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Major contentious issues in Housing Society

1. Playing area for Children in the Society

Ordinarily most of the members have children to play in the compound, stilt, podium of the Society. Some members may reside all alone, some members may not have any children and some members may be of advanced age. Such disgruntled members may raise objections regarding the playing of the children in the Society’s areas like compound, stilt, and podium. To my mind such objections are of no importance at all as Children should be allowed fair play for their recreation, rejuvenation to reduce stress from their tight schedule. If a Society has a compound then naturally it should give permission to the members of children top play at regular period of time.

Bye Law No 168. Restriction on Playing Games: The meeting of the General Body of the Society may, after taking into consideration the location of the building or buildings of the Society and their surroundings and the open space available for playing games by the Members of the Society and their children, allow such games to be played during such hours as may be fixed by the meeting of the General Body of the Society and subject to such restrictions, charges and penalties as it may impose.

Now, if the children play cricket in the compound of the Society. Can few member/s object against that? Whether such objections are of importance?

Now if the children play cricket in the compound of the Society and the ball hits the glass window of the member, and as a result the glass window is broken, who could be held responsible for the same? The answer to the same would depend upon the policy decided at AGM. The Society has a right to penalize the child’s parents if a glass window is broken. It is rather difficult to point out the child who is responsible for the damage. However, once the blame is established the responsibility would lie with the child’s parents if the resolution to that effect is passed by the Society. It does happen that sometimes children do not play in the compound of the Society but instead start playing in the passage of the building as Society has not allowed them to play in Compound due to objection/s from few members. This would create more nuisances and hence it is best outdoor sports be allowed in Compound.

There is a judgment:

2. Non-payment of maintenance charges/ share of contribution in Housing Societies under any pretext

Monthly maintenance charges and contribution to various funds like Sinking, Repairs etc. are covered under Bye law Nos. 65 to 71 and they are well defined and thus very less chances of member having any issue as all these charges are approved at AGM. Nonpayment or delay would attract penal interest @21% p.a.under Bye law 71.

Whatever may be your grievances with housing society or managing committee, you should continue to pay monthly maintenance charges regularly. Nonpayment of Monthly maintenance could lead to you being declared as defaulter. If you have issue with any 1 or 2 item in the bill (which has been approved at AGM), you should have approached Registrar with your detailed complaint and try and obtain stay order until matter is resolved. If you have not taken any such steps, then you run the risk to be declared as defaulter and recovery proceedings could be initiated against you under section 101 (now new section 154B-29).

3. Flat Transfer related issues

Transfer of flat is covered in Bye Laws 38 to 40 and the process is well laid out. Once you complete the process, MC cannot object to transfer. What documents are to be submitted are clearly spelt out in Bye Law 38 (e) and ensure that you submit them.

There could be:

Ø Society is asking for transfer fees higher than Rs. 25,000/-

Ø Society is asking for donation over and above transfer fees of Rs.25,000/-

Ø Housing Society asking exorbitant amounts at the time of transfer of flat as a % to the gain transferor has made

As per By law No 38 & 39, read with circular dated August 9, 2001, issued by the government of Maharashtra, Housing Society cannot demand Transfer fees in excess of Rs.25,000/-. Seek the letter from Managing Committee for this demand and approach Registrar with your written complaint.

The Bombay High Court held that a society can collect funds, only by legally permissible charges or fees and is not expected to indulge in profiteering from the members. While there is no bar on paying donations to a society, it should be done without any compulsion or coercion and in no way, can the society charge transfer fees under the pretext of donation.

As regards Transmission of Flat upon death of member, nominee should complete all the process indicated in Bye Laws 34 to 37 and no transfer fee can be collected by Housing Society as this not a transfer due to sale.

4. Managing committee Elections/Office Bearers/Their Conduct – Fraud/ Embezzlement

There are set rules as regards Election (held every 5 years) and MC deciding office bearers. There are also provisions in MCS Act, Rules & Bye laws as regards disqualification a member to contest the election or remain as a MC member. If you have issues with a MC member or Committee then try and find their faults and understand it’s relevance for Registrar to declare them as ‘Defaulter” and ban them from any role in MC. As regards Frauds or Embezzlement, there are set process for this. First approach MC with your contentions along with documentary proofs failing which approach Statutory Auditor with a written complaint failing which approach Registrar. Registrar can order Flying Squad to visit Society and investigate or order Special Audit either by departmental auditor or appoint Special Auditor to investigate the matter. There should be proofs not just allegations.

