15. Association of Apartment Owners and bye-laws relating thereto.—(1) There shall be an
Association of Apartment Owners for the administration of the affairs in relation to the apartments and
the property appertaining thereto and for the management of common areas and facilities:
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Provided that where any area has been demarcated for the construction of multi-storeyed buildings,
whether such area is called a block or pocket or by any other name, there shall be a single Association of
Apartment Owners in such demarcated area.
(2) The Administrator may, by notification in the Official Gazette, frame model bye-laws in
accordance with which the property referred to in sub-section (1) shall be administered by the Association
of Apartment Owners and every such Association shall, at its first meeting, make its bye-laws in
accordance with the model bye-laws so framed, and in making its bye-laws the Association of Apartment
Owners shall not make any departure from, variation of, addition to, or omission from, the model
bye-laws aforesaid except with the prior approval of the Administrator and no such approval shall be
given if, in the opinion of the Administrator, such departure, variation, addition or omission will have the
effect of altering the basic structure of the model bye-laws framed by him.
(3) The model bye-laws framed under sub-section (2) shall provide for the following, among other
matters, namely:—
(a) the manner in which the Association of Apartment Owners is to be formed;
(b) the election, from among apartment owners, of a Board of Management by the members of
the Association of Apartment Owners;
(c) the number of apartment owners constituting the Board, the composition of the Board and that
one-third of members of the Board shall retire annually;
(d) the powers and duties of the Board;
(e) the honorarium, if any, of the members of the Board;
(f) the method of removal from office of the members of the Board;
(g) the powers of the Board to engage the service of a Manager;
(h) delegation of powers and duties of the Board to such Manager;
(i) method of calling meetings of the Association of Apartment Owners and the number of
members of such Association who shall constitute a quorum for such meetings;
(j) election of a President of the Association of Apartment Owners from among the apartment
owners, who, shall preside over the meetings of the Board and of the Association of Apartment
Owners;
(k) election of a Secretary to the Association of Apartment Owners from among the apartment
owners, who shall be an ex officio member of the Board and shall keep two separate minutes books,
one for the Association of Apartment Owners and the other for the Board, pages of each of which
shall be consecutively numbered and authenticated by the President of the Association of Apartment
Owners, and shall record, in the respective minutes books, the resolutions adopted by the Association
of Apartment Owners or the Board, as the case may be;
(l) election of a Treasurer from among the apartment owners, who shall keep the financial records
of the Association of Apartment Owners as also of the Board;
(m) maintenance, repair and replacement of the common areas and facilities and payment
therefor;
(n) manner of collecting from the apartment owners or any other occupant of apartments, share of
the common expenses;
(o) resignation and removal of persons employed for the maintenance, repair and replacement of
the common areas and facilities;
(p) restrictions with regard to the use and maintenance of the apartments and the use of the
common areas and facilities, as may be necessary to prevent unreasonable interference in the use of
each apartment and of the common areas and facilities by the several apartment owners;
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(q) any matter which may be required by the Administrator to be provided for in the bye-laws for
the proper or better administration of the property;
(r) such other matters as are required to be, or may be, provided for in the bye-laws.
(4) The bye-laws framed under sub-section (2) may also contain provisions, not inconsistent with
this Act,—
(a) enabling the Board to retain certain areas of the building for commercial purposes and to grant
lease of the areas so retained, and to apply the proceeds of such lease for the reduction of the common
expenses for maintaining the building, common areas and facilities, and if any surplus is left after
meeting such expenses, to distribute such surplus to the apartment owners as income;
(b) relating to the audit of the accounts of the Association of Apartment Owners and of the Board,
and of the administration of the property;
(c) specifying the times at which and the manner in which annual general meetings and special
general meetings of the Association of Apartment Owners shall be held and conducted;
(d) specifying the time at which and the manner in which, the annual report relating to the
activities of the Association of Apartment Owners shall be submitted;
(e) specifying the manner in which the income derived and expenditure incurred by the
Association of Apartment Owners shall be dealt with, or as the case may be, accounted for.
16. Insurance.—(1) The Board or Manager—
(a) shall have, if requested so to do by a mortgagee having a first mortgage covering an
apartment, the authority to, and
(b) shall, if required so to do by the bye-laws or by a majority of the apartment owners,
obtain insurance for the property against loss or damage by fire or other hazards under such terms and for
such amounts as shall be so requested or required.
(2) Such insurance coverage shall be written on the property in the name of such Board or Manager as
trustee for each of the apartment owners in the percentages specified in the bye-laws.
(3) The premia payable in respect of every such insurance shall be common expenses.
(4) The provisions of sub-sections (1) to (3) shall be without prejudice to the right of each of the
apartment owner to insure his own apartment for his benefit.
17. Disposition of property, destruction or damage.—If within sixty days of the date of damage or
destruction to all, or part of any property, or within such further time as the competent authority may,
having regard to the circumstances of the case, allow, the Association of Apartment Owners does not
determine to repair, reconstruct or re-build such property, then, and in that event,—
(a) the property shall be deemed to be owned in common by the apartment owners;
(b) the undivided interest in the property owned in common, which shall appertain to each
apartment owner, shall be the percentage of the undivided interest previously owned by such owner in
the common areas and facilities;
(c) any incumbrances affecting any of the apartments shall be deemed to be transferred in
accordance with the existing priority to the percentage of the undivided interest of the apartment
owner in the property;
(d) the property shall be subject to an action for partition at the suit of any apartment owner in
which event, the net proceeds of sale together with the net proceeds of the insurance on the property,
if any, shall be considered as one fund and shall be divided amongst all the apartment owners in the
percentage equal to the percentage of undivided interest owned by each apartment owner in the
property after paying out, all the respective shares of the apartment owners to the extent sufficient for
the purpose and all charges on the undivided interest in the property owned by each apartment owner.
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18. Action.—(1) Without prejudice to the rights of any apartment owner, action may be brought by
the Board of Manager, in either case in the discretion of the Board on behalf of two or more of the
apartment owners as their respective interest may appear, with respect to any cause of action relating to
the common areas and facilities or more than one apartment.
(2) The service of process on two or more apartment owners in any action relating to the common
areas and facilities or more than one apartment may be made on the person, designated in the bye-laws to
receive service of process.