Home Buyers Associations, their benefits and registration process

There use to be a time when aggrieved home buyer did not have an option but to give in to builder’s illegal demands. In every dispute or argument arising out of home buying process, home buyers had to suffer always. Builders have long been known to coerce, threaten individual home buyers  with consequence and cancel their allotment without any reason if they dare to raise voice.

However, tables have started turning in the recent past. With the increasing use of social media among home buyers, they have easily started forming informal groups. Home Buyers are increasingly engaging builder on various issues related to projects. Builders also find it difficult to silence individuals when confronted as groups.  Although social media and informal groups are good for raising collective voice, buyers should look forward to registering their associations. We will try to explain registered association’s benefits and registration steps.

Why register home buyers associations

While social media groups and informal groups by home buyers are good for raising collective voice against builders, home buyers should get their group registered to form a registered, collective and legal body. Some of the benefits of registering the home buyer association are:

  • Representation at Consumer Forums: Home buyers associations can file cases on behalf of its members at various forums including Consumer forums.  Cumulative value of cases when filed by association can easily exceed one crore and case can directly be filed in NCDRC. In a recent landmark judgement of Lotus Panache Welfare Association vs 3C Company, NCDRC cleared the deck for home buyers associations to file cases for delay penalty etc. You can read more about it here : Maintainability of complaints by Home Buyers Associations
  • Legal Recognitions: Builders do not take homebuyer groups seriously unless their group has a legal recognition. In their view, groups are formed and dissolved every month. A legally recognized and registered association gives an impression of seriousness of people involved. A legally recognized group can present the grievances of home buyers group at various forums.
  • Credibility: When groups are registered, the office bearers are also subjected to rules and regulation of society. This gives sense of credibility and security to those wanting to join the associations.
  • Collect Money for the movement: Once the association is registered, home buyers can open a bank account in the name of association. This brings transparency in collection of funds and expenses. More people shall be interested in joining association when they have an option to deposit money online for the movement.
  • Safeguard the leaders: Not everyone has the time and energy to consistently work for the benefit of others. Builders try to target the frontrunners in the movement against injustice. A registered association can put their weight behind such leaders and extend their monetary support when needed. Actions taken by leaders in such scenarios shall be seen as the actions taken to protect members of such associations. Builder shall not have an option to single out someone and project as if those frontrunners have vested interest.
  • Avoid and fight defamation cases: We explained defamation cases being filed by builders against individuals. A registered association can always stand up against such tactics by builders and back those who are targeted by builders. Read more here : Social media activism and defamation suits

Perquisites for registering an association

A society can be framed by 7 people who are kindred for any charitable, literary or scientific impetus. A memorandum of the same is to be filled thereafter in which the name of the society, its aims, objectives, name, occupation, and addresses of the governing members of the society must be stated. This in turn should be approved by the other constituting members of the society. These are some basic requirements:

  • Seven persons with residential address of Delhi.
  • One person with permanent address (Electricity bill etc) of Delhi.
  • If your work area is Delhi/NCR, it is advised to register this association in Delhi. This gives you benefits of being geographically close to registrar office in Delhi.

Steps to register Home Buyers Associations

Society / Association registration is a simple process and usually takes around 30 days once documents are filed. Although individuals can file register the association own their own, it is advised to take help of the a layer/chartered accountant to expedite the process. Any professional working in this field shall charge a sum of around 10-15 thousand rupees for the entire process.

In case homebuyers have time, they can register the association themselves too. Self registration cost a maximum of 500 rupees but one shall have to do rounds of government offices.

Documents required for registration:

  1. Request letter to register a society under Societies Registration Act 1860
  2. Two sets of Memorandum of association including list of proposed Governing Body and list of desirous persons
  3. Two sets of Rules and regulations framed for the functioning of the organisation.
  4. Affidavits (on Rs.2/- stamp paper from president/Secretary of the Society regarding the name/title of the society.
  5. Copy of residence proof of all desirous persons.
  6. Proof of ownership of the registered office of the society and no objection certificate(on rs.2/- stamp paper).

Contact Address: Registrar of Societies, Office of the Registrar of Societies , Office of the Commissioner of Industries, Govt.of NCT of Delhi , C.P.O Building , Kashmere Gate, Delhi, Phone Nos. 22960173
Visiting Hours: 10.30A.M to 1.00 P.M

Attached is the registration guide by Delhi Government Registration of Societies in Delhi . Have a glance at following handy tips when registering the association Things to remember while registering a Society in Delhi . Society registration act : Societies Registration Act 1860.

Sample memorandum of one of the society : Lotus Panache Welfare Association Rulebook

Few tips for Home Buyers and Registered Home Buyers Associations

To ensure that more and more home buyers join hands in their fight against wrongdoing of builder, home buyers and the association must keep the following things in mind:

  • Try not to create too many groups and ensure that home buyers put up a united fronts. If there are more than one group, builder shall resort to divide and rule strategy.
  • Don’t go for copy paste memorandum and rules of associations. Draft good rules that ensures office bearers can not misuse their positions.
  • Have atleast two signing authorities for bank and accounts.
  • Be transparent with your members and stop taking decision behind closed doors. Involve all stakeholders when making important decisions.

We shall do a separate story on how to run a strong association and put up a united front. Home buyers should learn from the example of Lotus Panache Welfare Association and understand how an association of 450+ members have been able to put up a strong united front. The Logical Buyer soon reveal how LPWA have been able to keep everyone together and their fight against builder’s injustice.

Note: This is not a RWA. We shall cover the steps to register RWA separately. Home buyers should not push for RWA until builder have delivered the project completely and have everything in place.

