Tamil Nadu Apartment Ownership Act: Chennai skyline set for an overhaul

Tamil Nadu Apartment Ownership Act

An old apartment refreshed can solve a multitude of problems. Drabness should give way to colour. Latest construction technologies being on tap, the quality and utility of the structure should improve exponentially. Spaces that seemed constricted might now appear expansive.

The redevelopment of 30-year-old buildings in Tamil Nadu that had been stalled due to resistance from a small group of residents has now received a major boost. The housing and urban development department introduced new rules on September 24, which strengthen the Tamil Nadu Apartment Ownership Act .

The Tamil Nadu Apartment Ownership Act 2022 took effect on March 6, 2024, but builders and apartment associations are still waiting for greater light to be shed on how it would impact ground realities, particularly redevelopment of apartments.

The overhaul of the law relating to apartment ownership in Tamil Nadu - JSA

The Housing and Urban Development Department is yet to spell out the specific rules/ guidelines under the Act.

According to the newly introduced rules, apartment owners are required to establish an association, create by-laws, and register the association. A minimum of four apartment owners is necessary to form the association. This move aims to ensure better coordination and decision-making among the apartment owners for the redevelopment process.

Each association will have a board of managers, responsible for overseeing the redevelopment project. In cases where multiple towers exist on a property, the associations can form a federation. The president and treasurer of each association will serve as members of the federation, ensuring effective communication and collaboration between the different associations.

A housing and urban development official emphasized that a resolution is essential for initiating the redevelopment process. The board of managers must convene a special general meeting either on its own initiative or upon request from one-fourth of the apartment owners.

Once the resolution has been passed, the association, with the written consent of at least two-thirds of the apartment owners in the project, is required to notify the chief planner of the Chennai Metropolitan Development Authority or thelocal planning authority about the decision to redevelop the project. This ensures a transparent and accountable redevelopment process.

To safeguard the interests of all apartment owners, the rules also address the issue of obtaining consent for redevelopment. If any apartment owner is dissatisfied with how consent was obtained, they have the right to file an objection with the relevant authority within 30 days. The authority will then review the objection and issue necessary directions to the association if any issues with the consent process are found.

However, if the appropriate authority certifies that the building is in a dilapidated condition or poses a danger to the occupants or others, the association must convene a meeting to pass a resolution. This resolution will involve engaging a promoter or consultant to prepare a detailed redevelopment report, which will then be submitted to the association for approval.

By encouraging association formation, the rules enable apartment owners to collaborate and work towards transforming their aging buildings. With proper decision-making procedures and the option to seek professional help in the redevelopment process, these initiatives create a favorable environment for smooth and efficient redevelopment projects.

This development reflects the government’s proactive approach towards infrastructure and urban development in Tamil Nadu, fostering growth and modernization in residential communities. It is a significant step towards revitalizing outdated buildings, ensuring the safety and well-being of occupants, and creating a more vibrant and sustainable living environment for all.

How to get buy-in from owners: case studies from two apartment associations

At this 20-unit apartment at Vannandurai in Besant Nagar, five owners initiated the process of getting buy-in from the other owners for a redevelopment plan.

One of the five, Tharak K. says every owner’s inputs were taken into account and the committee ensured everybody signed on the joint venture worked out with Rams Builders.

Though only two decades old, that apartment had developed cracks, was lower than the road level, and its electricity wiring system and sewage system had to be overhauled.

Before the demolition began in April 2023, the owners had considerable homework to do.

An expert was called to inspect the building for stability.

“Right from the initial days, we had engaged a lawyer who had experience in joint ventures and helped us through the process which includes drafting the legal provisions and spelling out the rental agreement that each of the owners is paid till the project is completed,” says Tharak, adding that the entire process took them less than two years.

Another criteria the owners were particular about was that the Real Estate Regulatory Authority (RERA) rules were followed. “We waited for approval from RERA before demolition work began. To be doubly sure, we would check on the RERA website to see if the project details were updated,” says Tharak.

The actual JV agreement went through multiple rounds of discussion and negotiation, he says, adding that the RERA format given on its website came in handy.

“I have not received the keys to my house, which is expected to be ready by the end of this quarter. We are however happy with the progress. The director of the company being approachable is a matter of great reassurance for the owners,” says Tharak.

Financial stability

When two groups had opposing views about the choice of the entity to entrust the redevelopment project with, residents decided to work on it separately.

“This was possible as it was two independent blocks of 18 flats each developed by the Tamil Nadu Housing Development in Anna Nagar more than 30 years ago,” says S. Muthusami, who is happy that his new home has additional rooms.

He says apart from doing the homework about the developer, studying the financial stability of the venture is necessary.

While work on one of the blocks took three years to be completed, the other took 10 years.

A part of Egmore with the Cooum in the foreground. (Representational picture only)

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Among what is clear is that the Act permits redevelopment of apartments that are structurally weak and more than 30 years old, based on consent of two-thirds of owners. Until the Act arrived, concurrence of all the owners was a prerequisite for redevelopment.

“Confederation of Real Estate Developers’ Associations of India (CREDAI) members have been part of various stakeholder meetings organised by the Housing Secretary. We have given our suggestions,” says S. Sridharan, vice-president south, CREDAI National.

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Tamil Nadu Apartment Ownership Act: Chennai skyline set for an overhaul