Legality of Amenity User Charges in Housing Societies

You might live in a housing society, RWAs where the society charges a separate user charge for using the amenities like swimming pool, gym, etc. If this happens then note that it is not illegal to charge a separate amenity fee for using the pool, hym etc but only if certain legal conditions are followed. This article is specifically about this aspect and how to know if the user charges levied by a RWA or housing society is bad in law or not.

According to the law, an Apartment Owners Association, RWA, or a housing society can levy separate charges for use of facilities like gyms, swimming pools or clubhouses, as long as these charges are backed by the Deed of Declaration, bye-laws or properly adopted rules of the Association.

Lakshmi Baradwaj H S, Partner at Apex Law Chambers, told ET Wealth Online that such charges must be imposed uniformly, transparently and on a non-discriminatory basis, and should ordinarily relate to additional operational or service-related costs associated with the facility.

Baradwaj says: "However, the Apartment Owners Association cannot impose arbitrary, retrospective or discriminatory charges that effectively deny equal access to common amenities."

Dhruv Uthappa, Partner at Contriance Legal Solutions, echoes similar views and says that even though separate user charges are permissible, they must be authorised by the bye-laws or resolutions of the association, applied uniformly, and are reasonable in nature.

Uthappa says that the legal concern about user charges generally arises only where such charges become exclusionary in effect or are imposed arbitrarily in a manner that effectively denies access to certain amenities.

What role does Deed of Declaration play in determining amenity rights?

According to Baradwaj, the Deed of Declaration is the foundational document governing the rights, obligations and interests of apartment owners under the Karnataka Apartment Ownership Act, 1972. It defines the common areas and facilities, the undivided interest of each owner, and the nature and extent of usage rights available to apartment owners.

Any resolution, rule or decision of the Association that is inconsistent with or contrary to the Deed of Declaration would be beyond its authority and legally unenforceable.

Baradwaj says: "Accordingly, the rights relating to access and use of amenities must be determined primarily in accordance with the Deed of Declaration."

If amenities were marketed to all buyers by the builders at the time of purchase, can access later be restricted by the apartment owners association?

Baradwaj says that if amenities such as swimming pools, clubhouses, gyms, or parks were represented and marketed by the developer as facilities available to all purchasers at the time of sale, apartment owners acquire a legitimate and enforceable right to access and enjoy these amenities.

Restricting access subsequently may amount to an arbitrary deprivation of vested rights and could attract principles of promissory estoppel and deficiency in services under applicable law.

Baradwaj says: "Accordingly, an Apartment Owners Association cannot unilaterally curtail or deny access to such promised common amenities in a manner contrary to the representations made at the time of purchase and the governing documents of the apartment complex."

Uthappa says: "Apartment Associations may legitimately structure maintenance contributions differently or levy reasonable user charges for specific facilities. However, selective denial of access to common amenities purely on the basis of apartment size raises significant legal concerns."