5. Change of use from Residence to Commercial

For change of use, the member requires permission from society followed by approval from Local Authority (BMC in Mumbai). It is generally believed that only a part of the flat can be used for professional purposes and that no part of the flat can be used for commercial business. The Constitution of India, while ensuring under Article 19(1) (g) to all citizens the right to practice any trade, business or profession, has maintained a clear distinction between carrying on a trade or business as against practicing a profession. There have been case laws and the matter is debatable. Litigating member & even housing society should remember that there are costs associated with any litigation as you have to deal with Registrar, BMC & Courts.

6. Repairs and illegal construction, extension

Member requires permission from Local Authority for repairs, construction or even extension however most of the members do carry out these things without any permission.

As per Bye Law No 165(a), AGM of the Society may prescribe penalties for different breaches of the Bye-laws of the Society. If the Member persists in continuing the breach/breaches, the Committee shall give the notice to the Member to show cause as why the penalty should not be inflicted on him for breach/breaches of the byelaw/byelaws. AGM, after providing opportunity to defaulting member and after giving him hearing, may levy penalty to the extent of maximum consolidated penalty not exceeding Rs.5, 000/- in any one financial year.

As per Bye Law No 169(a) regarding “Penalties for encroachment of common spaces”, all open /common area meant for use of all Members like staircase, steps, landing areas, parking spaces, lift, corridor, and such other spaces, cannot be occupied by any Member for his own use. The use of such areas shall be restricted to the cause for which these are meant and in approved Lay out Plan. Any Member found to be violating the above condition by encroachment shall have to vacate the encroachment and further he/she shall pay an amount equal to 5 times the monthly maintenance charges per month for the period for which he/she has encroached such spaces and further Members must not carry out any constructions, structural changes over and above the sanctioned plan without prior permission of the Society and Concerned Municipal Authorities / Competent Authorities (BMC).

Who can complain to Local Authority (BMC)? Society or any member of the society can complain to respective Ward officer about any illegal repair, construction or extension. But such complaint has to be followed up with regular follow up including RTI. If BMC decides to act, they will carry out inspection and compare the actual with approved Lay out Plan and then issue Show Cause notice and take the matter to its logical conclusions.

7. Co-operative Housing Society not taking action against unauthorised construction

The growth of population, increasing family size & urbanisation has led to an increasing number of constructions & extensions, among them few are legal and a large number can be found to be illegal. These illegal constructions & extensions are made without proper authority from Housing Society or Local Authority (BMC). To save their pockets they do not realize to go through all the necessary registration and hence go on making an illegal construction & extension.

If any member complaint to MC about any unauthorised Construction or extension, he can formally file complaint with MC and MC is bound to take up the matter with concerned member and take up the issue with BMC. If MC does not do anything, member can complain to Registrar for not acting on their valid complaint.

8. Matters related to leave & license

Leave & Licence agreement is required to be registered and applicable stamp duty has to be paid. Member does not need NOC from Society. Police verification & approval is dynamic and keeps on changing. Best way is to make the tenant as Nominal Member and as per bye law 24 nominal member has right to stay. If Society finds any suspicious activity in a leased flat they should issue waning to member (lessor) and if the matter is serious they should write to nearby Police Station and inform them.

9. Recovery of dues by co-operative societies

For all housing societies MCS has added Section 154B-29 to specifically deal with defaulter in housing society. Section 154(b)-29 of the MCS Act 1960 provides for recovery of dues from members “as arrears of land revenue”, which means Flat could be auctioned by Recovery Officer. This section enables the societies to obtain “Recovery Certificates” and recover the dues from the members by executing the same through the Special Recovery Officers appointed for the purpose, expeditiously and at cheaper cost. The co-op. housing societies would not be required hereafter to go to co-operative courts for recovery of dues.

