Association of Apartment Owners and Bye-laws Relating Thereto

(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 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.
¹[(2) It shall be the joint responsibility of the promoter and the apartment owners to form an Association. The promoter shall get the Association registered when such number of apartments have been handed over to the owners which are necessary to form an association or 60 of apartments, whichever is more, by way of sale, transfer or possession, provided the building has been completed along with all infrastructure services and completion certificate obtained from the concerned local authority.
Provided that in case of an independent area or and independent commercial area the promoter may form a separate Association for its management, if required];
(3) In a case, where an association of the apartments owners of a building has not been formed, on the intended date of execution of a deed of apartment in favour of prospective apartment owner, it shall be obligatory for a prospective apartment owner to become member of the association within a period of 4 weeks on receipt of a written intimation about the formation of such association.
(4) Where an association of an apartment owners exist on the intended date of transfer of an apartment, it will be obligatory for the prospective apartment owner to become member of such association before execution of a deed of an apartment in his favour.
(5) On formation of the Association of the Apartment Owners under sub- section (2) above, the management of the affairs of the apartments regarding their common areas and facilities shall be deemed to be transferred from the promoter to the Association which shall thereupon maintain them,
Provided that till all the apartments are sold or transferred, the promoter shall proportionately share the maintenance cost of common areas and facilities.
²[Provided further that the amount collected by the promoter towards interest free maintenance security shall be transferred to the association at the time of handing over of the common areas and facilities];
(6) The Government may by notification in the gazette frame model bye-laws in accordance with which property referred to in subsection (1) shall be administered by the Association of Apartment Owners and the Association shall, at its first meeting, make its byelaws 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.
(7) The model bye-laws framed under sub-section (5) 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 the members of the Association of Apartment Owners;
(c) the number of apartment owners constituting the 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 of Apartment Owners;
(j) election of a President of the Association of Apartment Owners from among the apartment owners, who shall preside over the meeting 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 an ex-officio member of the Board and shall keep two separate minutes books, one for the Association of the 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 therefor;
(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 the 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.
(8) The bye-laws framed under sub-section (5) may also contain provisions, not inconsistent with this Act—
(a) enabling the Board to retain certain area of the building for commercial purposes 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) specifying 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) specifying 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.