Introduction:
The Tamil Nadu Apartment Ownership Act, 1994 (“the Act of 1994”) was enacted by the State Legislature, keeping in view that the ownership and control of the material resources of the community must be distributed in such a way that it sub-serves a common good. In order to achieve this, it was imperative for the act to confer upon the apartment owners, ownership rights in the individual apartment in the apartment building and a proportionate undivided share in the common areas and facilities appurtenant to the apartment building. The Act applies to all buildings having more than four (i.e. 5 or more apartments) or more than two floors (i.e. Three or more floors). The building can be used for residence, office, or carrying any occupation, business or trade. The Act also provides that there shall be a society or Association of Apartment Owners (“AOA”) for the maintenance of common areas and facilities in the Project and for providing amenities to the apartment owners and for doing such other things as are incidental in the attainment of objectives stated in the Bye-Laws. The Act of 1994 inter-alia provides for regulating the following w.r.t. to an apartment and apartment condominium:
- ownership, heritability and transferability of the apartments in Tamil Nadu.
- various interests of apartment owners in the common areas and facilities.
- responsibility and duties of apartment owners towards each other.
- right to create encumbrances on apartments by its owners.
- mode and requirement for execution and registration of the conveyance/ deed of apartment.
- methods of management of common areas and facilities through apartment owners association.
- regulation of apartment owners association.
- common profits, common expenses and other related matters.
Formation of Association of Apartment Owners (AOA)
Unlike the other contemporary Apartment Acts of different states, the Act of 1994 provides multiple options for the apartment owners to form their association. As per the Tamil Nadu Apartment Ownership Act, within 3 months from the date the Deeds of Apartments are executed and registered under the Act, the apartment owners can either form a society under the Tamil Nadu Co-operative Societies Act, 1983, or under Tamil Nadu Societies Registration Act, 1975. The Apartment Owners are also given the liberty to form an Association of Apartment Owners (“AOA” or “Association”) which can either be registered under the 1975 Act or the 1983 Act. It appears that the legislature intends that the apartment buildings developed by any registered cooperative society be maintained by an association/ society registered as a cooperative society only whereas the apartment buildings constructed by any other person should be maintained by an association or society registered under the 1975 Act.
That as per the Act, the minimum requirement for forming such an AOA or society is five (5) members. Therefore, a minimum of five apartment owners can form an association or society and get the same registered under either Tamil Nadu Societies Registration Act, 1975 or Tamil Nadu Co-operative Societies Act, 1983. The Association/Society so formed shall administer the property in accordance with the bye-laws framed by it. Moreover, it shall be the duty/obligation of the Society/AOA to file the same with the competent authority. Such an AOA / Society so formed shall maintain the common areas and facilities in the Project, shall provide amenities to the apartment owners, and shall be doing such other things as are incidental in the attainment of objectives stated in the model Bye-Laws provided under the Act.
It is pertinent to highlight that the Apartment Act or the rules made therein nowhere mention that the Builder/Promoter shall hand over the Common areas and facilities to the Association and the legislature has directly conferred the right upon the apartment owners to form such an association and thereafter maintain the common areas and facilities.
Members of the Association
The society/association formed under the Apartment Act is formed for the benefit of all the apartment owners and as per the Act of 1994 every owner is entitled to become a member automatically and is entitled to enjoy all common facilities and perform his corresponding duties. Upon becoming a member of the society/association so formed under the Act, the apartment owner shall pay the fee as specified.
In the case of Cosmo Towers Owners’ Association Vs. Chennai Metropolitan Water Supply and Sewerage Board and Ors. [2009 SCC OnLine Mad 957], the Petitioner AOA formed under the Act was not letting some apartment owners to be a part of the AOA, Hon’ble Madras High Court while deciding the issue held that the “contention of the learned counsel for the petitioner is that the by-laws of the petitioner Association gives discretion to the association to permit or not to permit any apartment owner to become a member, cannot be accepted as the same is contrary to the Act, Rules and model by-laws and in view of the fact that only one society/association can be formed for an apartment and every apartment owner automatically becomes a member of that Society/association. Thus, the action of the petitioner Association in not permitting respondents 3 and 4 to become members, who are also apartment owners of “Cosmo Towers” is illegal and it is a statutory violation.”
Therefore the AOA/society does not have any right to permit or not permit any apartment owner to become a member of the AOA/ Society.
What constitutes Common Areas and Facilities?