10. Housing Society collecting exorbitant amount towards non-occupancy charges

Housing Society can collect 10% of monthly maintenance charges extra and nothing more. If member is forced to pay more, he should approach Registrar, who will intervene and stop this. Under a circular (dated August 13, 2001 ) issued by the Government of Maharashtra, under Section 79A of the MCS Act, 1960, the amount of non occupancy charges cannot exceed 10% of the service charges of the society (excluding municipal taxes).

If a flat owner is himself residing in the flat, then, he is not liable to pay non-occupancy charges. In case the flat is occupied by members of his immediate family, namely, son, daughter (married or unmarried) or grandchildren, then, they will also be exempt from the payment of non-occupancy charges.

In a landmark judgment, a division bench of Bombay High Court upheld the 79A circular that capped non-occupancy charges at 10% of the basic service charges of the society. The said circular was aimed at preventing the exploitation of minority members who were called upon to pay exorbitantly high non-occupancy charges. Further, it represented a bona fide exercise by the state to avoid litigation and disputes, by imposing a uniform rate for the levy of non-occupancy charges and delinking them from the rental income earned from the flat.

11. Managing committee members not issuing share certificate to member

A share certificate is a legal certification given by a housing society that a certain member is the registered owner of shares in the cooperative housing society. It is to be given to the member free of charge as per Bye law 9.

Member should write to Managing Committee for issuing the Share Certificate and they don’t cooperate you can lodge complaint to Registrar, who will instruct Society to issue the same failing which MC could be disqualified for defying the order of Registrar.

12. Housing Society not taking action against defaulters who are managing committee members

If the society faces defaults in payments for over 3 months in spite of sending notices, it should follow the recovery procedure and not resort to other illegal measures such as cutting electricity, water or gas connections. MC should remember that there is law of limitation of 3 years if the Society doesn’t initiate any process of recovery in Courts.

If Housing Society is not taking actions against MC members for defaulting on their dues, they cannot continue as MC member. After pointing out this to MC, write a letter to Registrar who will initiate action.

13. Housing Society or its members employing minors

The practice of employing minors is prevalent across cities. As per the Child and Adolescent Labour (Prohibition and Regulation) Act, 1986, amended in 2016 ("CLPR Act"), a "Child" is defined as any person below the age of 14, and the CLPR Act prohibits employment of a Child in any employment including as a domestic help. It is a cognizable criminal offence to employ a Child for any work. Children between age of 14 and 18 are defined as "Adolescent" and the law allows Adolescent to be employed except in the listed hazardous occupation.

Lodge complaint for violations of Juvenile Workers Act 1986. Bye law No. 160(C) stipulates a punishment up to 1 year imprisonment and/or fine up to Rs. 20,000/- b) Lodge Complaint with labour & police authorities

14. Some members are having parties and disturbing the peace in the building

A housing society is like a mini country requiring certain structure to ensure peace and harmony. Bye-Laws for Housing Society serve exactly the purpose of retaining an organised and peaceful community. A resident should not cause inconvenience and create a nuisance to neighbors by behaving in a disrespectful way, throwing litter in society premises or strewing garbage outside the apartment, encroaching unentitled space, having big parties, blaring music, loud arguments, etc. If this happens, this should warrant a complaint from the Society or residents to nearby Police Station u/s 133 CRPC. There is also law The Noise Pollution (Regulation & Control) Rules, 2000 to address this issue.

15. Housing Society not showing records related to various expenses being incurred by the society

Once annual accounts of the society is finalised, MC will circulate audited accounts to all members along with AGM notice. Members desirous to obtain more information or inspect records should write to Secretary and seek inspection of details required. MC cannot deny this, failing with lodge complaint with Registrar and raise this issue at AGM and insist on recording your point of complaint & Secretary’s answers in the minutes. You can also write to Statutory Auditor for some specific matter and seek his answer. You can also use RTI to get all this details that you are seeking.

A Member shall have right to inspect free of cost books, registers documents etc. as provided in Section 32 (1) of the Act and get copies of the documents as provided under Section 32 (2) of the Act, on payment of the fees prescribed under the bye-law No. 172. As per Bye Law No 23(b), a Member shall be entitled to receive a copy of the Approved Bye-laws, Audit Report of the Society, on payment of charges prescribed thereof. 23(a) Rights of inspection of documents and getting copies thereof

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