A Legal Article About "Common Expenses and maintenance of Apartments"

Common Expenses and maintenance of Apartments

Apartment culture in Bangalore has gained popularity due to several factors and presently there are a large number of apartments built within the city and on the outskirts of Bangalore. 

The unique feature of apartments is that the owner of an apartment will enjoy his property subject to several restrictions though he shall be entitled to the exclusive ownership and possession of his / her apartment. He / She will not get absolute right over the land on which the apartment building is constructed, but only gets an undivided share in the land. 

Every apartment owner has to utilize the common areas and the common facilities like use of stair case, elevators, fire escapes, basements, swimming pool, recreation centre, community hall, play rooms, etc., in co-ordination with the other apartment owners/occupants and has to make additions, alterations and repairs to his apartment only with the consent of the apartment owners association andin accordance with the provisions of the bye-laws or guidelines of such association. Further, the foundation, columns, girders, beams, etc., of an apartment building are common and hence they are to be protected with care. In apartments, the owners have always to keep in mind the philosophy of LIVE AND LET OTHERS LIVE.

Apartment Ownership Act

To regulate the activities of apartment owners in possession and enjoyment of their apartments, State Governments have enacted and made applicablein their States the Apartment Ownership Act and rules. The State of Maharashtra was first to enact "The Maharashtra Apartment Ownership Act 1970, which has come into force with effect from February 19, 1971. The Karnataka ApartmentOwnership Act, 1972, was published in Karnataka Gazette extraordinary on 23.07.1973 and came into force from 01.04.1975. 

Before proceeding further it is worthwhile to know the definitions of Apartment, building, property, and Flat. 

"Apartment" is defined in Karnataka Apartment Ownership Act, 1972, as "a part of the property intended for any type of independent use, including one or more rooms or enclosed spaces located on one or more floor (or parts thereof) in a building intended to be used for residential purposes and with a direct exit to a public street, road or highway or to a common area leading to such street, road or highway". 

The Act defines "Building" as a building containing four or more apartments or two or more buildings each containing two or more apartments with total four or more apartments of all such buildings and comprising a part of the property. 

Like various commonly used words having different meaning the word "property" also has a distinct meaning in the KarnatakaApartment Ownership Act. This includes land, building all improvements and structures thereon, allowed in freehold or held on lease or as a occupant under any law relating to land revenue and all easements, rights, appurtenances belong thereto and all articles of personal property intended to use in connection with which have been or intended to be submitted to the provisions of Act. 

Management and Transfer Act, 1972, "Flat" is defined to mean a separate and self contained set of premises used, intended to be used for residence or office, or showroom or shops or go down (includes a garage) the premises forming a part of a building. According to Karnataka Ownership Flat (Regulation of the Promotion of Construction, Sale, Management andTransfer Act, 1972, "Flat" is defined to mean  separate and self contained set of premises used, intended to be used for residence or office, or showroom or shops or go down (includes a garage) the premises forming a part of a building.

Common areas and facilities

The unique feature of apartments is the utilization of the common areas and facilities by the apartment owners which are to be shared by all the apartment owners since none of them will have an absolute ownership or beneficial right over the common areas and common facilities. These areas and facilities include the land on which building is constructed, foundation, columns girders, beams, supports, terrace, corridors, lobbies, stairs, fire escapes, entrances and exits of the building, basement, cellars, gardens, storage spaces, the premises, generators, installations of central services like power, light, gas, hot and cold water, heating, refrigeration, air conditioning, incinerating, elevators, tanks, pumps, compressors, ducts, etc. and in general all apparatus and installations existing for any common use. 

Further, the community halls and commercial facilities available within the precincts of the apartment building which are necessary for enjoyment of the apartment owners are also considered as common facilities. All such common areas and facilities are to be mentioned in the deed ofdeclaration to be registered with the jurisdictional sub- registrar.

To maintain these common areas and to provide the common, money is needed. Every apartment owner has to contribute his/her share in the common expenses calculated on the basis of the super built area of his apartment which is to be paid regularly by all the apartment owners without default. As per section 19 of the Karnataka Apartment Ownership Act, 1972 all unpaid common expenses shall constitute a charge on such apartment prior to all other charges, except the charge, if any, on apartment or payment of government and municipal taxes and all sums unpaid on a first mortgage of the apartment. 