The term common areas and facilities has also been defined by the Act of 1994, which states that unless otherwise provided in the deed of declaration the term common area and facilities shall mean:
(1) the land on which the building is located;
(2) the foundations, columns, girders, beams, supports, main walls, roofs, halls, corridors, lobbies, stairs, stairways, terrace, compound walls, fire escapes, wells, and sumps and entrances and exits of building;
(3) the basements, cellars, yards, gardens, parking areas and storage spaces;
(4) the premises for lodging of caretakers or persons employed for the maintenance of the property;
(5) Water supply, sewerage and drainage connections and the installations of central services such as power, light, gas, hot and cold water, heating, refrigeration, air-conditioning and incinerating;
(6) the elevators, tanks, pumps, motors, fans, compressors, ducts and in general all apparatus and installations existing for common use;
(7) automatic fire detecting and alarm facilities necessary to warn the occupants of the property of the existence of the fire;
(8) such other community and commercial facilities as may be prescribed; and
(9) all other parts of the property necessary or convenient to its existence, maintenance and safety, or normally in common use;
As per the Act of 1994, every apartment owner is entitled to a percentage of undivided interest in the common areas and facilities. Such interest in the common areas and facilities provided to the apartment owner shall be specified in the Deed of Apartment. The percentage of the undivided interest of the apartment owner in the common areas and facilities shall be calculated by dividing the plinth area of the apartment unit allotted to the apartment owner by the total extent of the plinth area available in the building. The term plinth area is nowhere defined in the Act of 1994. The plinth area of the apartment can also be defined as the built-up area of the apartment which includes the total carpet area including the floor area occupied by the internal and external walls.
The undivided interest of the apartment owner in the common area has a permanent character and the same cannot be altered without the consent of all the apartment owners. In the case of P. Sivanesan and others Versus Tamil Nadu Housing Board and Ors. [2013 SCC OnLine Mad 3822], allottees of residential flats in the Housing Scheme called “Belly Area Housing Scheme” were utilizing the Garage Area located along the residential flats for parking purposes. The Housing Board decided to allot the Garage Area to third parties and directed allottees to vacate the Garage. The conversion of Garage Sites into commercial/residential use had already been approved by the Housing Board and Planning Permission was also obtained from the Chennai Metropolitan Development Authority. Challenging the impugned Letters, the allottees filed the Writ Petition and contended that the Garage was always used as common area for parking and therefore, alleged that the conversion of the user of the lands by the Respondents is illegal and contrary to the Scheme. While answering to the reference that if the Respondents are entitled to impose any restriction in the Sale Deed and retain ownership over a portion of an undivided share of land It was held by the hon’ble Madras High Court that “the Respondents are entitled to impose any restriction in the Sale Deed and retain ownership over a portion of undivided share of land” and further held that “the area earmarked as Garage is part of the undivided share of land conveyed under the Belly Area Scheme and that the restrictions are illegal and void, the Respondents are not entitled to convert the user of the land and hence, the Writ Appeals are allowed. The Respondents are directed to restore possession of the area earmarked as Garage to the Belly Area Scheme Welfare Association, within a period of two weeks from the date of receipt of a copy of this Order.”
In the case of C.B.S. Property Development Pvt. Ltd. Vs. P.V.S. Raghupathy & Ors. [2015 SCC OnLine NCDRC 588] an appeal before the National Consumer Disputes Redressal Commission was preferred against the order passed by State Consumer Disputes Redressal Commission, Chennai wherein the State Commission ordered the appellant to vacate the premises in the basement area belonging to the Association and members thereof. The National Consumer Disputes Redressal Commission deciding the appeal held that as per the definition of common area and facilities as provided under the Tamil Nadu Apartment Ownership Act, basement is a common area and facility. Hence, petitioners have no right to allot the basement to an individual to set up his office or business establishment. Thus the appeal was dismissed by National Consumer Disputes Redressal Commission while imposing cost of Rs 10,000/- on the appellants.
In the case of State Bank of Travancore vs. The State of Tamil Nadu Ors. [2003 SCC OnLine Mad 713]the Hon’ble Madras High Court held that Section 6(2), provides that undivided interest in the common area shall not be altered without the consent of all the apartment owners. The percentage of undivided interest in the common areas and facilities shall not be separated from the apartment to which it is appurtenant and shall be deemed to be conveyed or encumbered with the apartment whether or not such interest is expressly mentioned in the covenant or other instruction. Section 3(3) provides that common areas and the facilities shall remain undivided and no apartment owner or any other person shall bring any action for partition or deviation of any part thereafter and any covenant to the contrary shall be null and void and under Clause 4, the facilities provided under common area meant for the use of the apartment owners in accordance with the purpose for which they are intended without hindering or encroaching upon the lawful rights of the apartment owners. Therefore, the area shown as car park in the sanctioned plan cannot be altered either by the flat owners or by any other person including the vendor who had retained a portion of the undivided share only in the land on which the flat was put up.”
