charge upon the property by statute, should have constructive knowledge of the tax and of the possibility of some arrears being due to the said property. If that intending buyer or transferee fails to make their enquiry, such failure amounts to a wilful abstention or gross negligence with the meaning of Section – 3 of the Transfer of Property Act and notice must be imputed to them. Similarly, it is also justified that an intending purchaser of any apartment, situated under the administration of the Owners Association, should have constructive knowledge of the possibility of some arrears being due against such property. If that intending buyer or transferee fails to make their prior enquiry with the Owners Association, such failure amounts to a wilful negligence from his part which cannot evade his liability on any dues. Conclusion: None so blind as those that will not see. *** Taken help from the book: Law of Ownership of Apartments/Flats in West Bengal by Tapas Kumar Mukherjee Compiled and Written by Subrata Banerjee, bukambabu@gmail.com