Legal Question in Real Estate Law in India

Dear Sir,

In the matter of allowing �tenant� (someone who pays rent to use an apartment owned by someone else) in any apartment in our Housing Complex, when the entire property is already submitted to the West Bengal Apartment Ownership Act, 1972, I am of the opinion that no Owner�s Association, registered under the same statute, is empowered to allow any apt-owner to rent-out his/her apartment to a tenant who, in turn is free to use such apartment as rented apartment and enjoy all the common areas and facilities at par with other owners of apartments.

I am not a lawyer but an owner of an apartment. Owing to urgent necessity, I have to study the West Bengal Apartment Ownership Act, 1972 (along with its rules and bye-laws).During my study, I have noted the following grounds/reasons against �allowing tenancy� in any housing complex. I don�t know whether my observation is correct or not. I simply reproduce my thinking for your kind consideration and advice.

Section 4. (1) entitles an apartment-owner to the exclusive ownership and possession of his/her apartment. The legislature has deliberately used the word �exclusive� instead of �absolute� in order to bring this provision in conformity with other provisions of this Act. In effect, the rights of any owner, under the purview of this Act, are seldom absolute and often are in many respects controlled and regulated by the said Act. So, the ownership of any apartment is conditional especially for its common areas and facilities.

Even though the owner of any apartment has the right to occupation in that apartment but has no right to alienate the apartment. More so, the legislature has cautiously used the expression �exclusive� which in effect is conditional in nature and bound by a livelihood which is based on reciprocity of obligations. Hence, the ownership here is not free and unrestricted. Rather, the ownership here is not of independent nature but bound together with other owners.

So, the Section 4. (2) engrafts an exception to the general rule of property. This proviso imposes a restraint on alienation of an apartment. The object behind this restraint on alienation and sub-division is to maintain homogeneity in the housing complex and to prevent fragmentation of an apartment into small portions which will render it uninhabitable. Another purpose for imposition of such restraint is to curb influx of foreign discordant elements into the building with whom, the other resident-owners can hardly accommodate their enjoyment or possession in common interest. Standing on the same reason, we can say that in order to curb influx of the foreign discordant elements into the housing complex, the legislature was silent on tenancy. I therefore presume that in case of allowing tenancy, the intention of the legislature will be the same.

Even in the statement of Objects & Reasons of Act XVI of 1972, no word is used on tenancy rather it is said that the Apartment Ownership Act is intended to regulate the conduct of the owners of the Apartments. Here I suppose, the holy conduct of any apartment-owner is not to let out his apartment and not to invite the dual resident-ship in a single hosing complex.

An Apartment to be Transferable and Heritable Property (Sec-4): The word �transferable� is one of widest import and includes every means by which the property may be passed from one person to another. But transfer of apartment, in order to be valid, must be effected in conformity with the requirements as laid down �by any law for the time being in force�. Therefore, such transfer must be made in accordance with provisions contained in the Transfer of Property Act, Registration Act as well as the provisions contained in this Act. The said transfer may be made either by �the act of the parties� or �by operation of law�. An act of party is nothing more than an expression of the will or an intention of the party-concerned.

So, the apartment owner, by the act of the parties and by expression of their intention, may adopt, in my opinion, self-restricting and self-imposing bye-laws on �not to let out / offer for rent of any of their apartments�. The recognition of owner�s intention and protection of owner�s rights (exclusive owner) are to be taken for proper consideration by the Apartment Owners Association on the basis of adopted bye-laws. Perhaps, no court shall entertain any dispute, in future, against such bye-laws on the ground of violation of fundamental right of owner of the apartment concerned.

Undoubtedly, under Section 4(2) of the present Act, an apartment together with its undivided interest in the common areas and facilities has been declared to be a heritable and transferable property within the meaning of Transfer of Property Act although such apartment is impartable.

Section 4(3) has also given overriding / superseding effect to the provisions contained in the Transfer of Property Act and such a non- obstinate clause has to be read for limited purpose as referred to therein. So, the West Bengal Apartment Ownership Act, Rules and Bye-Laws provide us provisions for an exception to the general rule of property by superseding effect on the Transfer of Property Act. On the strength of this reason, we can adopt self-imposing Bye-Laws instructing/advising all the owners of all the apartments not let-out their apartment to renters for better community living.