What is the Process of the handover of maintenance from the Builder to the AOA?
As mentioned earlier the Act of 1994 is silent on the aspect of taking handover from the Promoter/Builder of the project. Therefore, once the apartment owners form a society or AOA and get the same registered with the competent authority, should approach the Promoter to take the handover of the common areas and facilities. However, in case the Promoter is not keen to give the handover of the Project to the society/AOA, the society/AOA can deploy its duly appointed agencies to do the maintenance. In case any dispute arises with the Promoter in deploying the staff by the AOA, an appropriate remedy of preventive restraint etc. against the Promoter can be sought by the AOA from the District Collector/ Magistrate under the Code of Criminal Procedure, 1973. Civil Court can also be approached by the AOA for an interim as well as permanent injunction against the promoter. The AOA/society shall be within its statutory limit if it appoints new vendors for various services like security, housekeeping, book maintenance, etc. soon after its registration. It can remove the vendors/agencies appointed by the Promoter.
In the case of Rayala Tower Owners’ Association Vs. Vira Properties (P) Ltd. [2010 SCC OnLine Mad 507]an appeal was filed by the association before Hon’ble Madras High Court against the orders of a single judge whereby the learned judge dismissed the Interim Application filed by the association seeking an injunction, restraining the respondent company from interfering with the association’s right to carry out the maintenance and upkeeping of the property. The Association was formed in the year 2000 and was registered in 2001 with the view to protect and promote the interest of the allottees. Since 2001 the Association was taking care of the maintenance of the common areas and facilities. However, in the year 2003, the respondent began to dig up a portion in the common area, and following the same the association filed a suit. The Hon’ble Madras High Court deciding upon the issue held that, “in the instant case, the relief sought for by the plaintiff/appellant-Association in the Interlocutory Application, pending the Suit, is to carry on the maintenance and upkeeping of the property. It is not in controversy that from the year 2001, when the Association came into existence, the members of the Association were carrying on the upkeeping and maintenance of their respective portion of the apartments, and even on this day, the Association has been carrying on the same. Under such circumstances, the Court is of the opinion that what is now being carried on by the Association should not be disturbed.”
Competent Authority under the Act
As mentioned above the society/AOA can either be registered under the Tamil Nadu Societies Registration Act, 1975, or Tamil Nadu Societies Registration Act, 1975. In case the AOA/Society is registered under the Registration Act, the Registrar defined under the Tamil Nadu Societies Registration Act, 1975 shall be the competent authority, and if in case the society/AOA is registered under the Co-operative Societies Act then the Regional Deputy Registrar of Co-operative Societies (Housing) shall have the jurisdiction and will be the competent authority.
In the case of Cosmo Towers Owners’ Association Vs. Chennai Metropolitan Water Supply and Sewerage Board and Ors. [supra], it was held by the Hon’ble Madras High Court that the AOA/ society is not entitled to disconnect the water supply and drainage fee. In case the apartment owner does not pay such charges then for recovery of the same the AOA/society can only take steps to recover the amount in accordance with the law laid in section 20 of the Apartment Act which states that in case the apartment owner fails to make the payment of common expenses such can be charged against his property.
In case there is any statutory violation, it is open to the Association/Society to agitate its rights in the matter as well as approach the issue before the appropriate competent authority.
Can the AOA/society raise additional construction in the Project?
When the Promoter executes the sale deed/deed of apartments in favour of allottees, the same becomes property of the allottees, and they become entitled to demolish the existing superstructure and put up new Apartment Blocks with additional dwelling units and sell the same to the third parties without obtaining No Objection Certificate from the Promoter, as long as the construction is within the parameters of the Rules and Regulations of the Development Authority. This can be done by the Society/AOA formed by the allottees. The land on which the building consisting of the Flats is raised shall vest with the Society/AOA and the Society/AOA shall hold the land jointly on behalf of all its members to protect their rights and privileges. The land shall not vest with the Promoter once the same is sold in favour of the allottees.
