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Housing Society defaulters

Procedure To Recover Dues From Housing Society Maintenance Bill Defaulters

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Procedure To Recover Dues From Housing Society Maintenance Bill Defaulters

In current situtation running a society smoothly depends on how much cash reserves the society has in its bank. Few socitities doesn’t feel that much heat as members are cooperative and paying maintenance bills on time,check .Regular payment from members makes easier to run society as it doesn’t feel cash crunches.

However few socities are expcetion to this as default by members are keep on increasing, which make committee members work more deficult to manage. Recovering the dues from members is complicated task as it also harm the personal relation with the committee members and defaulter members.

Under Section 101 of Maharashtra Societies Act (MCS), society can fight the legal battle to recover due from defaulters.

Society Committee can follow below procedure to recover dues from defaulter society member:

1) Issue a simple letter to defaulter (there is no specified format for this) which should have the amount dues, period for payment and also a warning mentioned about “Failuer to make payment, society will make application to society registrar under Maharashtra Societies Act section 101 to recover the outstanding dues”.

2) After the completion of given period on notice to defaulter, committee should pass a resolution to take action against the defaulter.

3) Under the section 101, Society chairman and secretary can take action against the defaulter and has rights to sign all the requried documents which they need to submit to society registrar who will issue the recovery certificate.

4) After the submission of all the papers from society to registrar. Registrar may ask for hearing with defaulter member and verify the records. After verifying and hearing if registrar find the appeal truthful he will issue recovery certificate to society.

5) Once the recovery certificate received by recovery officer, he will prepare the demand notice which will send to Sale Officer and same notice will be attached to property of defaulter member of society.

6) Sale officer will visit the flat of defaulter to prepare and submit the list of inventory of all his moveable property. If defaulter member is still not paying out standing dues even after receiving Demand notice, Sale officer can seize the moveable property and can hand them over to Secretary or Chairman of society for custody.

7) After the seizing auction date is fixed for auction of seized movable property. If the amount received from auction is less  as compared to dues then Sale officer has right to auction the flat of defaulter member.

For More Details – Source

Disclemair : Please note that the contents of this blog have been provided for informational purposes only and are not intended to replace legal advice.

Society Maintenance Charges

How To Calculate Maintenance Charges For Your Housing Society?

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How To Calculate Maintenance Charges For Your Housing Society?

You bought an apartment and you moved in with your family and household items. But have you given a thought about maintenance? Though you own the apartment, you are a resident of the apartment complex, which means you are required to pay monthly charges for the maintenance of the common areas in addition to plumbing and electrical repairs inside your apartment. The expenses incurred in the common area are shared by all the residents and is collected by the residents’ association.

To arrive at the monthly maintenance fee for the apartment, you have to take into account the monthly expenses and an additional amount for maintenance and repairs. Though every residents’ society decides on the method to arrive at a fair and reasonable monthly maintenance fee, there are some general guidelines that one can follow.

You can find some of the popular methods to calculate the maintenance fee for your apartment along with their advantages and disadvantages below:

  1. Equal Fee for All

This is perhaps the simplest of all models where a fixed amount is charged on all apartments. However, it is also one of the most unfair. It works very well in apartment complexes with same sized flats. In most modern complexes, that is not the case and the small apartment owners end up paying an unfair amount of maintenance.

       2. Pay According to Area

The most commonly used and popular method to calculate the apartment maintenance fee is paying according to the area. A rate is fixed for one square feet and then multiplied by the total square feet area of your flat in this method. This means that if you have a larger home, you will end up paying more. The popularity of this method comes from the fact that it is easier to calculate. However, since the common facilities such as lift, garden, club, security services, swimming pool etc. are shared by all members, it is slightly unfair for the large apartment holders to pay more.

        3. Partially Equal Fee

In this method, a particular amount of money is charged on the area up to a predetermined square feet value. Beyond that, any increment in area is charged according to a unit decided by the apartment association.

          4. Hybrid Charges

In order to be fair on the large apartment owners, a hybrid method is implemented by some residents’ societies. The method involves splitting the charges into two with the first part including all the common expenses incurred on lifts, security staff salary, stationary, property taxes, conveyance, audit fees, meeting charges, common electricity etc. The second part includes the area based charges that are specific to the apartments such as water charge and electricity usage.

There is also a non-refundable sinking fund which is charged by the society for major repairs. Every member is supposed to contribute to the sinking fund, which grows over the years. It is conventional to collect at least 0.25% of the construction cost of the apartment excluding the cost of land as sinking fund charges. This also depends on the size of the apartment and the amount stays with the society until repairs are undertaken.

Though it aims to be fair on all parties, there is still a difference in opinion on which items should be charged as per apartment size.

