Chapter IV Chapter IV

(1) There shall be an Association of Apartment Owners for the administration of the affairs in relation to the Apartments and the property appertaining thereto and for the management of Common areas and facilities— Provided that where any area has been demarcated for the construction of multistoried buildings, whether such area is called a block or pocket or by any other name, there shall be a single Association of Apartment Owners in such demarcated area. (2) The Competent authority may, by notification in the Official Gazette, frame model bye-laws in accordance with which the property referred to in sub-section (1) shall be administered by the Association of Apartment Owners and every such Association shall, at its first meeting, make its bye-laws in accordance with the model bye-laws so framed, and in making its bye-laws the Association of Apartment Owners shall not make any departure from, variation of, addition to, or omission from, the model bye-laws aforesaid except with the prior approval of the Competent Authority and no such approval shall be given if in the opinion of the Competent Authority, such departure, variation, addition or omission will have the effect of altering the basic structure of the model bye laws framed by him. In case the Competent Authority has not framed model bye-laws, the Association of Apartment Owners shall frame bye-laws in accordance with Section 23.3. (3) The model bye-laws framed by the Competent Authority or the bye-laws framed by Association of Apartment Owners incase no model bye-law is framed under sub-section (2) it shall provide for the following, among other matters namely - (a) the manner in which the Association of Apartment Owners is to be formed; (b) the election from among Apartment owners, of a Board of Management by members of the Association of Apartment Owners; (c) the number of Apartment owners, constituting of a Board, the composition of the Board and that one-third of members of the Board shall retire annually; (d) the powers and duties of the Board; (e) the honorarium, if any, of the members of the Board; (f) the method of removal from office of the members of the Board; (g) the powers of the Board to engage the services of a Manager; (h) delegation of powers and duties of the Board to such Manager; (i) method of calling meetings of the Association of Apartment Owners and the number of members of such Association who shall constitute a quorum for such meanings; (j) election of a President of the Association of Apartment Owners from among the Apartment owners, who, shall preside over the meetings of the Board and of the Association of Apartment Owners; (k) election of a Secretary to the Association of Apartment Owners from among the Apartment owners, who shall be ex-officio member of the Board and shall keep two separate minutes books, one for the Association of Apartment Owners and the other for the Board, pages of each of which shall be consecutively numbered and authenticated by the President of the Association of Apartment Owners, and shall record, in the respective minutes books, the resolutions adopted by the Association of Apartment Owners or the Board, as the case may be; (l) election of a Treasurer from among the Apartment owners, who shall keep the financial records of the Association of Apartment Owners as also of the Board; (m) maintenance, repair and replacement of the Common areas and facilities and payment therefore; (n) manner of collecting from the Apartment owners or any other occupant of Apartments, share of the Common expenses; (o) resignation and removal of persons employed for the maintenance, repair and replacement of the Common areas and facilities; (p) restrictions with regard to the use and maintenance of the Apartments and the use of the Common areas and facilities, as may be necessary to prevent unreasonable interference in the use of each Apartment and of the Common areas and facilities by the several Apartment owners; (q) any matter which may be required by the Competent Authority to be provided for in bye-laws for the proper or better administration of the property; (r) such other, matters as are required to be, or may be provided for in the bye-laws; (4) The bye-laws framed under sub-section (2) may also contain provisions not inconsistent with this Act for the following:- (a) enabling the Board to retain areas of the building for commercial purpose and to grant lease of the areas so retained, and to apply the proceeds of such lease for the reduction of the Common expenses for maintaining the building, Common areas and facilities, and if any surplus is left after meeting such expenses, to distribute such surplus to the Apartment owners as income; (b) relating to the audit of the accounts of the Association of Apartment Owners and of the Board, and of the administration of the property; (c) specifying the times at which and the manner in which annual general meetings and special general meetings of the Association of Apartment Owners shall be held and conducted; (d) to specify the time at which and the manner in which, the annual report relating to the activities of the Association of Apartment Owners shall be submitted; (e) to specify the manner in which the income derived and expenditure incurred by the Association of Apartment Owners shall be dealt with, or as the case may be, accounted for

(1) The Board or Manager - (a) shall have, if requested so to do by a mortgages having a first mortgage covering an Apartment, the authority to, and (b) shall, if required so to do by the bye-laws or by a majority of the Apartment owners, obtain insurance for the property against loss or damages by fire or other hazards under such terms and for such amounts as shall be so requested or required. (2) Such insurance coverage shall be written on the property in the name of such Board or Manager as trustee for each of the Apartment owners in the percentages specified in the bye-laws. (3) The premium payable in respect of every such insurance shall be Common expenses. (4) The provisions of sub-section (1) to (3) shall be without prejudice to the right of each of the Apartment owner to insure his own Apartment for his benefit.

If within sixty days of the date of damage or destruction to all, or part of any property, or within such further times as the competent authority may, having regard to the circumstances of the case, allow, the Association of Apartment Owners does not determine to repair, reconstruct or re-build property, then, and in that event— (a) the property shall be deemed to be owned in Common by the Apartment owners; (b) the undivided interest in the property owned in Common which shall appertain to each Apartment owner, shall be the percentage of the undivided interest previously owned by such owner in the Common areas and facilities; (c) any incumbencies affecting any of the Apartments shall be deemed to be transferred in accordance with the existing priority to the percentage of the undivided interest of the Apartment owner in the property; (d) the property shall be subject to an action for partition at the suit of any Apartment owner in which event the net proceeds of sale together with the net proceeds of the insurance on the property, if any, shall be considered as one fund and shall be divided amongst all the Apartment owners in the percentages equal to the percentage of undivided interest owned by each Apartment owner in the property after paying out, all the respective shares of the payment by the owners to the extent sufficient for the purpose and all charge on the undivided interest in the property owned by each Apartment owner.

(1) Without prejudice to the rights of any Apartment owner, action may be brought by the Board or Manager, in either case in the discretion of the Board on behalf of two or more of the Apartment owners as their respective interest may appear, with respect to any cause of action relating to the Common areas and facilities or more than one Apartment. (2) The service of process on two or more Apartment owners in any action relating to the Common areas and facilities or more than one Apartment may be made on the person, designated in the bye-laws to receive service of process.

(1) Notwithstanding anything to the contrary contained in any law relating to local authorities, each apartment and its percentage of undivided interest in the common areas and facilities appurtenant to such apartment (including an apartment in respect of which the provisions of this Act were applied under the proviso to Section-2) shall be deemed to be separate property for the purpose of assessment of tax on lands and building livable under such law and shall be assessed and taxed accordingly, and for this purpose a Local Authority shall make suitable regulations to carry out the provisions of this section. (2) Neither the multi-storey building nor the property nor the common areas and facilities referred to in sub-section 27.1, shall be deemed to be separate properties for the purpose of the levy of such taxes.

All sums assessed by the Association of Apartment Owners for the share of the Common expenses chargeable on any Apartment shall be first charge on such Apartment for the payment of Municipal rates and taxes prior to all other charges, except other statutory charges.

The purchaser of the Apartment shall be jointly and severely liable with the vendor for all unpaid assessment against the latter for his share of the Common expenses up to the time of sale.

If the Association of Apartment Owners, having right to be exercised by the Manager or the Board of Managers fails to perform its functions under this Act or the Rules made there under, the Competent Authority may give such direction as he may consider proper.

The State Government by notification in Official Gazette may make rules for carrying out the provisions of this Act.