Bye-Laws � 31 (a) to (g) impose restrictions on certain acts of the resident of any apartment of the property. This bye-law has recognised such right of an apartment-owner as he is deemed to have an accessory license to do the same in accordance with the principles embodied in Section � 55 of the Indian Easements Act. In model Bye-laws, there is no license given to any apartment-owner for inviting tenant/renter. Moreover, if we abide by the bye-laws that we will not entertain any tenant in our housing complex, then also we can live without any tenant in our housing complex. Is it a tenable argument? By disallowing tenant/renter are we ignoring the fundamental rights of owners in general?

Section -7 of WBAOACT1972 says that no apartment owner shall do any work which would be prejudicial to the soundness or safety of the property or would reduce the value thereof or impair any easement............... . Now, as per definition of the property in Sec. 2(K), we note that �property� comprises the land, the building and the common areas and facilities. Apart from other restrictions, this section (Sec-7) prohibits activities affecting and/or impairing any easement or hereditament annexed with the property. It seems to me that allowing tenancy or allowing foreign discordant elements as tenant or paying guest may destroy the principles of easement or create hindrances against smooth hereditament. We are concerned mainly on curbing of easement rights of other obedient owners of the property. Perhaps, the essential ingredients of easement shall be ignored if permission is given for creation of tenancy against rent. Beneficial enjoyment of the property by other owners of the apartments will be hampered.

Moreover, the definition as contained in the Section 3(d) embraces both � areas � and �facilities� and both these expressions are preceded by the word �common�. The word common has a special significance because the �common areas and facilities� have been set apart for the use and enjoyment of all the owners of the apartments in common and it enumerates some rights including easement right as well as facilities for the enjoyment of the apartment as well as the property since all the apartment owners have a common interest in enjoying the same.

While studying Section � 7 (Certain work prohibited), for its implementation, we find that Section � 2(k) defines the word �property� which comprises the land, the building and the common areas and facilities. In the interest of proper management and administration of the entire property, apart from other prohibitions, this Section has also burdened an apartment owner with the negative duty of doing any work which may cause diminution of the value of the property. This Section has also prohibited activities affecting and/or impairing any easement or hereditament annexed with the property.

Now, the fact is that the �Residential Ownership Apartment� is primarily meant for the living/dwelling of the owners and their families, not for the use of any tenant/renter. It is seen that value of a property is always diminished when the property is occupied by tenant/renter or lease-holder or paying guest. Now, in an ownership residential housing complex, if there are people of different categories viz. Owners, Tenants or Renters and Lease-holders or paying guest, the character of the property will be changed with composition of people of different kinds i.e. heterogeneous in nature. Naturally, in a property-market, the said property must go down the value of the just price which would have been otherwise if no heterogeneous character was there. So, renting /letting out a property is synonymous with reducing the value of the property, which is against the interests of other owners of the property and is contrary to the Section � 7 of WBAOA.

This Section also prohibits activities affecting and/or impairing any easement or hereditament annexed with the property. The problems of effecting the eviction of renters/tenants are known to all. Even a conflict or dispute between Tenant and Landlord may vitiate not only the respective two sides but also create disturbances to other people of the locality. In this way, renting of property, especially residential one, may impair the easement rights of others.

The oaths, undertakings and declarations, which ought to be taken and submitted through registration of instruments and affidavits to the Competent Authority for obtaining approval under Apartment Ownership Act, are to be made from the side of apartment-owners, not from the side of any tenant to any Competent Authority. The liability of violation of any clause of those instruments rests only on owners and not on any tenant. So, the composer of the said Act perhaps may not wanted to solve the housing problems of any tenant but may agree to consider the housing problem of the purchaser of any apartment or owner of any apartment.