Conclusion

As you have now understood, there is no perfect way to calculate the maintenance fee that an apartment owner should pay the residents’ association. Every model has its own advantages and disadvantages and depending on the apartment complex, the residents’ society should decide which model works best for them and implement it accordingly. Further, a half-yearly meeting should be held to discuss the feasibility of the plan and also to cut down any charges that are imposed unnecessarily.

Source: Artechrealtors (Link)

Sinking Fund for housing Society

Sinking Fund Housing Society – Why Society Need It?

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Sinking Fund Housing Society – Why Society Need It?

It is risky to continue occupation of a building which has run its life. A provision has been made in the byelaws, enabling a co-operative housing society to collect contributions towards a sinking fund from members at a fixed rate per month. The rate fixed under the bye-laws is 1/2 per cent per annum of the cost of construction of a flat, payable in equal monthly instalments, as provided under bye-law No. 67(b)(i) of the bye-laws from the set revised in 1976. A building sinks in course of time due to its wear and tear but the land remains as it is even if the building collapses.

The basis on which the cost of construction of tenanted structures should be fixed: There are some cases which pose problems to societies in adopting the basis for the purpose of fixing the amounts of contributions from members towards the Sinking Fund. There may be societies which have newly constructed buildings as also old tenanted structures, the tenants of which have joined the structures.

There may be some other societies, in which new flats are constructed over the old tenanted structures and tenants thereof have joined the societies. The cost of these old structures is much less than that the cost of construction of the new flats and the contributions from the members of the tenanted structures based on such cost are practically negligible.

A society having a separate old structure on a part of the plot on which a new building is constructed, should ascertain from an architect the future life of the structure and fix the amount of contribution from each member, taking into consideration the cost of reconstruction of a new building thereon, of equal size, if the tenants do not desire new accommodation of large size, at the time when the structure would become due for reconstruction, the area of each flat and the accumulation of the amount of contribution to the sinking fund invested in long term deposit along with interest at the time of starting reconstruction of the structure.

In the latter case, the members of the tenanted structure, on which new flats are constructed have to bear in mind that the reconstruction of the building would include the reconstruction of the structure.

The rate per sq. ft. of reconstruction of the flats is bound to be uniform for all flats. It, therefore, follows that the value of the old structure, for the purpose of fixing the amount of contribution to the sinking fund should be based on the rate per sq. ft. of construction of new flats on the old structure. This would enable the society to build up its sinking fund equal to the cost of reconstruction of the building in course of time.

Source: Times Of India (Link)

omplaint Against Housing Society or RWA

How To Register Complaint Against Housing Society or RWA?

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How To Register Complaint Against Housing Society or RWA?

Modern-day living is driven by community support and hence, in a housing society, Resident Welfare Associations or RWAs have become inevitable. It seeks to simplify housing complex level issues. Here’s why RWAs today are almost your saving grace:

  • Planning, improving and ensuring better living standards
  • Empowering residents to identify areas of conflict while coming up with solutions
  • Effective fund utilisation
  • Addressing common issues in a practical manner
  • Ease of communication

But what can you do if you are not happy with the way your RWA is functioning?

RWAs can be difficult to deal with if not competent. It turns out to be more of a harassment than help. An RWA or the Apartment Owners Association can be sued by any of the members or group of members. If you see a diversion or conflict of interest with respect to the byelaws of this association, a meeting should be held discussing issues in this regard.

Most RWAs prepare for such incidents and therefore, the byelaws may contain information about how and to whom should issues be directed to in the first place. All appeals against the decision of the Managing Committee is usually escalated to the General Body of the Association. The appeal is given to the Secretary in writing and the same is placed before the General Body. The decision of the General Body shall be final and will be communicated to the member concerned in writing.

If problems persist, residents can approach the Registrar of Societies which has the right to cancel the registration of the association. As a last resort, residents can move the court of law as well. These day various residents have been resorting to online forums to bring issues of concern to the fore.

Similarly, even when the Association is dissolved due to any reason, the course of action thereon is usually pre-decided especially with regard to liabilities, left-over properties/ assets etc.

Provisions under Societies Registration Act 1860 lays down the following:

“Every society registered under this Act may sue or be sued in the name of President, Chairman, or Principal Secretary, or trustees, as shall be determined by the rules and regulations of the society and, in default of such determination, in the name of such person as shall be appointed by the governing body for the occasion.”

What makes RWAs mandatory

RWAs are non-political and non-sectarian which makes it the best channel to take up issues that are affecting the residents of the apartment complex and giving it a voice whenever and wherever needed. All RWAs need to be registered and come under a specific jurisdiction which makes it liable to punishment/penalty in case of defaults or lawlessness.

