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• What is the Odisha Apartment (Ownership and Management) Act, 2023? The Odisha Apartment (Ownership and Management) Act, 2023 (Odisha Act 8 of 2023) is an Act to consolidate the laws relating to ownership of an individual apartment in a building with an undivided interest in the common areas and facilities. It also provides for better management of such apartments and for matters connected therewith or incidental thereto. This Act was assented to by the Governor on October 27, 2023, and published for general information on the same date. It was enacted by the Legislature of the State of Odisha in the Seventy-fourth Year of the Republic of India.
• When did the Act come into force and where does it apply? The Act is deemed to have come into force on the 28th day of June, 2023. It extends to the whole of the State of Odisha.
• To which apartments or buildings does this Act apply? The provisions of this Act apply to all apartments or buildings converted into apartments, irrespective of whether their construction was made before or after the date of commencement of this Act. This includes properties on freehold land or on leasehold land, if the lease for such land is for a period of thirty years or more, including the sub-lease. The Act governs all apartments used or proposed to be used for residence, office, practice of any profession, or for carrying on any occupation, trade or business, or for any other type of independent use.
• What types of buildings are excluded from the Act’s provisions? The provisions of this Act shall not apply to a building used for the purpose of holding office or otherwise of a Department of Government or of a Government undertaking. It also does not apply where the building is owned and used by the owner by himself or for letting it out to others.
Key Definitions
• What is an “apartment” according to this Act? An “apartment” means a part of any property intended for any type of independent use, including one or more rooms or enclosed spaces located on one or more floors or any part or parts thereof, in a building intended to be used for residence or office or for the practice of any profession or for carrying on any occupation, trade or business or for any other type of use ancillary to the purpose so specified.
• Who is considered an “allottee” and an “apartment owner”?
◦ An “allottee” in relation to an apartment means the person to whom an apartment has been allotted, sold or otherwise transferred by the promoter. This definition includes the person who subsequently acquires the said allotment through sale, transfer or otherwise, but does not include a person to whom such apartment is given on rent.
◦ An “apartment owner” means the person or persons owning an apartment and an undivided interest in the common area and facilities appurtenant to such apartment. This also includes a promoter in respect of the apartments which have not been allotted, sold or otherwise transferred.
• What are “common areas and facilities” as defined by the Act? “Common areas and facilities” are broadly defined and include:
◦ The entire land of the project or, in phased developments, the entire land for that approved phase.
◦ Staircases, lifts, staircase and lift lobbies, fire escapes, and common entrances and exits of buildings.
◦ Common basements, terraces, parks, play areas, open parking areas, and common storage spaces.
◦ Premises for lodging management personnel (including watch and ward staff) or community service personnel.
◦ Installations of central services like electricity, gas, water, sanitation, air-conditioning, incinerating, water conservation systems, and renewable energy.
◦ Water tanks, sumps, motors, fans, compressors, ducts, and all apparatus connected with installations for common use.
◦ All community and commercial facilities provided in the project.
◦ All other portions of the project necessary or convenient for its maintenance, safety etc., and in common use.
◦ Rainwater harvesting structures, solid waste management, composting pits, and plantation or other uses notified by the State Government.
• How are “common expenses” and “common profits” defined?
◦ “Common expenses” include:
▪ Expenses declared as common expenses by the Act, declaration, or bye-laws.
▪ All sums assessed against the apartment owner by the association of allottees or the competent authority.
▪ Expenses for administration, maintenance, repair, or replacement of common areas and facilities.
▪ Expenses agreed upon as common expenses by the association of allottees.
◦ “Common profits” mean the balance of all income, rents, profits, and revenues from the common areas and facilities remaining after the deduction of common expenses.
• Who is a “promoter” under this Act? A “promoter” is defined comprehensively and includes:
◦ A person who constructs or causes to be constructed an independent building or a building consisting of apartments, or converts an existing building or part thereof into apartments. If the constructor is different from the owner, the term includes both.
◦ Any Development Authority or public body constructing apartments on lands owned by them or placed at their disposal by the Government, in respect of their allottees.