Only owners are under obligation to follow the Act and its bye-laws. Apartment Owners� Association is also liable to care-take the property in general as per the obligation of the related act, rules and bye-laws. But the tenant is boundless. The only obligation, which the tenant has to follow, is towards Tenancy Act and not to the West Bengal Apartment Ownership Act.

It is said that not just resident-owners, even tenants or paying guests are entitled to use all common areas and facilities as a matter of right, for they represent the owners during their authorized occupation. Is it true?

'Rent' refers to the mutually fixed amount of money that is paid in lien for possession of the property of landlord for a fixed period of time. A person who pays rent to live or use someone else's land or property is a tenant/renter. He/she possesses the property for the period of tenancy and uses it as per his/her requirements. The tenant enjoys the ownership (de facto) of the property even if he uses it for a limited period of time. Since he has assumed ownership of the property for a certain time period, he should attempt at making his stay pleasant and not invite any legal action from the landlord. But if the tenant willingly or unwillingly invites legal action from the landlord, the Apartment Owners� Association also faces troubles as seen elsewhere. Why shall the Association undertake such burden of troubles which is out of the orbit of the West Bengal Apartment Ownership Act 1972 ?

Moreover, another purpose for imposition of such restraint is based purely on opening of holes on the security aspects in a housing complex. As per the recommendation of Kolkata Police, there is a standing rule to submit and get check-up of the antecedents of every tenant from a nearby police station. Who will verify the details of the tenant from police? If the owner of that particular apartment, who wants to create tenancy, disagrees to submit details of the tenant as per the Form (form to be prepared suitably) given by the Association, what should be the bye-laws to be followed by the Association and what should be the penalty if those bye-laws be violated and under what statute will it be protected?

Kindly advise on (1) creation of restraint on allowing tenancy from the side of Owners� Association and preparation of the suitable bye-laws for the said purpose or suggest on (2) if the permission is given by the Owners� Association against suitable undertaking from the side of apartment-owner who wants to create tenancy, then what should be the suitable bye-laws, proper undertaking and form to be filled up ? Hope to get your co-operation in the matter.

Thanking you,

Dated 26th April, 2012 Yours faithfully,

EMAIL: [email protected]

Subrata Banerjee

Phone- 9433153153

Addition:

�Society wants you to efface your individuality completely, society does not like individuals. It likes you to become a member of society and not an individual�. � Osho

�We are society; we are not independent of society. .......And the society in which we live is part of that life. Society is co-operation.� � Jiddu Krisnamurti.

Now, let us revert to the legal question. The question of individual ownership in respect of an apartment does not arise as the element of ownership does not enter into the definition of expression �apartment� although 4(1) of this Act entitles an apartment owner to the exclusive ownership and possession of apartment (vide K.R.Agarwal v Dr. Balkrisna Jawar, AIR 1972 Bom 343: ILR (1973) Bom 373: 1972 Mah LJ 374: 74 Bom LR 238).

Section 3 (b) defines the expression �Association formed in accordance with the provision� made in the bye-laws. Clause � 3 of the West Bengal Apartment Ownership Bye-laws, 1974 provides for the manner and mode of the formation of this Owners� Association.

In effect, it is needless to state here that once an owner becomes a member of the Association, he loses his individuality qua the Association and he has no independent rights except those granted to him by the statute and bye-laws. He must act and speak for through the Association or rather the Association alone can act and speak for him qua the rights and duties of the Association as a body (vide Daman Sing v State of Punjub, AIR 1985 sc 9731985) 2 SCC 670).

The contextual exposition of the intention of the legislature, as expressed in the Objects & Reasons of Act XVI of 1972, can be found if the definition of �exclusive ownership� is read along with other provisions of restrictions of the said Act. An owner of an apartment, under this Act, is an owner of limited purpose. Because of the fact as stated above, the Owners� Association is given power and legal backup for the management and administration not only of the common areas and facilities but also of the property in general.

In addition, the exercise of general supervision on overall affairs of community living is also its paramount responsibility. So, if the general meeting by majority decides to restrains an offer for rent of apartment, the Association can restrict the entry of any renter-resident to any residential housing complex. But the question is whether this restriction is tenable in court of law.

