Condominium an Alternative to Cooperative Society Needs Due Recognition

Share It

CA Narayan Mantri, CEO, Proteus Advisors Pvt. Ltd speaking with Sapna Srivastava Editor, Realty+ explains the concept of Condominium in Indian Context and its misappropriation across the realty sector. There are various articles on the internet where you can read about what a Condominium is and how it’s different from a Cooperative Society. So this article is not to make people aware about the concepts of a condominium but to highlight why this particular concept has been misused by the builders and how the administration has facilitated it and how the judiciary so far has not shown its capability in resolving the disputes around this concept in Maharashtra, mainly Mumbai. Registrar of Co-operative Society Oblivious Of the Law Condominiums in Mumbai, Maharashtra are governed by Maharashtra Apartment Ownership Act, 1970, a law which the State made in 1970 but forgot about it till recently i.e. 2018-2020 when question of deterioration of old condominium buildings could not be resolved and it became inevitable for the State to make amendments in the said Act. Rules to the said act were made in 1972 but were not implemented by the so called “Competent Authority” describe in the Said Act for many years now. The Registrar of Co-operative society which has been designated as the Competent Authority remained apparently unaware of the law and the office hardly accepted any documents in these years from the condominiums as required by the said Act and the Rules made thereunder to be submitted to the said authority and never kept any records of the condominium so that general public could have asked for it by any legal route including RTI. City Survey Department Shortcomings In Mumbai, City Survey Department which is keeping the property card records only updated the entries related to registration of a condominium through a Deed of Declaration at sub-registrar but so far failed in sub dividing the property including the land, in its records as per the said declaration among the condominium apartments which had become separate properties, on its surrender to the provision of the said Act. Subsequent conveyance of these separate apartment properties along with proportionate share in the land executed through “Deed of Apartments” have not been recorded by the City Survey department in the property card records. So there is no due mutation happening of the condominium properties in Maharashtra. Non-recognition by Property Tax Department Property tax department also does not consider the condominium apartments in Mumbai as separate properties and have allotted only single property tax number to the entire condominium building and has been making joint tax assessment as if it’s a cooperative society. In such cases builders or the association of owners collect the property tax from the apartment owners and pay to the authorities. The property tax bill which should have been coming in name of separate apartments owners is coming either in name of the builder or in the name of Association which is just an administrative body and more so not even liable to tax in its capacity like a cooperative society. This method has its own limitation and one defaulter can get others into troubles with unending legal battles between owners, builders, associations and authorities. Limitations of Assessment Officers Assessment Officers remained confused so far as to how they can assess a common area in a condominium building for tax and hence they preferred a method of assessment similar to the one they have been following for a cooperative society. However, they have been remained negligent to read Section 18 of the Maharashtra Apartment Ownership Act, which clearly provides for separate assessment of each apartment. It’s mentioned therein that the common areas cannot be assessed separately but has to be assessed along with the apartment to which these are appurtenant to as per the % share proportion mentioned in the Deed of Declaration. Section 18 also mentions that the authorities should make relevant rules and procedures to implement the provision of the Act. This provision has an overriding effect on any state or municipal law in force. Inspite of the said provision being a non obstante one, it remains elusive for the assessment officers for unknown reasons. Violations by the Developers Due to above the Assessment Officers in Mumbai also failed to evoke Section 151 of MMC Act against the builder for his failures to serve notices under Section 149 and 150 of MMC Act which requires him to inform the assessment office about his entering into Deed of Apartments for transfer of the Condominium apartments and therefore remains principally liable for the entire property tax for his negligence before due mutation of the said property in the property tax records in name of the purchases . Even Building Proposal department do not even see before granting Occupation Certificate (OC)to a Condominium building as to whether the building plan submitted by the developers for it matches the plan submitted by him with Deed of Declaration and on basis of which Deed of Apartments are registered with Sub-Registrars by him. In case of any mismatches, the sword of violation under MRTP Act and regularisation is on the head of innocent and bonafide condominium apartment owners who purchased it on basis of Deed of Apartments without actual awareness of OC plans. The Confusion Various disputes related to ownership, use of common areas, property tax, building plans, structural changes, distribution of common income and expenses are now fought in various courts including consumer courts and recently with Registrar of Cooperative Societies too. The judiciary is also confused due to incorrect application and evoking of various real estate related laws like MOFA, RERA, MRTP & MMC Act etc. to the condominium properties without first addressing the systemic failure in implementing Maharashtra Apartment Ownership Act, 1970 by the administration. These so called Acts may be applicable but not in a straight forward manner to a Condominium property and have to be read with its main governing law. Conclusion Non proper enforcement of the Maharashtra Apartment Ownership Act, 1970 since last 50 years remains a mystery and perhaps leaves one wondering as to why it’s so popular among the builders while the administration has utterly failed in even acknowledging its existence. Solutions to the current problems of the condominium properties are possible only and only when government, its departments and courts do their duties in this respect which is now long pending towards the citizens.