Housing Society Rules

Top 10 Differences between Co-operative Housing Societies and Apartment Associations

The following article can give you a fair idea about the differences between cooperative housing societies and apartment associations but do consult an experienced property lawyer to guide you through the entire process to form such a body.

Some of the 10 major differences between co-operative housing societies and apartment associations in West Bengal are enumerated below:

  1. The West Bengal Co-operative Society Act 2006 applies to all co-operative housing societies and also other co-operative societies in West Bengal. A minimum 8 members are required for housing co-operatives. On the other hand, the West Bengal Apartment Ownership Act 1972 applies only to apartments where management is shared among all members of the association. Minimum 51% or less can apply. This is a major difference between cooperative housing societies and apartment associations in West Bengal. However, such laws are also subject to changes from time to time.
  2. In housing co-operatives, the title of the land and the building is transferred and conveyed to Society, which becomes the owner thereof. Ownership of a unit in a Housing Society is vested in the society, and not in individual members. Members hold shares in the Society, which entitles them to the use of the unit, and they can register individual deeds as assignees under the Society. On the other hand, in Apartment Association, the deed of the apartment is a document that sets out the ownership structure of the apartment, including details such as the super built-up area of the apartment, the undivided interest in the common areas, and the rights and obligations of the owner of the apartment. This grants absolute ownership of the unit by the apartment owner as the title of each Apartment rests with the Apartment owner, who also has a proportionate undivided interest in the land on which the building stands along with the common areas and facilities of the building. To help with such complexities, an experienced property lawyer is recommended for formation of a housing co-operative society or apartment association in West Bengal.
  3. Thirdly, under the West Bengal Co-operative Society Act, the management of the co-operative housing society is done by a governing body, consisting of elected members of the society. The governing body is responsible for the administration, management, maintenance, and repair of the Society’s property and affairs. However, under the West Bengal Apartment Ownership Act, the management of the apartment complex is to be done by the apartment owners or the association of apartment owners. The association of apartment owners is responsible for the administration, maintenance, repair, and replacement of common areas and facilities, including lifts, water supply systems, and electrical systems. The yearly compliance needs of a Housing Society are much more complex compared to an Apartment Association.
  4. Another difference is that a Housing Society issues Share Certificates to its members as per the Bye-laws and the Share Certificate becomes an important part of the title in the property since the allotment of the premises is related thereto, whereas no such Share Certificates are required in an Apartment Association.
  5. Another important point is that while renting out property in a Housing Society, permission and a certain tenancy fee have to be paid to the Society, but no such permission or fee is required in an Apartment Association.
  6. In a Housing Society, members can be expelled for failure to pay maintenance fees or for other acts, but no such provision under the Apartment Association, and only penalties can be levied.
  7. In a Housing Society, members can nominate a person in whose favor shares of the Housing Society should be transferred upon the member’s death, but no such provision under Apartment Association.
  8. In a Housing Society, every member has a single vote but in an Apartment Association, members have a proportionate share as per his or her apartment area of occupation. 
  9. In a Housing Society, the entire property including open spaces has to be transferred to the Society but in an Apartment Association, builders or developers may retain certain open spaces or areas which are not included in the saleable area. In a Housing Society, if any additional floor or FSI in the future then the Society owns the same, and the builder cannot claim anything, but in an Apartment Association builder can claim or reserve the excess FSI. For example, terraces or open car parking areas may be retained by the builder or developer.
  10. Lastly, the dispute resolution mechanism is different. Under the West Bengal Apartment Ownership Act, any dispute between the apartment owners or between an apartment owner and the association of apartment owners is resolved by the civil court or the competent authority. Whereas, in Housing Societies, any dispute between the co-operative society and its members or any member and another member is resolved through the Registrar or the Joint Registrar, barring the jurisdiction of civil courts completely.

Lastly, it is recommended to consult an experienced property lawyer in West Bengal who can guide you through the process of forming an apartment association or a co-operative housing society in West Bengal. You may consult us for the formation of co-operative housing societies or apartment associations, here.

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