Moreover, if an apartment is given out on a lease by any owner to a company etc, wherein different tenants are staying or started living for a short period, the said apartment has thus become a service-apartment or guest house which is commercial in nature. In my opinion, the Association can disallow it. Why shall the Association undertake the additional burden of administration and caretaking of such rented apartment, which is bypassing the related law and bye-laws or which is out of the jurisdiction of its power and responsibilities?

If we are to allow renter in our housing complex, can we take the following bye-laws?

*Steps to be taken in case of offer for renting-out of any apartment :

If any apartment is proposed to be given by lease or rent, then the respective apartment-owner should intimate the Association in advance about the personal details of the lessee or the tenant in the prescribed form, available at Association�s office room, and submit the same in duplicate along with the photo of the renter and photocopies of relevant documents.

A copy of particulars duly filled in is to be deposited at Shyampukur Police Station and �the received copy� of the same is to be submitted to the Association office before the respective apartment is occupied by the tenant. As all the apartments are for residential use, apartment � owner will be permitted to lease or rent out his/her apartment for the residential purpose only after obtaining �No Dues Certificate� from the Association.

*Bye-Laws to be binding on apartment owners, tenants, etc.

(1) All apartment owners, tenant of such owners, employees of apartment owners or tenants, or any other person who may, in any manner, use the property or any part, thereof to which this Act applies, shall be subject to the provisions of this Act and the bye-laws and the rules made hereunder.

(2) All agreements, decisions and determinations lawfully made by the Association of Apartment owners, as the case may be, in accordance with the provisions of this Act or the bye-laws shall be deemed to be binding on all apartment owners and residents.

*Personal application:

(a) All apartment owners, tenants of such owners, employees of owners and tenants, or any other persons or residents who may in any manner use the property or any part thereof submitted to the provision of this act shall be subject to this act and to the declaration and bylaws of the Association of apartment owners adopted pursuant to the provisions of this act.

(b) All agreements, decisions and determinations lawfully made by the Association of apartment owners in accordance with the voting percentages established in the act, declaration or bylaws shall be deemed to be binding on all apartment owners.

Ownership: There are various rights or incidents of ownership, all of which need not necessarily be present in every case. In this Act (The West Bengal Apartment Ownership Act 1972), the legislature has not deliberately conferred upon him absolute ownership in relation to the property of which an apartment is a part for better management of an apartment or the property as a whole. So, in the interest of the better management for a part of the property i.e. unit of each apartment, it is necessary for the Apartment Owners� Association not to allow any tenant/ renter in any apartment, situated within the housing complex.

Association of Apartment Owners: Section 3(b) defines the expression �Association of Apartment Owners� as meaning �the Association formed in accordance with the provision� made in the bye-laws. Clause � 3 of the West Bengal Apartment Ownership Bye-Laws, 1974 provides for the manner and mode of the formation of the Association.

Statement of Objects & Reasons: To find out the objects and reasons for giving birth of an Act, it can be relied upon for understanding the back-ground of the statutory provisions and the need for introducing the said provisions. Though it �can not be the ultimate guide� in constructing the provisions of the statute, it often assists the Court in ascertaining the reasons what really prompted the legislature to enact a particular provisions [Bharat Singh V Management of New Delhi Tuberculosis Centre, AIR 1986 SCC LAB 335 vide also Chandra Kumar Saha V The District Judge, AIR 1976 AII 328 (FB)]. So, it is an external aid in interpreting the terms of the statute which is not exhaustive and the meaning of which is uncertain. Moreover, the Court can get sufficient guidance even from the Law Commission Reports and Legislative Debates relating to any Act. Moreover, it is the cardinal principal of interpretation that the statute should be understood in its plain, literal and grammatical meaning. And the best mode of interpretation is to ascertain the true legislative intent.

Moreover, it is necessary to make textual interpretation match the contextual constructions. In construing different provisions of the statute, Court should harmonise different parts of the statute which has been held to be the best mode of interpretation. Then again, to promote its objectives, it is the duty of the Court to give a beneficent construction of the statute in case of a Social Welfare Legislation in order to render the provisions more effective without doing any violence to the language. So, though it does not form a part of any statute, a preamble is generally appended to a statute to offer guidance for resolving any doubt as to the meaning of any provision in the Act.

