Rights of Tenants in elections of Apartment Owners Associations?

The above question is asked many a time during elections of apartment owners associations in group housing societies in Noida and Ghaziabad.

As per the Model Bye-laws under the U.P. Apartment Act, only apartment owners can be members of the association of apartment owners.

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Who is an apartment owner?

As per the definition given in the U.P. Apartment Act under section 2 (d),  “apartment owner” means the person or persons owning an apartment or the promoter or his nominee in case of unsold apartments and an undivided interest in the common areas and facilities appurtenant to such apartment in the percentage specified in the Deed of Apartment and includes the lessee of the land on which the building containing such apartment has been constructed, where the lease of such land is for a period of thirty years or more;

The same act also defines AOA under section 2 (e) where “association of apartment owners” means all the owners of the apartments therein, acting as a group in accordance with the byelaws;

The Hon’ble Allahabad High Court in the Designarch case has elaborated the definition of an apartment owner in the following terms:

“The apartment owner under Section 3 (d) will not only the person or persons owning an apartment or the promoter or his nominee in case of unsold apartments with an undivided interest in the common areas and facilities appurtenant to such apartment in the percentage specified in the Deed of Apartment and includes the lessee of the land on which the building containing such apartment has been constructed, where the lease of such land is for a period of thirty years or more; it includes the spouse and children of the apartment owner and a lawful tenant of the allottee/ owner of the apartment, which will also include officer or employee of the company/ firm or association, which owns an apartment under a valid allotment letter and its tenant. It will also include a person holding valid power of attorney of the allottee/ owner of the apartment, where it is owned individually, jointly or in the case of a company/ firm/ society and occupied without any right of occupation either as family member, tenant, employee or person holding power of attorney will not be included in the definition of apartment owner.”

M/s. Designarch Infrastructure Pvt. Ltd. and Another vs. Vice Chairman, Ghaziabad Development Authority and Others (14.11.2013 – ALLHC) : MANU/UP/1765/2013

As per the above definition given by the Hon’ble High Court a lawful tenant of the allottee/ owner of the apartment will be treated an apartment owner. Such an interpretation has been given by the Hon’ble Court apparently with an objective to increase the participation of persons actually living in the concerned group housing and getting affected by the decisions of the AOA. The law does not want a person not living the society to determine the interest of the person living in society and paying for the common areas and facilities. Once the owner is transferring the enjoyment rights of the property to the tenant, he is also transferring the rights w.r.t. participating in the elections. It is also seen that owners residing in the group housing societies try to shield the management rights from the tenants irrespective of the length of their stay in societies. Such treatments should be avoided and the AOA should make clear election rules allowing the tenants to participate in elections and have their say in the management of the society. Overall, tenants form a good number out of total residents.

Since a lawful tenant is considered as an apartment owner thus, it is obvious that he is member of the AOA and can vote and put his candidature in the election for serving the AOA as an office-bearer of the Board of Management. So the next question that would arise would be:

Who a lawful tenant is?

A “tenant”, in relation to a building, means a person by whom its rent is payable to the person who owns it[1] i.e. to the landlord/ apartment owner. The critical aspect here is the possession of the property/ apartment as well as payment of rent/ consideration by the tenant to the landlord. According to this definition, a person living without paying rent, like a relative of the apartment owner, cannot be termed as a tenant.

Lawful shall mean that the tenancy is formalised through a rent/ lease deed as per the procedure prescribed in the law. A lawful tenancy will include tenancy/ lease of an apartment for a term of more than one year with proper stamp duty paid on it depending on the total rent agreed to be paid by the tenant to the landlord over the entire period of the lease. Typically, two per cent stamp duty is payable on leases of up to three years computed on the total rent payable or deliverable in the entire lease tenure. Having a lease term of three years is suggestable.

If a tenant wishes to participate in the elections of AOA as a candidate and wish to serve as an office bearer / Member of Board of AOA  then his lease deed / tenancy/ rent deed must survive the period between the annual general body meeting of AOA declaring such election till the expiry of the term of the upcoming Board. A tenant would not be required to take any additional NOC from the apartment owner/ landlord for contesting or participating in the election both as voter or candidate.  

Conclusions:

1. A tenant is considered as an apartment owner for participation in AOA related issues;
2. A tenant can participate in AOA elections both as a voter and a candidate and become part of Board, provided that:
   1. he has entered into a lawful tenancy of more than one year (i.e. for than term of Board) which should survive, without a break, the period between the declaration of AGM declaring the election and expiry of the upcoming Board of Management.
   2. Then tenancy deed must be on proper stamp paper assuring payment of legally applicable stamp duty.
3. A tenant cannot delegate his above rights to any other person. Only the person in whose name tenancy /lease deed is executed can participate in the election.

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[1] As per section 3(a) of The U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972