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.

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

  • September 8, 2015 at 12:30 pm
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    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
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    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
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    can u provide the some model of rules and regulation

  • January 28, 2018 at 5:52 pm
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    Dear Sir,
    We are buyers want to setup Home Buyers Association. Our flats are under construction, possession not yet done, location of project is in Noida extension west. It is possible that we can setup HBA before possession? Also please suggest how we can process and will be cost.

    There also confusion about HBA registration office, it should be in Delhi or Meerut (Uttar Pradesh)

    Your suggestions would be greatly appreciated.

  • January 31, 2018 at 7:51 pm
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    Hello,

    The association to be set up for under construction apartments is not an AOA (Association of Apartment Owners) as per Apartment Act in UP.

    You have to register the association under society reg act. You can register it in Delhi as well.

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