According to the Karnataka Apartment Ownership Act, "Common expenses" means (a) all sums lawfully assessed against the apartment owner by the Association of apartment owners; (b) expenses of administration, maintenance, repair or replacement of common areas and facilities; (c) expenses agreed upon as common expenses in bye-laws; and (d) expenses declared as common expenses by the provisions of the Act or by the declaration or the bye-laws. As the common expenses are liable to be shared there could never be any loss. On the contrary, there are chances of surplus fund which is known as common profits. Common profits mean balance of all income, rents, profits, and revenues from common areas and facilities remaining after deduction of common expenses.

Deed of declaration 

If any apartment owner wants to be governed by the provisions of the Karnataka Apartment Ownership Act, he shall execute a deed of declaration of apartment under the Act, which is to be registered with jurisdictional sub registrar. This Deed contains description of land on which the building is constructed, whether the land is freehold or leasehold, complete description of building, mentioning the number of floors, basement number of apartments and principle materials of which it is constructed, number of each apartment, location, area, number of rooms, immediate common area to which it has access and any other data relevant for proper identification, description of common areas and facilities, value of the property and of each apartment, percentage of undivided interest in common areas and facilities for each apartment, name of the owner, voting rights, method by which the declaration may be amended etc.

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An Article Regarding "Foreign Direct Investment in Urban Infrastructure Development"

Foreign Direct Investment in Urban Infrastructure Development

Real estate business in India has by and large remained in the unrecognized sector and thereby, has attracted little corporate funding. Few efforts have been made to streamline the sector and its financial environment. One of the most recent developments however appears to be a major shot in the arm for the real estate sector. The decision of the Government of India to permit foreign direct investment (FDI) has been viewed by many as the much needed prescription to bring about a competitive environment in the sector, thereby forcing smaller and unrecognized players to move out and make way for more professionally and globally sound players.

Although it has a long time for the government to carry out the unbundling process with some degree of success, it has not been a mean achievement. The reasons for this have been continued liberalization, rising of FDI cap in various sectors telecom reforms and foreign companies being permitted to buyout Indian partners.

FDI in real estate in Indian cities may be viewed in terms of its overall strengths, weakneses, opportunities and threats. In terms of strengths, one of the major benefits, which FDI is slated to bring about, is influx of huge capital. This will of course happen only if we ensure investments by the foreign investor are free from hassles. It is still a general perception that the real estate sector in India is not the right place to park funds.

The real estate industry in India has a very poor image in the global scenario. The government of India has proactively recognized that FDI policy has great strength to rake in a lot of money. We earnestly feel that the current industry has certainly matured in terms of quality and design and foreign entry would certainly improve the product. Improved, cheap and maintenance free technology is another strength which can be brought in by foreign companies. 

On the whole, greater professionalism would certainly be induced into the real estate industry. The FDI has resulted in competition and fall in prices in telecommunication, electronics and automobiles sectors and the consumers have been immensely benefited, however the same has also to be realized in the real estate sector. The real estate providers both private and public have to strike a balance so that all the sections of the society are benefited.

The following can be considered as goals for sustainable development of urban infrastructure: 

1. Supporting urban reforms, industrialization, productivity growth, expansion of financial and other services, and promoting economic activity in both formal and informal sectors. 

2. Coverage of urban infra-structure facilities, water supply, sewerage and drainage solid waste management, transport, health care, education, etc.

3. Creating an enabling legal, planning, financing regulatory framework for the sustainable augmentation of housing, infrastructure and social amenities.

4. Facilitating commercialization of urban infrastructure and alternate forms of service provision, including privatization and public private partnerships.

5. Assisting the urban poor in income generation activities, improving their quality of their physical environment and enhancing their access to basic services like safe drinking water and sanitation, primary health care and education.

6. Protecting the urban environment and ensuring harmonious development of rural and urban areas with due regard to the conservation of natural resources.