◦ Any co-operative housing society constructing apartments for its members, in respect of the allottees of such apartments.
◦ Any other person acting as a builder, colonizer, contractor, developer, estate developer, or claiming to act as a power of attorney holder from the landowner.
◦ Such other person who constructs any apartment for sale to the general public.
Ownership, Transfer, and Responsibilities
• Is an apartment considered heritable and transferable property? Yes, an apartment, along with its undivided interest in common areas and facilities appurtenant to such apartment, is heritable and transferable immovable property within the meaning of any law currently in force. An apartment owner may transfer their apartment and undivided interest through sale, mortgage, lease, gift, exchange, or any other manner, and may also make a bequest of it, subject to the same rights, privileges, obligations, and liabilities as other immovable property.
• Can an apartment and its undivided interest in common areas be partitioned or subdivided? No, an apartment and its undivided interest in common areas and facilities appurtenant to it shall not be partitioned or sub-divided for any purpose whatsoever, and any covenant to the contrary is void.
• How are encumbrances created against apartments and common areas? An apartment owner may create any encumbrance only against the apartment owned by him and the undivided interest in the common areas and facilities appurtenant to such apartment. This is done in the same manner and extent as other separate parcels of property subject to individual ownership. However, where an encumbrance is created, the apartment shall not be partitioned or sub-divided. Labour performed or material furnished with the consent of an apartment owner shall not be the basis for a charge or encumbrance against the apartment or property of any other apartment owner not expressly consenting, except in the case of emergency repairs. Labour and material for common areas and facilities, if duly authorized by the association of allottees, are deemed to be furnished with the express consent of each apartment owner and can be the basis for a charge or encumbrance against each apartment. If a charge affects two or more apartments, owners can remove their apartments from the charge by paying their fractional or proportional amounts.
• What happens to additional built-up area due to changes in development norms? Any benefit of additional built-up area relevant to the apartment due to change in Development Control Norms or any other reason shall be passed on to the association of allottees.
• What is the “deed of transfer of apartment” and when must it be executed? A “deed of transfer of apartment” is a prescribed legal document executed by the promoter or transferor. The promoter shall execute this deed in the name of the allottee or transferee, along with undivided proportionate title in the common areas to the association of allottees, within three months from the date of issue of Occupancy Certificate, and it must be registered under the Registration Act, 1908. No deed of transfer of apartment in favor of allottees shall be executed before the registration of the association of allottees as per Section 15.
• What documents must a promoter attach when registering the deed of transfer? While registering the deed of transfer, the promoter shall attach the following documents:
◦ Occupancy Certificate.
◦ Odisha RERA registration certificate, wherever applicable.
◦ Registration of apartment owners or allottees association certificate, if any.
◦ Registered declaration and amendment thereto, if any.
◦ Such other documents as may be prescribed.
• When does the promoter need to execute a separate deed of transfer for common areas for projects completed before this Act but after RERA? If an allotment, sale, or transfer of any apartment was made by the promoter in a project completed before the commencement of this Act and after the commencement of the Real Estate (Regulation and Development) Act, 2016, but no deed of transfer for common areas and facilities has been executed, the promoter shall, within six months from the date of commencement of this Act, execute a separate deed of transfer in favor of the association of allottees.
• What is the “declaration” and when must it be submitted? A “declaration” is a document submitted by the promoter to the Competent Authority. It must be submitted within 30 days of the issue of the Occupancy Certificate for buildings constructed before or after the Act’s commencement. If apartments were handed over before the Act’s commencement and the promoter cannot submit the declaration, the Competent Authority may allow the association of allottees to submit it after giving the promoter and association an opportunity for a hearing.
• What particulars must the declaration contain? The declaration must contain the following particulars:
◦ Details of the land, including right, title, interest, encumbrances, and whether it’s freehold or leasehold.
◦ Approved plan of the project from the competent authority.
◦ Description of the building (storeys, basements, number of apartments, principal materials).
