17 years on, Bihar ready with by-laws to run apartment complexes

The Bihar government is set to introduce model by-laws to govern residential apartment complexes, granting legal recognition to apartment owners' associations. The by-laws will be sent to the state cabinet for approval and will allow associations to register with the co-operative department. The by-laws remove a clause mandating representation from various castes and tribes on the board of management. The by-laws cover topics such as the functioning of the association, meeting procedures, powers and duties, board of management, and financial audits. Once implemented, the by-laws will help apartment dwellers properly maintain their housing societies.

Seventeen years after Bihar passed its own apartment ownership act, the state government is now ready with model by-laws to govern the functioning of residential apartment complexes, officials familiar with the matter said.

An apartment complex in Patna. (HT FILE)

The model by-laws, to be called Bihar Apartment Owners Model By-laws, 2023, will be soon sent to the state cabinet for approval.

Once enforced, association of apartment owners (AAOs) will get legal recognition and can get registered with the co-operative department, a move that would help lakhs of flat owners in Patna and other cities to run the affairs of their apartment complexes.

Officials in the urban development and housing department (UDHD) said the chief technical hurdle — a clause that mandated there would be two directors from scheduled castes and tribes, two from extremely backward classes and two from other backward classes in the board of management of an apartment complex — has been now removed as a condition to register an AAO with the co-operative department.

The by-laws have been framed under the provisions of the Bihar Apartment Ownership Act, 2006.

“There will be a prescribed form for registering the association of apartment owners to be issued by the co-operative department. The reservation norm in will not be required to be followed for registration of AAOs under the model by-laws,” said an official of the UDHD, who did not wish to be named.

Additional chief secretary of the UDHD, Arunish Chawla, said the model by-laws will help apartment dwellers properly maintain the housing societies. “It is final stages and soon be implemented,” he said.

The model by-laws

Under the model by-laws, there are six chapters having detailed provisions of how the management committee or association of apartment owners (AAO) will function, the objects of the association, how the meetings would be conducted, the powers and duties of the association, the board of management, election of office bearers and audit of financial accounts.

The model by-laws , which will be the guiding provisions for AAOs to make its by-laws at their first meeting, are comprehensive and touched various aspects of running the affairs of the apartments.

Important clauses

All persons, who own or have purchased apartments in the building and executed a deed for this purpose, shall be members of the Association and shall ensure the payment of entrance fee of ₹1,000.

In case an apartment has been purchased jointly by two or more persons, joint owners be entitled to the apartment. The person whose name stands first shall have the right to vote in association meetings while the second holder will be entitled to vote in absence of the first holder.

A member will not be entitled to vote for election to the board of management if he/she has arrears or any sum due in respect of his/her contributions for common expenses for more than sixty days from the date on which the election would take place. This clause will act as a deterrent for apartment owners who fail to pay their maintenance amount for upkeep of common spaces of the apartments and facilitate the AAOs to act tough against defaulters, official said.

“We are also in consultations for adding some provisions by which the management committee will be able to take certain action against flat owners who wilfully do not pay maintenance or keep arrears for a long time,” said an official.

Board of management

There will be three to five members in the board of management comprising president, secretary, treasurer and two members. The secretary and treasurer would operate the bank accounts and the secretary will have powers to retain up to ₹10,000 for petty expenses and spend the amount without prior sanction of the AAO.

Bank accounts of the association have to be opened with nationalised bank/ scheduled or post office in the name of the association. The term of board management board will be for two years. No person shall hold the post in the board continuously for two terms, as per the by-laws. An arrangement shall be also made by the board that one third of the members of the board retire biannually.

Appointment of auditor

The Association has to get its financial accounts of every financial year audited and publish the same on or before the July 31 each year and also may appoint an auditor at its general body meeting.

Rules of conduct/obligations

An apartment owner will not be allowed to make any alteration or structural changes in his/her unit without permission from the AAO and no owner shall undertake any work that affects the external facade of the building from any angle i.e. covering of balconies and terraces, change of colour, etc.

Apartment owner would not keep any items or goods in the common passageway or encroach it and also shall not engage in any act intended to facilitate criminal activity in the apartment or common spaces. Any damages caused by the apartment owners or their guests to the building would have to be duly compensated.

“We are hopeful the draft model by-laws have already covered many aspects of running the affairs of the apartments. Once implemented, it would help the owners’ association to settle disputes, upkeep the buildings through collection of maintenance charges or contributions and also act strictly against defaulters,” said another UDHD official. He said the model by-laws would be enforced in a month’s time.

In Bihar, residents’ welfare associations (RWS) exist in some cities but face hurdles in registration under the Bihar Co operative Societies Act, 1935, and Bihar Self Supporting Cooperative Society Act, 1996, owing to the reservation clause.

The issue was raised last year in the state assembly during the budget session. The then Speaker, Vijay Kumar Sinha, had assured the House to look into the matter and held meetings with departments concerned.