7. Installing and sustaining people-friendly and transparent and accountable urban governance based on empowered elected local bodies, committed political leadership, partnerships with civil society, participatory planning, capacity building of stake holders, etc.

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Jail term for errant Real Estate developer

Jail term for errant Real Estate developer

In what may bring relief to housing aspirants across the country, chances of home buyers being cheated by reality companies might be minimized as the proposed real estate regulator will not only be empowered to penalizeerrant developers by imposing fines but also recommend imprisonment upto three years if they are found guilty. The information, to be posted on the regulator's website, will also mention the names of blacklisted developers.

For any housing project exceeding 1,000 square meters or four apartments, the builder will have to procure a registration certificate from the regulator after furnishing all relevant project details and permissions from the competent authorities. This includes the number and size of plots, layout plan, carpet area and plinth area of the flats or apartments and the facilities provided. A project cannot be marketed or advertised without the registrationcertificate. The government has prepared a draft of the model Real Estate Bill, and has invited views of all stakeholders by November ahead of giving it a final shape.

Safeguarding the interests of buyers, the regulator makes it mandatory for the developer to enter into a sales agreement ahead of taking the deposit from a potential buyer and to provide stand-in warranty for the project for two years after handing over the possession for any construction relatedproblems. Any buyer wishing to quit the project due to delays or false promises shall be returned the entire investment along with interest at the existing rate. Briefly, the Real Estate Regulator can [i] penalize errant developers by imposing fines if they are found guilty [ii] recommend imprisonment of up to 3 years, [iii] post names of blacklisted developers on its website; and [iv] order return of the entire investment along with interest at the existing rate if abuyer quits the project due to delays or false promises.

The builder or promoter of the project will have to submit a timeline for providing various civic services like supply for electricity and water, sewerage and drainage systems, lifts and fire-fighting equipment. Value of cost escalation in projects, if any, will have to be arrived at by mutual consentbetween promoter and buyer. The names and addresses of all middlemen or brokers will have to be maintained on the website. In case the developer fails to provide any of the services listed at the time of purchase, he will be asked to compensate the buyer. 

The builder shall furnish a bank guarantee equal to fiveper cent of the estimated cost of the development works to a competent authority, which may discharge it on recommendation of the regulator. The promoter will have to obtain an insurance policy for at least five years after the construction activity is complete for apartments against loss or damage by natural calamities for the cost of replacement of such property and loss of life and bodily injuries suffered by persons occupying the apartments.

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An Article Regarding "SUPREME COURT DECISION ON 'Will'"

SUPREME COURT DECISION ON 'Will'

Execution of a Will is required to be proved in terms of the provisions of Section 63( c) of the Indian Succession Act and Section 68 of the Indian Evidence Act.

In Janki Narayan Bhoir v. arayan Namdeo Kadam, [(2003) 2 SCC 91], while dealing with the question elaborately, the Hon'ble Supreme Court has held as under: 

"To say Will has been duly executed, the requirement mentioned in Clauses (a), (b) and (c) of Section 63 of the Succession Act are to be complied with i.e., (a) the testator has to ign or affix his mark to the will, or it has got to be signed by some other person in his presence and by his direction; (b) that the signature or mark of the testator, or the signature of the person signing at his direction, has to appear at a place form which it could appear that by that mark or signature the document is intended to have effectas a will; (c) the most important point with which we are presently concerned in this appeal, is that the will has to be attested by two or more witnesses and each of these witnesses must have seen the testator sign or affix his mark to the Will, or must have seen some other person sign the Will in the presence and by the direction of the testator, or must have received from the testator a personal acknowledgement of signature or mark, or of the signature of such other person, and each of the 11 witnesses has to sign the Will in the presenceof the testator."

As regards compliance of the provision of Section 68 of the EvidenceAct, it was opined:

"In a way, Section 68 gives a concession to those who want to prove and establish a will in a Court of law by examining at least one attesting witness even though will has to be attested at least by two witnesses mandatorily under Section 63 of the Succession Act. But what is significant and to be noted is that one attesting witness examined should be in a position to prove the execution of a will. To put in other words, if one attesting witness can prove execution of the will in terms of Clause (c) of Section 63, viz., attestation by two attesting witnesses in the manner contemplated therein, the examination of other attesting witness can be dispensed with. 

