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Leasing of common areas in an apartment complex

This query is : Resolved 
 

(Querist)
30 April 2009

This is in connection with a provision regarding the letting-out of common areas in an apartment complex consisting of 12 flats at Bangalore.

Two out of the 12 members of the soon to be formed society are not in favour of such letting out, whereas the other 10 are and have stated so and have conveyed their acceptance of the same.

The question that I wish to ask is, is a majority sufficient for including a clause for the same sufficient, or is unanimity essential?

I am including the text of two sections of The Karnataka Apartment Ownership Act, 1972 which the two different 'groups' are relying on to insist on the necessity of unanmity and the requirement of only a majority, respectively.

6. Common areas and facilities.- (1) Each apartment owner shall be entitled to an undivided interest in the common areas and facilities in the percentage expressed in the Declaration. Such percentage shall be computed by taking as a basis the value of the apartment in relation to the value of the property and such percentage shall reflect limited common areas and facilities.
(2) The percentage of the undivided interest of each apartment owner in the common areas and facilities as expressed in the Declaration shall have permanent character, and shall not be altered without the consent of all of the apartment owners expressed in an amended Declaration duly executed and registered as provided in this Act. The percentage of the undivided interest in the common areas and facilities shall not be separated from the apartment to which it appertains, and shall be deemed to be conveyed or encumbered with the apartment even though such interest is not expressly mentioned in the conveyance or other instrument.
(3) The common areas and facilities shall remain undivided and no apartment owner or any other person shall bring any action for partition or division of any part thereof, unless the property has been removed from the provisions of this Act as provided in sections 14 and 22. Any covenant to the contrary shall be null and void.
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(4) Each apartment owner may use the common areas and facilities in accordance with the purpose for which they are intended without hindering or encroaching upon the lawful rights of the other apartment owners.
(5) The necessary work of maintenance, repair and replacement of the common areas and facilities and the making of any additions or improvements thereto shall be carried out only as provided herein and in the bye-laws.
(6) The Association of Apartment Owners shall have the irrevocable right, to be exercised by the Manager or Board of Managers, to have access to each apartment form time to time during reasonable hours as may be necessary for the maintenance, repair and replacement of any of the common areas and facilities therein or accessible therefrom, or for making emergency repairs therein necessary to prevent damage to the common area and facilities or to another apartment or apartments.


16. Bye-laws and their contents.- (1) The administration of every property shall be governed by bye-laws, a true copy of which shall be annexed to the Declaration . No modification of or amendment to the bye-law shall be valid, unless set forth in an amendment to the Declaration and such amendment is duly recorded and a copy thereof is duly filed with the competent authority.
(2) The bye-laws shall provide for the following matters, namely:-
(a) The election from among the apartment owners, of a Board of Managers, the number of persons constituting the same, and that the terms of at least one-third of the members of such Board shall expire annually: the powers and duties of the Board; the compensation, if any, of the members of the Board; the method of removal from office of
members of the Board; and whether or not the Board may engage the services of a Secretary, a Manager or Managing Agent, and specifying which of the powers and duties granted to the Board by this Act or otherwise may be dele


A V VishalOnline (Expert)
30 April 2009

Dear Vijaychandar,

The The Karnataka Apartment Ownership Act, 1972 s.6 is clear about the usage of common areas, from the bare reading of the section it is clear that decision on common areas is not by majority but by unanimity, the wordings in the section "and shall not be altered without the consent of all of the apartment owners expressed in an amended Declaration duly executed and registered as provided in this Act" declares the legislative intent that the decisions should be unanimous. Further, the act also defines the ownership of the common area:- " The percentage of the undivided interest in the common areas and facilities shall not be separated from the apartment to which it appertains, and shall be deemed to be conveyed or encumbered with the apartment even though such interest is not expressly mentioned in the conveyance or other instrument".

Since the act is clear on these points the decision of the majority cannot prevail even if the bye-laws states so since the bye-laws cannot be vires to the act.

Hence, I opine you can approach a good lawyer and get an injunction against the majority resolution passed by the association.

H. Vijaychandar (Querist)
30 April 2009

Mr. Vishal,
I thank you again for your opinion.

As a matter of fact, I am a part of the majority. I just wish to further question you by asking you if the proposed bye law for the yet to be formed society would not have legal sanction, as there is no change being contemplated in the percentage of the undivided interest of a flat owner, but only the 'enjoyment' of the same may be affected.

Secondly, would the correct legal course for the majority be to avoid including the particular bye-law for now, let the association be formed and then call for a vote on the same for its inclusion? Or would unanimity be needed at all times? Has the legislature while framing the act and the relevant provision not envisaged the possibility of a divergence of view amongst the owners and residents (both at the time of the formation of the association and afterwards)? After all, when apartment complexes have 100s of flats and an equally large group of owners for the various flats, is unanimity possible?

A V VishalOnline (Expert)
30 April 2009

Dear Mr Vijaychandar

I have requested my learned friend Sri Sanjeev Desai to assist you in the query. Mr Sanjeev is from Bangalore and he will be more competent to give the correct legal position and guide you accordingly. Since I am from Hyderabad, I cannot advise in matters governed by the local laws in Karnataka and in particular with respect to The Karnataka Apartment Ownership Act, 1972, so kindly excuse me

Best regards

Vishal

B.B.R.Goud. (Expert)
20 May 2009

as per the given provisions of the said Act, the unanimous acceptance is essential and valid, majority acceptance is not valid.
therefore, though you achieved majority you can not let out the common area.



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