6 thoughts on “Home Buyers Associations, their benefits and registration process

  • September 8, 2015 at 12:30 pm

    Kindly tell us the legal position of Builder charging us Maintenance fees, when not even half of the society is completed, Infrastructure is not there- fire equipment/ DG sets/ Basement parking/ common areas not completed/ perimeter wall not complete/ only one lift for 100+ flats in a tower/ No clarity on Super area as indicated on FBA.

    Can builder threaten residents of cutting off water/ electricity for not paying Maintenance? They collected Maintennance deposit and IFMS at time of giving possession, which itself is illegal since they do not have OC/CC from Noida Authority. They threatened buyers to either py final instalment and take possession or else they will charge additional penalty @18%pa.

    They have not paid delayed penalty @ Rs10psf, on pretext of NGT ban.

  • September 8, 2015 at 12:46 pm

    Dear Neeraj,

    Although some of the things are subjective, however, you can definitely oppose such charges. First you should write a letter to Authority and than through association move to consumer court for these high charges.

    We advise you do not stop the maintenance charges but take the matter to consumer forums and ask for stay on charges unless facilities are in place.

    All of the above mentioned issues, if generic in nature, can be taken up through association (need not be RWA).

  • December 19, 2015 at 8:47 am

    can u provide the some model of rules and regulation

  • January 23, 2021 at 5:29 pm

    1. I have purchased the flat in October 2016 with covered parking. At that time RERA date was 31 Dec 2019 and the sales person told me that they will give the possession by Feb 2019 as they have a very good track record of delivering projects prior to RERA date. I have availed their “interest free scheme” with around Rs.1500000 down payment and rest of the amount devided in 108 month EMI’s with 3 bullet payments each of Rs.275000.
    2. I have been paying my EMI’s regularly with no delays. In Oct 2019 they have started forcing me for ding the registration as they were about to give the possession in Jan 2020 but as per position of the building I was sure that they can’t give the possession. I didn’t had the money for thet registration and maintenance amount so I requested them that I’ll do the registration in March 2020 and take the possession as some of my stuck money will get released in march 2020 and I can do the registration at that time. At last I have to take Rs.3000000 home loan(30 year tenure) to do the registration. Possession date in my registered agreement is 31 Dec 2019. (Note** Builder has paid for the registration and done some changes in balance sheet to include the registration amount and maintenance amount in home loan so that they can get a big amount at a shot from bank)
    3. Meanwhile they changed the RERA possession date from Dec 2019 to Dec 2020 and they never informend us by any means about this RERA possession date change. And then COVID came in picture. I was asking them again n again for possession of my flat but they were saying that OC is pending. I have to suffer and give rent for more that a year as I was living in a rented apartment.
    4. I had bought covered parking and at that time they never said anything about hydraulic parking but they had started placing hydraulic parking which will cost us quite alot in terms of maintenance and it is a headach and dangerous to use hydraulic parking. I have told them I don’t want this and they have never informed us about this and they have installed hydraulic parking without my knowledge but they said they are saying they have promised for covered parking and they are giving it and they won’t change the plan of installing it. They were always behaving like goons.
    5. When I went for the final anount payment in november 2020 they have given me a paper of pending amounts. In that document they have mentioned quite a lot of things and charged me interest for late payments which I never did and amount towards few other things. As per my calculations I only had to pay them maintenance money and last disbursement of pending home loan but they were not ready. I told them to show me the proofs so they took around 15 days and telling me to pay the balance amount. At last they didn’t find any proofs and I had paid the amount as per my calculations.
    6. They have told me that they will give me the possession on 25th Dec 2020 and later told me that they will give the possession on 29th Dec 2020 but they didn’t gave me the possession. I have demanded them the rent for Jan 2021 as delay was from their side and I have to pay the rent because of their mistake but they said they won’t give me the compansation. Still I am waiting for the possession and I am not satisfied with the quality of work they have done in the building and flat.
    7. They are still using the amenities of the building (water, lift, security staff, cleaning staff, etc) and as per them the cost and salary are being paid by our maintenance money. They are giving us nothing in terms of maintenance. They are still not leaving our club house, no swiming pool, no basket ball court, no childrens play area, parking not alloted, etc.
    8. PMC water line is not yet functional and they are using our maintenance money for water tanker and using it for them selves along with us.
    9. MSEB connection is not yet came in the society so they are taking Rs.10000(Rs.1500 for meter and Rs.8500 for deposite) for temporary solution and giving us connection from contractors electricity connection and they said they are not sure about the per unit charge of electricity and it may vary from Rs.6 to Rs.15. I suspect that they will charge Rs.15 per unit. I have told them that I am ready to pay residential charges but they did not listen to me. I asked them about what will happen to current meter when MSEB connection will come, they said to keep the meter with ourself. They are not sure about when will MSEB connection will come to the society. Most of the time their is no power supply and they have not yet installed DG backup(as per them DG has some issue and it will take time to resolve) so I have to go by stairs to 14th floor which is frustrating. Average 6-7 times out of 10 times I have to use stairs. Because of power issue my interior work is getting delayed.
    Builder is not completing their pending work of my flat.
    10. On 13th Jan 2021 when I went to take key of my flat as some interior work is going on in my flat, builder has denied the permission and asked to give a written letter to provide the key. I have written the letter and asked for the acknowledgment but they denied for the acknowledgement letter too. Then I have mailed them an email regarding reason of not providing the key of my flat. Waiting for acknowledgment.
    11. I have updated a review towards builder in google platform and Now builder has sent me a defamation notice of 10 crore. Need support and suggestion

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