The one attesting witness examined, in his evidence has to satisfy the attestation of a will by him andthe other attesting witness in order to prove there was due execution of thewill. If the attesting witness examined besides his attestation does not, in his evidence, satisfy the requirements of attention of the will by other witness also it falls short of attestation of will at least by two witnesses for the simple reason that the execution of the will does not merely mean the signing of it by the testator but it means fulfilling and proof of all the formalities required under Section 63 of the Succession Act. 

Where one attesting witness examined to prove the will under Section 68 of the Evidence Act fails to prove the due execution of the will then the other available attesting witness has to be called to supplement his evidence to make it complete in all respects. Whereone attesting witness is examined and he fails to prove the attestation of thewill by the other witness there will be deficiency in meeting the mandatory requirements of Section 68 of the Evidence Act. "

 

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An Article about "Insuring buildings against risk"

Insuring buildings against risk

Insurance is an agreement between two parties, namely the owner of a property (insured) and the insurer (insurance company), whereby the insurance company undertakes to indemnify the owner of the property the financial loss that the owner may suffer in case the property is damaged or destroyed by a cause for which the insurance policy is taken. Insurance is one of the ways to protect buildings against natural losses and vandalism. The types of coverage available include fire, consequential loss, personal property, public liability, casualty, and surety bonds, workers' compensation. The risks are covered only after the premium is paid and the policy liability is limited to the insured sum and for a specified time limit till the policy is kept alive.

In India, an insurance company has come out with a scheme for householders to cover various risks with a single policy protecting the members who permanently reside in the house, including domestic and electrical appliances. Another company covers the possessions against different disasters, including fire, natural accidents, explosion of gas cylinder, bursting of water tanks and pipes, impact damage caused by vehicles, riots, strikes, malicious acts, burglary, mechanical breakdown of domestic appliances and so on.

Title Insurance Policy 

Under this policy, the policyholder is protected from losses arising from defects in the title. Based on the enquiry the insurance company determines whether the title is insurable. This is the best defence of the title. The company will defend any suit based on an insurable defect and pay claims if the title proves to be defective.

Fire Insurance Policy

This policy covers against direct loss or damage to the property due to fire. The actual amount, which the insured will receive depends on the actual loss suffered. Full reinstatement can be received only if the property had been adequately insured by payment of appropriate premium. If the building had been underinsured, only proportional sum will be paid. The value of the property is arrived at the reinstatement cost irrespective of any other value. Normally, the value of foundation is excluded.

Sometimes, an old building which is destroyed completely by fire cannot be reinstated in its previous condition due to restriction by changes made in the local municipal laws. In such a case, the insurance company may not compensate the insured of the loss suffered by him on the building cost that is not cleared.

If loan is availed while purchasing a property, the mortgagee insists on the insurance cover of the property. 

Earlier, the value of personal properties in a house used to be only 25 per cent to 50 per cent of the value of the house. At present, the value of personal properties in a house has increased substantially.

Public Liability Insurance

This policy covers the damages that may be inflicted on a third party by the act of omission or commission The cost of insurance can be reduced in several ways like accepting higher deductible amount, installing security devices, installing fire alarms, and by comparing various terms and conditions issued by insurance companies.

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An Article about "Rules regarding conversion of Agricultural Land"

Rules regarding conversion of Agricultural Land

The city of Bangalore is growing and is identified as the fastest growing city in India, resulting in the agricultural lands in the outskirts of city being used for residential, commercial and industrial purposes. Many people are not aware that the lands assessed or held for agricultural purpose cannot be straight away used for non-agricultural purpose. It needs to be first converted for non-agricultural purpose and then put for such use.

Karnataka Land Revenue Act, 1966 has prescribed the procedure for converting agricultural lands to non- agricultural purpose, under sections 95, 96, 97, and 98, of the Act. This is a social legislation aimed more at protecting the agriculturists and farmers than encouraging non-agricultural activities in the agricultural lands.