◦ Apartment number, location, carpet area, number of rooms, bathrooms, balconies, sit-outs, immediate common area access, and other identification data.
◦ Description of common areas and facilities, including lifts.
◦ Value of each apartment, and the undivided interest in common areas and facilities appertaining to each apartment and its owner for all purposes, including voting.
◦ A statement that the apartment and undivided interest are unencumbered on the declaration date.
◦ Statement of the purposes for which the building and each apartment are intended and restricted as to use.
◦ Name and details of the person to receive service of process.
◦ Any other prescribed particulars.
◦ Copy of the registration certificate of the Association of Allottees or apartment owners, if any.
◦ A copy of registration of the Project by ORERA, if any.
◦ A copy of the Occupancy Certificate.
• What are the key responsibilities of a promoter under this Act? Every promoter has the responsibility to:
◦ Handover all original project-related documents (title documents, lease certificates, approved plans, as-is built plans, statutory compliance certificates, insurance, encumbrance documents, wiring/plumbing layouts, equipment purchase documents, annual maintenance charge documents, etc.) to the association of allottees within thirty days of issue of Occupancy Certificate. The association must acknowledge receipt, and a copy of the acknowledgment must be furnished to the Competent Authority.
◦ Transfer all unpaid amounts collected from allottees, security deposits, corpus fund, and advances (with interest) to the association of allottees within thirty days of issue of Occupancy Certificate.
◦ Furnish any other prescribed information and documents.
◦ Rectify any structural defect or other defect in workmanship, quality, or services without further charge, within a period of five years from handing over possession to the allottee.
◦ Maintain the common area and facilities till the association of allottees is formed and is entitled to levy proportionate maintenance charge as specified in the declaration.
• What are the responsibilities of an apartment owner? Every apartment owner has the responsibility to:
◦ Abide by the bye-laws of the association of allottees.
◦ Use common areas and facilities for their intended purposes without hindering other owners’ rights.
◦ Not use service areas and basements for anything other than earmarked parking spaces or uses permitted by law, as these are for maintenance services by the association.
◦ Maintain the apartment at their own cost, in good repair and condition, and not do anything in or to the building, apartment, or common areas that violates laws or rules.
◦ Not change, alter, or make additions to the apartment.
◦ Keep walls, partitions, sewers, drains, pipes, and appurtenances in good condition and repair, ensuring the building’s support and shelter are not damaged.
◦ Not put any sign-board, name-plate, publicity, or advertisement material on the building’s face, facade, or exterior.
◦ Not change the outer wall color scheme or exterior window painting, or carry out any change in exterior elevation or design without written approval from the association of allottees.
◦ Not store hazardous or combustible goods in the apartment or place heavy material in common passages or staircases.
◦ Not remove the outer wall and load-bearing wall of the apartment.
◦ Plan and distribute electrical load in conformity with the electrical systems installed by the promoter or association.
◦ Not do any work prejudicial to the property’s soundness or safety, or which reduces its value or impairs any easement or hereditament.
◦ Not add any material structure or excavate any additional basement or cellar.
◦ Not cause any loss or damages arising from breach of these conditions.
◦ An apartment owner is also responsible for any act of omission or commission by their employees, tenants, or tenant’s employees.
◦ Cannot exempt themselves from common expenses liability by waiving use or enjoyment of common areas or abandoning their apartment.
• Who is liable for unpaid common expenses when an apartment is sold? Upon the sale of an apartment, the purchaser of the apartment shall be held liable for all unpaid common expenses.
Association of Allottees
• When and how is an “association of allottees” formed? An association of allottees shall be formed when either 50% of allottees or 7 allottees, whichever is lower, have been allotted with the apartments in a project. It is the joint responsibility of the promoter and allottees to form this association. The promoter must enable the submission of the application for registration of the association to the Competent Authority. The application for formation must be submitted within six months from the date of commencement of this Act. The Competent Authority, after satisfying itself that the proposed association and its bye-laws align with the Act and RERA Act, shall register the association and issue a registration certificate within 60 days.
