Formation of Apartment Association in Bengaluru
Formation of Apartment Association
We noticed most lawyers recommend the registration of the owner’s association under the Karnataka Societies Act. In fact, the Karnataka Societies Act is not the right law to register an apartment association. Section 3 of the Societies Act has a relevant definition applicable to apartment owners association.
The Karnataka Apartment Owners Act (KAOA) is the right law under which all apartment complex owners should register their association. Apartment, as defined in Karnataka, is a property of residential nature where the owner owns the apartment and holds a percentage of shares in the land and common areas and amenities.
There are two laws governing these matters in Karnataka.
- Karnataka Ownership Flats Act (KOFA) and
- Karnataka Apartment Owners Act (KAOA)
Three types of communities formed under Karnataka’s existing laws. In this, the third option seems to be better. This option envisaged in the KOFA is for the builder/promoter to form an association of owners under the KAOA.
KAOA requires the builder/promoter/owner of the apartment to execute a document known as the Deed of Declaration (DOD). This document describes the property (the building, all of its apartments and its common facilitates such as generators, fire fighting equipments, etc. along with the ownership scheme that lists the percentage share of each apartment.
- Deed of Declaration
- Copies of Plan approvals from local authorities.
- Byelaws of the Association of owners
When the individual apartment owner goes to register their Deed of Apartment to complete their sale, the KAOA requires that the Deed of Apartment refers to the DoD (Includes the registration of the DoD, such as registration number, date, sub registrar’s office etc.) so that the ownership scheme is fully traceable and the title is clear.
Registrars and sub registrars are also expected to meet certain special requirements by the KAOA to preserve and update the information in an organized manner. In addition to the Deed of an Apartment, the purchases are also need to execute a declaration known as Form B, where they agree to abide by the rules of the KAOA.
Once the apartments are sold and registered, the builder is required to approach the Registrar of the co-operative society (Identified as the competent authority by the KAOA) with copies of the registered Deed of Declaration, byelaws, Deed of Apartments, and Form B declaration to register the association. In case of unsold apartments, the builder/promoter is allowed to represent those unsold flats. This process completes the formation of the association. The bye laws registered with the DoD become the bye-laws of association and everything is set for smooth operation.