In Tamil Nadu Housing Board Vs. Mary Rani Immanual and Ors., [2013 SCC OnLine Mad 1503], Tamil Nadu Housing Board, was a developer of a group housing Project and filed the appeal against the orders of single bench of the Hon’ble Court in the Writ Petitions whereby the Hon’ble High Court directed the Corporation Authorities to grant approval to the allottees for demolition of the existing structure in the Project without insisting for a No Objection Certificate from the Developer. The Hon’ble Madras High Court deciding over the issue held that “some areas have been earmarked for the common enjoyment of the Flat owners. The common areas have to be enjoyed in common by the Flat owners and if a consensus is arrived at by all the Flat owners, they can utilize the common land also to put up construction without ‘No Objection Certificate’ from the Tamil Nadu Housing Board. The various provisions extracted from the Tamil Nadu Apartment Ownership Act, 1994 will amply establish that if all the Allottees who have formed the Society or Association decides to pull up the existing structure and raise a new construction with additional dwelling units even in the common areas, they can do so, provided such construction is in consonance with the Rules and Regulations of the CMDA.”
The Hon’ble court while deciding the case also held that “if there can be an increase in the number of dwelling units/Flats, equally new Apartment blocks with larger built up area can also be put up, subject to the approval of all the Allottees who have joined together to start a Society or an Association and if it is not in violative of the Rules and Regulations of the CMDA.”
Therefore, it becomes very clear from reading the above that the allottees cannot just demolish the existing construction and raise additional construction but the new flats being built by the AOA/Society can be more in number than the previously existing flats and the same can have larger built-up area than the previous ones. The only restriction is that the same must not be violative of the rules and regulations of the Development Authority. However, there cannot be any demolition of the existing Flats and construction of new Flats without the concurrence or acceptance of all the Allottees or the Subsequent Purchasers of the said block where there is a proposal to demolish the existing superstructure and put-up new construction.
Bye-Laws of the Association
The Act of 1994 states that the administration of every property shall be governed by the bye-law so drafted by the AOA/ society and shall provide for the matters given under the Act. A true copy of the same shall be filed with the competent authority. In case there is an amendment in the bye-laws, then the true copy of the amended bye-laws has to be submitted to the Competent Authority and without it, the same shall not be valid. The amendment shall come into effect from the date specified in the Bye-laws and in case there is no date mentioned in the bye-laws the same shall come into effect from the date the true copy was submitted with the competent authority mentioned above. The Bye-Laws framed by the Petitioner Association can operate subject to the provisions of the Act and Rules and the Model By-Laws.
Conclusion:
The object of enacting the Tamil Nadu Apartment Ownership Act, 1994 and Rules is to provide for ownership, transferability and heritability of apartments in a building along with appurtenant common areas and facilities and for maintenance thereof for the formation of apartment owners association to promote harmony among the owners of apartments so that the apartment owners can share the common facilities without causing any hindrance to one another. The Association has to be created and registered within 3 months from the date the Deeds of Apartments are executed and a minimum of five apartment owners can form an association or society and get the same registered under either Tamil Nadu Societies Registration Act, 1975 or Tamil Nadu Co-operative Societies Act, 1983. All the apartment owners are entitled to become members automatically and are entitled to enjoy all common facilities. Further, every apartment owner is entitled to a percentage of undivided interest in the common areas and facilities and such interest in the common areas and facilities provided to the apartment owner shall be specified in the Deed of Apartment. The undivided interest of the apartment owner in the common area has a permanent character and the same cannot be altered without the consent of all the apartment owners. Moreover, once the society or AOA is formed and registered, the apartment owners should approach the Promoter to take the handover of the common areas and facilities. If the Promoter denies to handover of the Project to the society/AOA, the society/AOA can approach the respective Competent Authority as the same has the power to adjudicate over the issue. In case the AOA/Society is registered under the Registration Act, the Registrar defined under the Tamil Nadu Societies Registration Act, 1975 shall be the competent authority, and if in case the society/AOA is registered under the Co-operative Societies Act then the Regional Deputy Registrar of Co-operative Societies (Housing) shall have the jurisdiction and will be the competent authority. The administration of the Project by the AOA/society shall be governed by the bye-law so drafted by the AOA/ society. The Act further states that all agreements, decisions and determinations lawfully made by the society / AOA, as the case may be, in accordance with the provisions of this Act or the bye-laws shall be deemed to be binding on all apartment owners.