• Can there be multiple associations of allottees in a project? Generally, there shall be a single association of allottees in the project. However, if the project has mixed occupancy (e.g., residential apartments, commercial units, EWS units), separate associations of allottees may be formed. In such cases, the promoter shall clearly delineate the separate common areas and facilities for each such association. Additionally, where two or more projects were developed by promoters before the commencement of RERA 2016 with common areas and facilities common to all such projects, and it’s not possible to separately delineate them, one association of allottees shall be formed for all such projects, and the promoter may execute a deed of transfer for common areas in favor of this single association.
• What is the legal status of an association of allottees? An association of allottees formed and registered under this Act shall be a body corporate by the name under which it is registered, having perpetual succession and a common seal. It shall discharge its powers and duties and perform functions according to the Act, rules, and bye-laws.
• How is voting handled for members of the association of allottees? Each allottee is considered one member of the association of allottees and shall have one voting right, irrespective of the number of apartments booked or purchased by them (including by their family or associated entities). The promoter also continues to be a member for unsold apartments and has one voting right, irrespective of the number of unsold apartments. Voting can be by secret ballot or show of hands as decided by the President.
• What is the definition of “family” for voting rights in the association of allottees? For the purpose of voting rights under sub-section (6) of Section 14, the expression “family” in relation to a person, shall mean the person, husband or wife, as the case may be, of such person and their children but does not include major son and daughter (whether married or not) not wholly dependent on earning of such a person. This definition was introduced to remove difficulties where major, independent children might otherwise be considered part of the same “family” for voting purposes.
• What are the powers and duties of the association of allottees? The association of allottees shall administer the affairs of the apartment and the property appurtenant thereto, including the common areas and facilities. Its objectives include:
◦ Ensuring entitlements of all allottees under RERA and this Act.
◦ Imposing and collecting the share of common expenses from apartment owners.
◦ Providing for maintenance, repair, and replacement of common areas and facilities.
◦ Imposing restrictions on apartment use and common area use to prevent unreasonable interference.
◦ Keeping financial records and books of accounts.
◦ Retaining and renting suitable portions of common areas for commercial purposes (with member consent and Competent Authority permission) and distributing proceeds or using them to reduce charges/create reserve fund.
◦ Designating and removing persons employed for maintenance.
◦ Utilizing funds only for the association’s objectives.
◦ Carrying out socio-cultural or recreational activities for apartment owners’ benefit.
◦ Framing procedures for adopting and amending administrative rules governing operation and use of common areas and facilities.
◦ Framing regulations and issuing guidelines for day-to-day smooth management and functioning.
◦ The association or its appointed agency holds the exclusive rights and responsibilities for maintaining common areas and facilities.
• What provisions should the bye-laws of the association of allottees include? The bye-laws framed by the association of allottees shall provide for, among other matters:
◦ Manner of election of an Executive Committee, term of office, number of members, powers and duties, removal methods, delegation of powers.
◦ Manner of calling meetings of allottees and quorum.
◦ Election of a President to preside over meetings.
◦ Election of a Secretary to maintain minute books.
◦ Election of a Treasurer to keep financial records and be responsible for audit.
◦ Creation of an association of allottees Fund.
◦ Custody of records relating to land of projects, including deed of transfer in favor of the association.
◦ Maintenance, repair, and replacement of common areas and facilities and payments therefor.
◦ Manner of collecting common expenses from apartment owners.
◦ Engagement and removal of persons employed for common areas and facilities.
◦ Method of adopting and amending administrative rules and regulations governing common areas and facilities operation and use.
◦ Restrictions on use and maintenance of apartments and common areas to prevent unreasonable interference.
◦ Percentage of votes required to amend the bye-laws.
◦ Right to retain certain areas for commercial purposes, grant leases, and utilize proceeds as common expenses, with surplus distribution among owners after Competent Authority approval.
◦ Any other matter consistent with the Act relating to audit, accounts, property administration, and meetings.