This Act of 1972, sets out the objective of providing for ownership of an individual apartment and making such apartment heritable and transferable property. So, this Act was enacted as it was felt that in the Social Welfare State, the concept of absolute title has undergone change for various reasons.

In that contextual scenario, in order to solve the housing problem of the people as well as to encourage the construction industry for the economic growth of the country, the construction of dwelling houses/units in group scheme were given timely relief especially in respect of solving legal trappings viz. on hire-purchase scheme, bank loan on house building, apartment-wise ownership etc. Absence of any legislation relating to the inheritance of such apartment and transferability of such apartment in group scheme has prompted the legislature to enact this particular Act. This Act was promulgated for making an apartment heritable and transferable property (Ashoka Marketing Ltd V Hanshree Apartment Owners Association (1985) 2 CLJ 1).

Naturally, whereas the West Bengal Apartment Ownership Act is intended to regulate the conduct of the purchasers of the apartments constructed and sold by the promoters, the West Bengal Apartment (Regulation of Construction and Transfer) Act of 1972 is supposed to regulate the actions of the promoters. The purpose of both the legislations has been to protect the interest of the people in need of housing units.

Keeping in view of proper management, maintenance and upkeep of the housing stock, the legislature felt it necessary to make the application of the Act compulsory (Amending Act XXXI of 1992). This amendment has also brought out the intention of the legislature that the user of the building is required mainly for residential purpose.

The present Act providing for ownership of an individual apartment and making the same heritable and transferable falls within Entries 6 & 7 of the List III of the Concurrent List under VII Schedule of the Constitution. Under Article 200 of the Constitution of India, the assent of the President has been obtained and the Act has also made provisions for giving �overriding effect� over some of the Central Acts like the Transfer of Property Act and Indian Trust Act.

Repugnancy: If there is any inconsistency between two Acts, the provisions contained in this Act shall prevail under Article 254 (2) of the Constitution of India.

Therefore, the sole owner or all the owners of every such building are left with no option of submitting the same to the provisions of the Act and purpose of the residential use is one of the vital conditions precedents to the submission of every such building under the Act.

Removal of Doubts (Sec-18): This Section declares categorically that the provisions of the Transfer of Property Act 1882, shall, insofar as they are not inconsistent with the provisions of the present Act, apply to every apartment together with its undivided interest in the common areas and facilities as those apply in relation to any other immovable property. This Section has to be read as clarifying legal position and must be understood to have been incorporated in this statute by the legislature by way of abundant caution and not by way of limiting the ambit and scope of the operative part of the enactment.

Now the question is still arises as to whether an apartment can be let-out for hire when there is no absolute restriction or on the contrary, any permission on allowing rented apartment. As this Act makes an apartment transferable, it does recognise an interest in the property. But, there are no provisions in the Act to indicate that right to occupy is transferable in execution of tenant-ship or right to occupy is convert able to someone who pays rent to use an apartment owned by someone else. Even there is nothing in the Act to show even remotely a prohibition against conversion of user-ship of an apartment from Owner to Renter. In such a situation, if we impose a ban on entry of renter in any of the apartment including its proportionate share of common areas and facilities within our housing complex by adopting a suitable resolution on the basis of majority of votes and thereby include a proper bye-laws banning let-out of any apartment, shall it be tenable in court of law? Option: �No to Renter� or �Permission for Renter� ---- Kindly advice the best solution, thanks.

I owe my obligations: I have taken plenty of help from the book �Law of Ownership of Apartments/Flats in West Bengal� by Tapas Kumar Mukherjee, M.A., LL.B. Advocate, High Court, Kolkata. Published by Book-N-Trade, 6, K.S.Roy Road, Kolkata � 700 001.

