Tag Archives: Housing Society Billing Software

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)

Annual General Meeting Housing Society AGM

How To Conduct AGM of Housing Society In Maharashtra

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How To Conduct AGM of Housing Society In Maharashtra
The bye-laws in Maharashtra prescribe rules for the deadline for holding AGMs, the quorum for such meetings and the business that can be transacted, as well as penalties for members who fail to attend

Every housing society has to adopt bye-laws, for its management and administration. The government of Maharashtra has provided model bye-laws, which can be adopted with or without changes by societies. These bye-laws also cover the rules pertaining to annual general body meetings of the societies.

Time limit for holding the AGM and minimum notice period

As per the model bye-laws for cooperative housing societies in Maharashtra, every housing society has to hold an annual general meeting (AGM) of the society, every year, before 30th September. It is the responsibility of the committee of the housing society, to ensure that the AGM is held within the prescribed period. The notice for convening the AGM, has to be signed by the secretary of the society. The AGM of the society cannot be convened unless a notice of 14 days is given to the members. While computing the 14 days, the date on which the notice is issued and the date of the meeting shall be excluded. Once an AGM is called, it cannot be treated as invalid, unless an order declaring the meeting as such is passed by the cooperative court.

Quorum for AGM

For conducting the business at the AGM, the law stipulates that a minimum number of members need to be present, called the ‘quorum’ of the meeting. A minimum of two-thirds of the total number of members, subject to a maximum of 20, should be present to constitute the quorum for the AGM. Consequently, small societies sometimes find it difficult to ensure the quorum. For big societies, even a small proportion of the total members may add up to 20 members being present in the meeting and constitute a quorum. In case the required quorum is not present within half an hour of the appointed time, the meeting shall be adjourned to a later hour on the same day or to a subsequent date which cannot be earlier than seven days and not later than 30 days from the original date of the AGM. At the adjourned meeting, there is no requirement to have a quorum. However, the mere attendance of one person at the adjourned meeting, shall still not constitute a meeting and therefore, a minimum of two members have to be present even at the adjourned meeting.

Business to be transacted at the AGM

“The main purpose of the AGM of a society, is to adopt and approve the annual accounts of the society by the members and to receive an annual report of the affairs of the society. The auditors of the society are also appointed at the AGM. In addition to the above business, the AGM can take up any other matter, even if the same is not included in the notice.”

However, the members cannot take up any of the following business at the AGM, unless proper notice has been given:

  1. Expulsion of members of the society
  2. Amendment of the bye-laws of the society
  3. Bifurcation, amalgamation, or division of the society
  4. Transfer of property of the society

If the business on the agenda of the general meeting of the society is only partly transacted, then, the meeting can be postponed to any other date decided by the members present in the meeting, which should not be later than 30 days from the original AGM.

What happens if a member does not attend the AGM

If a member does not attend a single general meeting in five years, without the consent of the general body of the society, then s/he will become a non-active member. A non-active member, who does not attend even a single meeting in the next five years becomes liable for expulsion from the society. Moreover, a non-active member does not have the right to participate in the business of the AGM.

Source: Housing.com (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)

Housing Society Waste Management

Housing Society Waste Management

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Housing Society Waste Management

Office bearers of large housing societies may now face prosecution for not treating their wet waste. The Maharashtra Pollution Control Board (MPCB) will be lodging cases against such defaulters. This will be followed by asking local bodies to cut water supply to the society by 20 per cent.

“We have taken a policy decision that office bearers of large housing societies that have not installed organic waste composters (OWCs) or are not treating wet waste will be prosecuted,” a senior MPCB official.

“We are insisting that housing societies with a built up area of over 2 lakh square feet, which require environment clearances, must segregate and treat wet waste by converting it into compost,” he added, stating that they were conducting a survey of such premises.

The official added that later, local bodies such as the BMC, would be issued instructions to initially reduce the quantum of water supply by 20 per cent. Notices have also been issued to housing societies in Mumbai and Pune.

Another MPCB official said that based on a list provided by the BMC, they had sent notices to around 80 large housing societies in Mumbai for not establishing facilities to treat wet waste. “Many of these bulk generators have given undertakings about establishing OWCs,” he added.

“We can take action against office bearers against the relevant sections of the Solid Waste Management (SWM) rules, 2016, for non-compliance. The quantum of the penalty on these waste generators will be decided by the court,” the official explained.

Building projects of an over 20,000 sqm area are given environmental clearances with a condition that all solid waste should be processed in the premises.

BMC officials admit that though the state had issued guidelines under which premises over 5,000 square meters are to treat their own wet waste for the occupation certificate to be issued, it was found that these spaces were being used for purposes such as parking.

Under the SWM rules, all gated communities and institutions with an over 5,000 square meters area shall segregate waste and source and process, treat and dispose off bio-degradable waste through composting or biomethanation within the premises as much as possible.

It defines bulk generators as buildings occupied by the Central and State government or local body departments or undertakings, public sector undertakings, private companies, hospitals, educational institutions, hotels, commercial establishments, markets, places of worship, stadiums and sports complexes with an average daily waste generation rate exceeding 100 kg.

The Mulund, Deonar and Kanjurmarg dumping grounds see around 7,300 metric tons of garbage being dumped there daily. Processing of wet garbage at source will reduce the waste being dumped there.

