REGISTRATION OF RESIDENTIAL APARTMENTS – KARNATAKA

This post is triggered by our own curiosity.  We were trying to identify how many of the buildingresidential apartments are being registered under the Karnataka Apartment Ownership Act (KAOA) and were surprised that almost all (barring a couple of apartments) were registered under Karnataka Societies Registration Act as a society. We did our reading of the Act and the associated Rules. But things were not adding up, since the KAOA is meant primarily for registering the apartment associations and we visited the jurisdictional sub-registrar’s office which handles the registrations. No surprises, we did not get anything meaningful from the authorities.

Sharing our observations here:

In Karnataka there are two legislations that deal with registration of apartments’ associations. One of them is a special legislation, the Karnataka Apartment Ownership Act, 1972 and the other is the Karnataka Societies Registration Act 1960.

Although Karnataka Apartment Ownership Act, 1972 (KAOA) exists as a special legislation governing the registrations and functions of residential apartments’ associations, most of the residential associations in Bangalore (as we saw) are registered under The Karnataka Societies Registration Act 1960 (KSRA).

Simple reason for such a trend, is perhaps because of the easier process under the KSRA as opposed to the tedious one under the KAOA.

The following two are the main reasons for the attractiveness of KSRA over KAOA:

a) Eligibility criteria: in case of KSRA, only 7 members above the age of 18 years are required to form the association. Whereas, under the KAOA every member of the building has to come together to form the association; and

Issue under KAOA : it might not be possible to have all the members present at the same time for the purpose of registration or to have a unanimous consensus at the same time.

b) Documentation: under the KSRA the set of documents to be submitted is far simpler and easier to obtain than in the case of KAOA and all the documents under the KSRA can be internally prepared without any dependency on the authorities. However, this is not the same under the KAOA as most of the documents required are dependent on clearance from the authorities. For instance, the change in the Khata no. is one such document which has to be submitted for the purpose of registration.

Issue under KAOA : documents required to be submitted under the KAOA requires time to process and obtain. The change in Khata No. itself takes a lot of time and unless it is made available, the association cannot be registered.

Therefore, from the point of view of ease, it is advisable to get the association registered under the KSRA but from the scope of right in the common property it is advisable to register an association under the KAOA as it:

a) exclusively deals with residential apartments unlike the KSRA which does not contemplate or even directly bring apartment under its ambit;

b)  most important to note is that associations formed under KAOA make each apartment a transferable and heritable property with separate Khata and specific undivided interest in land which is not the case with the KSRA as it does not provide, principally in law, any undivided share in land and all common property of the association is vested with the registered society or such matters needs to be explicitly captured in the bye-laws of the society; and

c)  unlike the KSRA which provides for mandatory annual compliance (s) there are no such requirements under the KAOA.

For the aforementioned, and for the share in common land, the KAOA should be preferred over the KSRA. However, for the ease of process of registration, as mentioned above, KSRA is generally used for registration of apartments.

Please also, find the feature comparison of the two legislations which might help you make a better judgment.

S.No. Particulars The Karnataka Societies Registration Act 1960(KSRA) Karnataka Apartment Ownership Act, 1972
1. Eligibility/ No. of people 7 members who are above 18 years of age can become members and get the association registered. To get registered under this Act, require at least 4 apartments to form a building. All the owners have to come together to get the association registered.However, this tedious process can be avoided by execution of power of attorney from all apartment owners in the name of one, to submit their property under the association.
2. Documents Required/
Process Involved
• Application;
• Proceedings of the first Meeting;
• Memorandum of Association;
• List of members of Executive   Committee with name, address, occupation, age and signature ; and
• Bye-laws of the Association.
• Year of Construction of the Apartment Building.
•  Sanction Plans, Approval Plans and Occupancy Certificate of the Apartment Building.
• Declaration and Deed of Apartment made in respect of every apartment contained in the building forming part of the property together with a memorandum. This can be done in a single Deed listing out all the apartments
• Khata to be changed in the name of the owner (s)
• Sale Deed/s of the Land on which the Apartment Building exists.
• No. of Owners in the Apartment Building and Sale Deeds of such owners.
• Prospective name of the Apartment Association/ Society.
• No-Objection Certificates from local Bodies.
3. Time of Registration The moment 7 members above the age of 18 years consent becoming members, and registering the Society/ Association. Only when all the owners are present and come together with their consent.
4. Authority • Registrar- officer appointed by the State Government;
• where no such officer is appointed, the Inspector General of Registration in Karnataka.
Jurisdictional office of the Sub Registrar
5. Annual Compliance (s) a) General meeting: Every society registered under this Act shall hold every year a general meeting called the annual general meeting at which:
the report of the management of the society for the previous year together with an audited copy of the balance sheet, income and expenditure account and the auditor’s report shall be submitted for approval.b) The first annual general meeting shall be held by a society within eighteen months of its registration. The next annual general meeting of the society shall be held within nine months after the expiry of the first annual general meeting
No Annual Compliances mandatory under the Act.However, governing powers need to be captured under the Bye-laws of the association.
5.1   c) Balance sheet and annual list of governing body to be filed with Registrar: On or before the fourteenth day succeeding the day on which the annual general meeting of a society is held, there shall be filed with the Registrar a list of the names, addresses and occupations of the members of the governing body then entrusted with the management of the affairs of the society and a copy of the balance sheet and income and expenditure account audited by a person who under section 226 of the Companies Act, 1956 (Central Act 1 of 1956), can act as an auditor of companiesd) Accounts: The governing body of every society registered under this Act shall keep at the registered office of the society or at such other place in the State as the governing body thinks fit, proper books of account with respect to,—
(1) all sums of money received and expended by the society and the matters in respect of which the receipt and expenditure takes place;
(2) all sales and purchases of goods by the society; and
(3) the assets and liabilities of the society.
6. Stamp Duty/ Fees a) For Registration of Memorandum of association and rules and regulations of Society under Sub-section (1) of section 8:i) if society is situated within Bangalore Metropolitan Regional Development Authority limits: Rs. 1000/-ii) if society is situated in any other area: Rs. 500 Stamp Duty will be ascertained upon production of the Declaration of Deed and other documents prescribed above.

If you have better insights on this one, please be social and share.

Disclaimer: This is not a legal opinion and should not be construed as one.  Please speak with your attorney for any advice.

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