Any owner of the land, which is assessed or held for agricultural purpose, who wants to divert such land or any part of such land for non-agricultural purpose shall apply for permission to the Special Deputy Commissioner who is the concerned authority in Bangalore Urban and Rural District. The purpose of use of land must be specific and the Deputy Commissioner may grant permission-imposing conditions or may refuse to grant permission for such conversion. However, he shall not refuse the permission in case of lands included in outline Development Plan or in the Comprehensive Development Plan published under Karnataka Town and Country Planning Act, 1961 (Karnataka Act 11 of 1963) provided such conversion is in accordance with the land use specified in such plan.

According to notification RD/7 /LGP/95 dated 7/6/99, published in Karnataka Gazette extraordinary dated 8/6/99, the application for conversion has to be submitted in duplicate to the jurisdictional Tahsildar, who will forward the same to the sanctioning authority. Any additional information required has to be intimated to the applicant within one week of receipt of the application. The Tahsildar shall verify that only the owner has applied for permission and conversion of land does not defeat the provisions of Karnataka Land Reforms Act, Land Grant Rules, Prohibition of Transfer of Certain Lands Act, Rules pertaining to green belt and that the land is not notified for acquisition. The burden of verification regarding complicity, violation of the above laws rests solely with the Tahsildar and the applicant shall not be asked to produce any document pertaining to the same.

The Tahsildar shall forward the application to the jurisdictional Deputy Commissioner within 15 days of receipt of the application along with a revenue sketch of the area proposed for conversion. The Deputy Commissioner in turn will inspect the lands to satisfy himself that the conversion does not cause any public nuisance or violate the existing provisions of law.

If conversion is permitted, then the applicant will be issued a notice to pay the requisite fine within fifteen days of the notice.

The Deputy Commissioner may refuse permission on grounds that the conversion would defeat the provisions of law in force or is likely to cause public nuisance or is not in the interest of the general public or that the owner is not able to or unwilling to comply with the conditions imposed.

The Deputy Commissioner may impose such conditions as may be necessary to secure health, safety and convenience and restrict the dimensions, arrangements and ensure that accessibility to building sites are adequate for the health and convenience of the occupants and that it does not contravene the provisions of any law relating to the Town and Country Planning or erection of buildings.

Any application for conversion of agricultural land shall be made only by the owner, unless otherwise directed by the Deputy Commissioner. The conversion of land attracts fine as per Rule No. 107 of Karnataka Land Revenue Rules, 1966.

Prior notice of conversion of agricultural land shall be made in the prescribed form 21-A. The applicant shall also enclose the challan for having paid the fine computed in accordance with the prescribed rules to the concerned treasury. Such notice has to be given to the jurisdictional Tahsildar with an undertaking to pay the balance fine, if any, with the full description of land that is to be converted. 

As per Rule 108 of Karnataka Land Revenue Rules 1966, no fine can be imposed on appropriation of agricultural land made over or acquired under Land Acquisition Act at the instance of a Government department, Municipal Council, Local Board, Village Panchayat, Charitable Educational Institution for charitable or public purpose, from which the Government or such statutory authorities do not derive any profit and the land is used for the purposes of construction of school building, laying of play grounds, hospitals, dispensaries or rest houses. Similarly, the fine cannot be imposed on lands acquired for extension of village or improvement of village sanitation at the instance of village Panchayat, for construction of houses by Karnataka Housing Board, for making market yards under Karnataka Agricultural Produce Marketing Regulation Act, 1966, and the land proposed to be converted for poultry farming.

The State Government has powers to declare certain areas within the prescribed limits as green belt area to protect and improve the environment. In green belt areas only agricultural and agriculture related activities are permitted and conversion of agricultural land for any other purpose is not permitted.

The Deputy Commissioner has to inform the applicant of his decision within four months from the date of receipt of the application. If no decision is conveyed, it is deemed that permission for conversion of land has been granted. The conversion of land for non-agriculture is subject to payment of the fine imposed by the Deputy Commissioner. The conversion is only for a specific non-agricultural purpose for which it was permitted. The land has to be assessed for non-agricultural purpose.

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