Should a multi-storied apartment complex association register itself under Societies Act?
A reading of the Karnataka Apartment Ownership Act 1972 (KAOA, otherwise called Act no 17 of 1973 - click here) very clearly brings out the fact that that is what is relevant to multi-storied apartment complexes. And, that is what builders are generally following, as required of them as per the Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972 (otherwise called Act no 16 OF 1973 - click here).
However, there is no authority specified under KAOA to 'register' an association, though the 'Registrar of Co-operative Societies' has been named as the "Competent Authority", but with powers and responsibilities not clearly defined.
Because of this lacuna in the KAOA, there have been suggestions from lawyers to register multi-storeyed apartment complexes under the Karnataka Societies Registration Act, 1960 (KSRA, otherwise called Act 17 of 1960 - click here), where the powers of the Registrar have been fairly well-laid out, including of the appointment of an 'Administrator' if required.
A closer reading of the KSRA however clearly shows that it pertains generally to 'Literary, Scientific, Charitable and other organisations'. The relevant Cl 3 is fairly specific in these respects. Nowhere is there even a mention of 'apartment complexes'. Consequently, if still pursuing registration under this Act, the association will require to change its name to include words like 'welfare', etc, and also amend the 'aims & objects' in its by-laws to include pursuit of some of the activities listed under the clause.
Further, registering under this Act will also enjoin a lot of additional responsibilities on the Managing Committee, like filing of annual returns along-with certified copies of Income & Expenditure statement, Balance Sheet, as also payment of filing fees amounting to 0.2% of the 'transaction value' in the Income & Expenditure statement. Even as it is, it is generally difficult to find competent people to take up office (generally honorary positions) in such associations, and adding more burdens, is only helping deter them further. The new requirement of the Govt of Karnataka that all correspondence and documentation will in future have to be in Kannada, is not making things any easier.
But, the proponents of the suggestion go on to argue that it helps bring about greater discipline, therewith accountability, and therefore it is worth the effort. Whatever, as a very senior lawyer in the city (who also was the Charter President of the association in one of the earlist multi-storied housing complexes, where he resides even today) opined, "no administration can be more transparent than that by a democratically elected 'Managing Committee' functioning according to the guidelines prescribed by a vigilant General Body of members".