In Kerala, the construction of apartments/flats began in or about 1980, whereas in metropolitan cities like Mumbai and Delhi, the concept of Flats was there a century back. In Mumbai, 99% of the middle-class population may be staying in flats and the system of cooperative housing societies is popular. In Maharashtra, apartment owners, through their apex bodies, have been successful in influencing the governments to enact laws for their benefit. In Kerala, the situation is just the opposite, CREDAI (Confederation of Real Estate Developers’ Associations of India) has been successful over the years in influencing and enforcing laws suiting to their benefit.
KERALA APARTMENT OWNERSHIP ACT, 1983 is the first enactment in Kerala with respect to apartments, their transferability, and maintenance of common properties and facilities which has not been properly enforced. The need for an apex body for associations of apartment owners and apartment owners was felt in the year 2000 when several builders abandoned the projects. The apex body of builders, CREDAI, has been successful in influencing the government, local bodies and regulators to enact laws for their benefit but apartment owners remained unorganized.
In order to counter the prevailing situation, Advocate Jacob Mathew Manalil organised a meeting of the apartment owners and their associations at Ernakulam in the year 2000 at J M Manor, Kaloor Ernakulam and decided to team up with Kerala apartment owners. Sri V K Sankarankutty was elected as the first President of the association. Thereafter the association helped many allottees in their struggle against builders and other authorities.
By 2010, the issues concerning real estate became murkier, enormous and more complicated. By that time a large number of developers abandoned the projects after collecting huge amounts from allottees. Lakhs of cases against builders were filed throughout India and no one was willing to invest in upcoming projects. The building industry faced the biggest crisis and lakhs of people lost their life savings due to the diversion of funds by the developers. Many flat owners and investors looked forward to an Apex Association for rendering solutions to their common problems. The first AGM was held in 2012 and then decided to register the association. The association got registered in the year 2013.
Builders have successfully thwarted the attempt of the apartment owners to get their associations registered under the Act. In spite of the judgment of the Kerala High Court dated 13″ November 2014 in W.P.(C) No. 1271 of 2013 directing the Registrars to register apartment owners’ associations under the Apartment Ownership Act, not even a single association could be registered under the Act. The writ petition filed by the Apex Association challenging the validity of certain provisions of the Kerala Apartment Ownership Act,1983 is also pending before the Hon’ble High Court.
The biggest worry of the Developers was that they were not getting money to roll over and found that the public had lost faith in the industry. They approached the political parties and governments seeking their help to revive the industry. They sought a law which would restore the faith of the public in the industry and some kind of legal acceptance of the diversion of funds. The law has gone to the extent of legalizing criminal breaches of trust committed by builders. The Real Estate (Regulation And Development) Act, (RERA) 2016 instead of insisting on 30% of the total cost of the project at least as investment from the developer, has gone to the extent of allowing the diversion of 30% of the funds collected from the allottees and thereby has legalized criminal breach of trust committed by builders to an extent.
Though apartment owners lack the money power to do lobbying with political parties, once it becomes a political force or a vote bank, our demands will also be heard by the lawmakers. If ‘apartment owners’ are a force to reckon with, then they can demand that the Real Estate Act be amended so as to make it compulsory for every builder to invest 50% of the project cost which can be withdrawn only after successful completion of the project or can demand that every builder give a fifty-year warranty for the structure of the apartment complexes. Hence it is necessary to have an organization to protect the interest of the apartment owners failing which the law may on the demand of the developers, get amended permitting the diversion of 50% or 60% of your investment. In fact, one MP close to the builders has already made such a demand. It is high time the allottees/owners of apartments became a force to achieve their shared goals to get justice.
Pathbreaking Judgements