• How are the bye-laws of the association amended? No modification or amendment to the bye-laws shall be valid unless it is accepted by two-thirds of the members of the association of allottees and with the approval of the Competent Authority. The Competent Authority will provide one month for suggested modifications and justifications to be displayed for objections and suggestions.
• What happens if an apartment owner fails to pay common expenses? If an apartment owner wilfully violates or threatens to violate the Act or bye-laws, including failure to pay common expenses for more than three months, the general body of the association of allottees may, after giving at least seven days’ notice, pass a resolution to cut off, withhold, or curtail any essential supply or service enjoyed by the owner. This action requires sending a certified copy of the resolution to the Competent Authority and the concerned apartment owner via registered/speed post, and displaying it conspicuously. If the default in payment of common expenses continues for one year, the arrears shall be recovered as arrears of land revenue. An aggrieved apartment owner may appeal to the Competent Authority within thirty days of receiving the resolution copy.
• How are common profits and expenses charged among apartment owners? Initially, the Act stated that common profits would be distributed and common expenses charged “equally” among apartment owners irrespective of undivided interest. However, this provision has been amended by the Odisha Apartment (Ownership and Management) Removal of Difficulties Second Order, 2024. Now, common profits shall be distributed among, and the common expenses shall be charged on, the apartment owners proportionately instead of equally. If an apartment owner is not in occupation, the liability to pay common expenses is joint and several for both the apartment owner and the person in occupation.
• What are the provisions for insurance of the property? The association of allottees shall, if required by bye-laws or a majority of owners, insure the property against fire, flood, cyclone, and other hazards. The policy is in the name of the association as trustee for each apartment owner, and the premium payable is included in the common expenses. Individual apartment owners retain the right to insure their own apartments for their benefit.
• What is the process for structural stability testing of old buildings? Upon completion of thirty years of age of the building, the Secretary of the association of allottees (or authorized office bearers) must get the structural stability tested by a certified and registered structural stability engineer.
◦ If the engineer certifies the building as safe for continued occupation, a certificate is issued.
◦ If the engineer deems it unsafe for continued occupation even after modification or repair, they must declare it unsafe and intimate the Secretary, Competent Authority, and Local Authority. If declared safe, the association must obtain a structural stability certificate every five years. An association aggrieved by an engineer’s opinion of unsafety may appeal to the Competent Authority within thirty days.
• What happens if a building is damaged or destroyed? If, within sixty days of damage or destruction of whole or part of the property, the association of allottees does not proceed to repair, reconstruct, or rebuild, then:
◦ The property is deemed to be owned in common by the apartment owners.
◦ The undivided interest in the commonly owned property for each owner will be their previously owned percentage of undivided interest in common areas and facilities.
◦ Any encumbrances affecting apartments are transferred to the undivided interest of the apartment owner in the common property.
◦ The property becomes subject to partition in a suit filed by any apartment owner, with net proceeds (including insurance) divided among owners based on their undivided interest. If damage occurs to any service or utility line within an apartment, causing concern to other owners or the association, the owner of that apartment must repair/rectify within five days for minor repairs or one month for major repairs. The Executive Committee’s decision on the magnitude of damage is final if there’s a difference of opinion. If the apartment owner fails to rectify damage within the prescribed time, the Executive Committee shall rectify it immediately, and the cost will be recovered from the owner.
Authorities and Enforcement
• Who is the “Competent Authority” and what are its powers and functions? The “Competent Authority” is an officer, not below the rank of Deputy Collector, appointed by the State Government. Its powers include:
◦ On complaint or suo motu, calling upon promoters/associations/apartment owners for information/explanation, and conducting or directing inquiries into project affairs.
◦ Entering any apartment or appurtenant property at reasonable hours without notice to check compliance with the Act or bye-laws.
◦ Issuing directions and passing orders consistent with the Act and rules.
◦ Hearing appeals preferred under Section 21(2) (structural stability engineer’s opinion).
◦ Exercising other prescribed powers. Its functions include:
◦ Registering the association of allottees along with bye-laws.
◦ Scrutinizing and maintaining a register of declarations.
◦ Approving amendments to bye-laws.
