Often, it becomes difficult to determine the binding effect and nature of resolutions passed by apartment owners’ associations on the apartment owners / members who constitute the Association. This ambiguity is centred around a number of questions: whether the rules and regulations framed by the apartment association are binding on all owners, which enactment governs the bye laws so formed by the Association and what is the nature of resolution/s so passed by the apartment owners’ association. In order to answer these questions, it is necessary to know the statute that governs the administration of Apartment Owners’ Associations in the state of Karnataka.
The Karnataka Apartment Ownership Act, 1972 (hereinafter referred to as the Act) regulates the ownership of apartments, transferability, and matters connected therewith in the state of Karnataka. Section 24 of the Act deals with the nature of decisions taken by the apartment owners’ association and their binding effect on the owners. It states that all agreements, decisions and determinations law-fully made by the Association of Apartment Owners in accordance with the Act, Declaration or Bye-Laws shall be deemed to be binding on all apartment owners. Resolutions are nothing but decisions taken by the Association at their General Body Meetings or Special General Body Meetings. The Act also states that all apartment owners, tenants or any other persons who use the property in any manner must adhere to the provisions of the Act, declaration and Bye-Laws of the Association. It is a settled position of law that the agreements, decisions and determinations made by the apartment owners’ association formed under the Act of 1972 are binding on all parties involved. However, for the resolution and other decisions of the apartment association to be enforceable, it is necessary for it to be in pursuance of the provisions of the Act. The nature of the resolution passed must be such that it is passed in line with the voting percentages prescribed in the Bye-Laws compliant to the Act. In fact, the Bye Laws of an Association are nothing but an agreement between the members and the association which makes not just the Bye Laws but also all resolutions, agreements, decisions in pursuance of the Bye Laws binding on all its members. The same was reiterated in the T.P. Daver v. Lodge Victoria in which the supreme court with reference to Bonsor v. Musicians’ Union and Maclean v. Workers held that a contract comes into existence once the rules and regulations of the association is accepted by its members, therefore, it is binding on the parties to the contract made.
Written by M Yasodha, a intern of Smriti Legal LLP.
Author Bio
HOW MANY MEMBERS TO SIGN A RESOLUTION OF A FLAT OWNERS ASSOCIATION TO OPEN BANK ACCOUNT