WASTE MANAGEMENT 

Under SWM rules, all gated communities with an over 5,000 sqm area shall segregate waste, treat and dispose off bio-degradable waste through composting or biomethanation within the premises

Source: DNA, 25-Feb-2018

GST on Housing Society

GST Impact on Housing Society or RWA

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GST Impact on Housing Societies or RWA

Co-operative Housing Societies are entities registered under the co-operative laws of the respective States.

According to Section 2(16) of the Maharashtra Co-operative Society Act, 1960, “housing society” means a society, the object of which is to provide its members with open plots for housing, dwelling houses or flats; or if open plots, the dwelling houses or flats are already acquired, to provide its members common amenities and services.

Simply put these are a collective body of persons, who stay in a residential society. As a collective body, they would be supplying certain services to its members, be it collecting statutory dues from its members and remitting to statutory authorities, maintenance of the building, security etc.

Co-operative Housing Societies – whether amenable to levy of GST

Co-operative Housing Societies

A Society is akin to a club, which is composed of its members. So, can a service provided by a Housing Society to its members be treated as service provided by one person to another. The answer is yes. The following extracts of the GST law will make the position clear.

As per Section 9 of CGST Act, 2017, levy of GST is on supply of goods and services. As per Section 7 expression “supply” includes––

(a) all forms of supply of goods or services or both such as sale, transfer, barter, exchange, licence, rental, lease or disposal made or agreed to be made for a consideration by a person in the course or furtherance of business;

The definition of “person” in Section 2(84) (i) of the CGST Act, 2017 specifically includes a co-operative society registered under any law relating to co-operative societies. Thus a registered co-operative society is a person within the meaning of the term in the CGST Act.

The next question which arises is whether the activity of the society can be said to be in the course or furtherance of business. The definition of business as per section 2(17) of the CGST Act, 2017 is as under

“business” includes––

(a) any trade, commerce, manufacture, profession, vocation, adventure, wager or any other similar activity, whether or not it is for a pecuniary benefit;

(b) any activity or transaction in connection with or incidental or ancillary to sub-clause (a);

(c) any activity or transaction in the nature of sub-clause (a), whether or not there is volume, frequency, continuity or regularity of such transaction;

(d) supply or acquisition of goods including capital goods and services in connection with commencement or closure of business;

(e) provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members;

(f) admission, for a consideration, of persons to any premises;

(g) services supplied by a person as the holder of an office which has been accepted by him in the course or furtherance of his trade, profession or vocation;

(h) services provided by a race club by way of totalisator or a licence to book maker in such club ; and

(i) any activity or transaction undertaken by the Central Government, a State Government or any local authority in which they are engaged as public authorities.

Thus, as per section 2(17)(e) of the CGST Act, 2017provision by a club, association, society, or any such body (for a subscription or any other consideration) of the facilities or benefits to its members is deemed to be a business. The activities of the housing society would thus attract the levy of GST and the housing society would be required to register and comply with the GST Law.

Compliance requirements for housing societies under GST

If the turnover of housing society is above 20 lakhs, it needs to take registration under GST in terms of Section 22 of the CGST Act, 2017. However, taking registration does not mean that the housing society has to compulsorily charge GST in the monthly maintenance bills raised on its members. Notification No.12/2017 -Central Tax (Rate) dated 28.06.2017 at sr.no.77 provides for the following exemption to housing societies:

Service by an unincorporated body or a non- profit entity registered under any law for the time being in force, to its own members by way of reimbursement of charges or share of contribution –

(a) as a trade union;

(b) for the provision of carrying out any activity which is exempt from the levy of Goods and service Tax; or

(c) up to an amount of five thousand rupees per month per member for sourcing of goods or services from a third person for the common use of its members in a housing society or a residential complex

In view of the provision contained at (c) above, a society may be registered under GST, however if the monthly contribution received from members is less than Rs.5, 000/-(and the amount is for the purpose of sourcing of goods and services from a third person for the common use of its members), no GST is to be charged by the housing society on the monthly bill raised by the society. However, GST would be applicable if the monthly contribution exceeds Rs. 5, 000/-.

Certain statutory dues such as property tax, electricity charges etc. form part of the monthly maintenance bill raised by the society on its members. The question would arise whether such charges should be included while computing the monthly limit of Rs.5000/- in terms of clause (c) of sr.no.77 of notification 12/2017 -Central Tax (Rate) dated 28.06.2017. As per clause (b) of the above exemption, exemption is available to housing societies for provision of carrying out any activity which is exempt from the levy of Goods and Services Tax assuming that a housing society is a non-profit registered entity; and property tax and electricity is exempt from the levy of GST. Thus, charges, collected by the society on account of property tax, electricity charges and other statutory levies would be excluded while calculating the limit of Rs.5,000/-.

Further, the question would then arise that if the monthly bill is say Rs. 6,000/- (and the same is on account of services for common use of its members), will GST be applicable on Rs. 6,000/- or Rs.1, 000/-. In such cases, exemption is available up to an amount of Rs.5, 000/ and GST would be applicable on the amount in excess of Rs.5, 000/-

Source: Tax Guru (Link)