◦ Ensuring compliance by promoters and associations by issuing directions.
◦ Resolving other disputes arising under the Act, rules, and bye-laws.
◦ Performing any other prescribed functions. For its powers and functions, the Competent Authority has the same powers as a civil court under the Code of Civil Procedure, 1908, regarding summoning persons, requiring document production, and examining witnesses. Proceedings before it are deemed judicial proceedings. As of February 16, 2024, the Competent Authorities are:
◦ The Secretary of the Development Authority within their respective development areas.
◦ The Sub-Collector within the local limit of their revenue sub-division jurisdiction, except areas covered by Development Authorities.
• Who is the “Appellate Authority” and what are its powers? The “Appellate Authority” is an officer, not below the rank of Collector, appointed by the State Government. Its powers include:
◦ Hearing appeals from any person aggrieved by an order or direction issued by the Competent Authority. Appeals must be preferred within thirty days, with a fee of one hundred rupees.
◦ After hearing parties, it may pass orders confirming, modifying, or setting aside the order/direction of the Competent Authority, and its order shall be final.
◦ Appeals should be disposed of within ninety days as far as possible.
• What are the penalties for non-compliance by promoters, associations, or apartment owners?
◦ For promoters: If a promoter fails to submit the declaration, form the association of allottees, execute the deed of transfer of apartment, or hands over possession without an Occupancy Certificate, they are liable, on conviction, to a fine up to five lakh rupees, and a further fine of two thousand rupees for every day the contravention continues after conviction.
◦ For promoters (other offenses), associations, or apartment owners: If they contravene any provisions of the Act, rules, bye-laws, breach any covenant in the deed of transfer/declaration, or do anything detrimental to public health and safety, the Competent Authority may, suo motu or on application, issue a show-cause notice. If no sufficient cause is shown, a penalty up to twenty thousand rupees may be imposed for each contravention/breach, and a further sum of one thousand rupees for each day the breach/contravention continues. Such penalties can be recovered as arrears of land revenue if not paid.
• Are company officials liable for offenses committed by a company? Yes, if an offense under this Act is committed by a company, every person who, at the time of the offense, was in charge of or responsible to the company for its business conduct, as well as the company itself, shall be deemed guilty and liable to be punished. However, such a person is not liable if they prove the offense was committed without their knowledge or that they exercised due diligence to prevent it. If the offense is proven to be with the consent, connivance, or neglect of any director, manager, secretary, or other officer, such individuals are also deemed guilty and liable.
Miscellaneous Provisions
• Is each apartment considered a separate unit for tax assessment? Yes, each apartment of a property (including its percentage of undivided interest in common areas and facilities) shall be deemed to be a separate unit for the purpose of assessment of tax on land, municipal rate, and taxes. Local Authorities are required to make suitable rules for this purpose.
• Are the Act’s provisions binding on apartment owners, tenants, and other users? Yes, all promoters, apartment owners, tenants, employees of owners and tenants, or any other person who may use property or any part thereof shall be subject to the provisions of this Act and to the declaration and the bye-laws of the association of allottees. All agreements, decisions, and determinations lawfully made by the association of allottees are binding on all apartment owners.
• What is the relationship between this Act and other laws? The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or any custom, usage or agreement or decree or order of a court, tribunal or other Authority. However, the provisions of this Act shall be in addition to and not in derogation of, any other law for the time being in force, unless otherwise specified. Specifically, the provisions of the Transfer of Property Act, 1882, apply to every apartment and its undivided interest in common areas, insofar as they are not inconsistent with the provisions of this Act. The provisions of this Act take effect notwithstanding anything to the contrary in any contract.
• Has any previous Act been repealed by this Act? Yes, The Odisha Apartment Ownership Act, 1982, is hereby repealed. Additionally, The Odisha Apartment (Ownership and Management) Ordinance, 2023, is also repealed. However, anything done or action taken under the repealed Act or Ordinance, if not inconsistent with the new Act, is deemed to have been done or taken under the corresponding provisions of the new Act.