In short, RWAs usually take up addressing each and every aspect of your community life- promote friendly relations amongst residents, ensure availability of civic amenities like water, sanitation, maintenance of roads, parks, street lighting, take up issues related to enforcement of prohibition of causes like drug abuse, procurement of funds for donations or subscriptions, welfare activities such as cooperative medical stores, medical/educational camps, employ help such as carpenters, plumbers, electricians and fix remuneration, promote non-political legal issues of residents and most of all ensure safety and security of residents besides many social, philanthropic activities. RWA’s can also collaborate with urban local bodies (ULB) to implement the priority projects through ULBs’ funds or through the Councilor /MLA/MP funds.

Therefore, it makes sense to have an effective RWA.

Source: Proertytiger (Link)

NOC for Society

Understanding Tenant Agreement Housing Society or RWA

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Understanding Tenant Agreement Housing Society or RWA

Rental agreements are more or less similar all over the country. It mentions various terms of the agreement, which include:

* Amount of rent to be paid every month

* The amount of safety deposit to be paid to the owner on a return basis

* Period of rental agreement

* Number of people occupying the property

* Type of lease – residential or commercial

* Maintenance issues – who will pay the monthly maintenance bills (in case of a property in a housing society), minor repair work charges, major repair work charges and so on

* Termination of lease rules

The rental agreement in India has been designed well to protect the rights of both the lessor and the lessee. Other clauses may be added in the agreement as per the discussions between the two parties.

Lease Agreements & Deposit

Apart from being drawn up for commercial and residential purposes, there are three types of rental agreements based on the duration of the lease:

* Week to week

* Month to month

* A fixed term, not be less than six months or more than 12 months.

The duration of the notice period prior to the termination of the lease depends on the period of the agreement. Once signed, the landlord needs to give the tenant a duplicate copy of the agreement within 10 days of signing or the tenant may withhold the rent till they receive the copy.

The safety deposit amount to be paid for the duration of the lease may be negotiated. Technically, the safety deposit amount is calculated as the first three months rent which is fully refundable subject after the amount of repair and maintenance deductions the landlord has to make. In practice, however, if the landlord is charging a higher amount of deposit, then the rent amount will be lower and vice versa. The deposit amount has to be refunded within a month or the tenant may charge an interest on the amount that is computed on a daily basis.

The Tenant’s Rights

The Indian rental agreement provides ample security to the tenants. Once the tenancy commences, landlord is not allowed to infringe upon the tenant’s privacy. Although, periodic checks of the property are done to check on the maintenance, the landlord has to give prior information before coming or sending their representatives.

The tenant may also ask for repair work or some other changes to be made to the property if they feel it is absolutely necessary. For instance, a tenant may request installing a grill on the balcony or terrace for child proofing.

The Landlord’s Rights

The landlord holds the right to evict the tenants under strict circumstances if they violate any of the terms of the rental agreement. However, a prior notice of at least three weeks has to be served. Also, if the tenant terminates the lease agreement without prior intimation, the landlord has the right to withhold the full security deposit amount.

Extensions

The rental agreement in India is drawn for a period of 11 months. If both the parties want to extend the lease, a new pact must be drawn a month prior to the expiry of the agreement. Further, the landlord is allowed to impose a 10 per cent raise in rent, which means:

* In accordance with the new rent amount, the security deposit amount may also be raised.

* The duration of the rental agreement may be revised.

The rest of the terms and condition will remain the same if both the parties are satisfied and a few additional clauses may be added as per their discussion.

Legal Issues

If the agreement is not honoured by either party, they are free to take legal recourse. The rental agreement has been made flexible so that neither party may be tied down by pre-defined rules in case of exceptional circumstances. The Indian tenancy laws are strict; however, the legal procedure is long and time consuming.

A part of the problem in the system also arises from the subjectivity in the agreement that does not define the terms and conditions very clearly. When an agreement drawn concisely, the tenant and landlord benefit equally.

Source: The Indian Express (Link)

TDS payment for Housing Society

TDS for Housing Society

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TDS for Housing Society

On registration of housing society, the society gets the status of legal entity.
Under the Income Tax Act 1961, a Cooperative Housing Society is taxable entity.
It is mandatory for any legal entities to file TDS return and Income tax returns
thus it is also obligatory to all housing societies to deduct and file TDS Deducted.

What is Tax Deducted at Source (TDS)?

TDS is a certain percentage of payment which is deducted at the time of payment
made to the party, who can be a contractor or professional. TDS is deducted
after considering the amount of payment is made in his favour by the society.
Such deducted payment is paid to the Government account by the society.
The society deducting the tax is called Deductor and the person or company
whose tax is deducted is called Deductee.

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