Dated 29th April, 2012 Yours faithfully,

EMAIL: [email protected] Subrata Banerjee

Phone- 9433153153

Tenant Police Verification

As a law-abiding citizen it is our duty to inform the local police of our tenant's antecedents. To be precise it's not only a mere duty but rather it's mandatory. The prescribed format for the same is available from the nearest police station or can be downloaded. It is a simple questionnaire where you provide your details and your tenant's detail along with his/her photograph.

Our tenant's identity has to be verified by the local authorities by sending the tenant's details regarding his/her last known residence (for clearance of any crime) to the police station. It has been found that terrorists usually camouflage by staying as innocent boarders or paying guests. So it's highly advisable to submit the same to assure peace of mind and safety.

Guide to submitting the form

1) Fill-up the form � giving details of both tenant and landlord.

2) Attach the latest photo of your tenant.

3) Sign at the bottom.

4) Submit at the nearest police station.

5) Collect your acknowledgement receipt and keep it as a reference.

FORMAT FOR INFORMATION OF TENANTS

1. Name of Landlord __________________________________________________

Occupation with

Details office, phone no. _______________________________________________

2. Address _____________________________________________________________

Phone No. ___________________________________________________________

Particulars of tenant to whom premises let out

1. Name __________________________Father�s Name _________________________

2. Occupation with details of office phone number ______________________________

_____________________________________________________________________

_____________________________________________________________________

3. Age ___________

Family Members: _______________________________________________________________________

Names Age Relationship

_______________________________________________________________________

_______________________________________________________________________

4. Present Address __________________________________________________________

5. Previous residence address _________________________________________________

and telephone no. date of

leaving _________________________________________________

6. Permanent address and

telephone number _________________________________________________

_______________________________________________________________________

7. Details of either any one of the following

Passport, Driving License, Arms License,

Ration Card, Voter Card,

Income Tax (Pan No.) _______________________________________________

_______________________________________________________________________

Signature of landlord

--------------------------------------------------------------------------------------------

ACKNOWLEDGEMENT

Receiver from Shri / Smt. ______________________S/o _________________________

R/o ______________________________________________Ph. No.________________

Intimation of letting out _________________________to Shri _____________________

S/o _______________________________

Date Diary No. Signature of Recipient _______________________

Name & Designation ________________________

Police Station __________________Seal:

Format - 2

To,

The Inspector of Police, Photograph of the Tenant/ Paying

_____________ Police Station, Guest / Licensee

Kolkata -

Pine Code - __________.

Subject : Particular of the tenant / paying guest / licensee

1 Name and Address of : ------------------------------------------------------------------

premises owner / ------------------------------------------------------------------

licensor

2 Name and Address of : ------------------------------------------------------------------

the premises let out / ------------------------------------------------------------------

rented

3 Name and Address of : ------------------------------------------------------------------

the premises let out / ------------------------------------------------------------------

rented

4 Native place address :

of the tenant / paying a. Village : ----------------------------------------------------

guest / licensee

b. Local Police Stn.: ----------------------------------------

c. Local Rly. Stn.: -------------------------------------------

d. Tal.: --------------------------------------------------------

e. Dist: -------------------------------------------------------

f. State: -------------------------------------------------------

5 Previous address of : -------------------------------------------------------------------

the Consecutive stays -------------------------------------------------------------------

6 Place of work / Tel : -------------------------------------------------------------------

No. of tenant / paying -------------------------------------------------------------------

guest / licenses

7 Name and Address of : -------------------------------------------------------------------

two references in city -------------------------------------------------------------------

8 Family member name : -------------------------------------------------------------------

and address, relations -------------------------------------------------------------------

9 Details of Estate : -------------------------------------------------------------------

Agent ------------------------------------------------------------------

10 Details of Vehicles : ------------------------------------------------------------------

used by tenant / -------------------------------------------------------------------

paying guest / licensee

The particulars of the tenant / paying guest / licensee furnished above are true to the best of my knowledge and record.

I am aware that falsehood of any of these details shall entail criminal prosecution against me as per law.

(Signature) (Signature)

Tenant / Paying Guest / Licensee Owner / Landlord / Licensor

1 Answer from Attorneys

Related Questions & Answers

More Real Estate and Real Property questions and answers in India

Looking for something else?