in Procedural Law Commercial Law Property Law
Asked June 29, 2021

Auditing and book keeping requirements for a residential association

  • 1 Answer

Hi, I stay in an apartment owned by my parents for past 35 years , there was a association formed under the society act 30 years ago which went non functional since past 8 years , the accounts were never audited till date by any CA firm neither it was registered each year with registrar as per the association act , a group of 3 owners out of 14 flats are acting as self proclaimed management committee and collecting the maintenance amount , no expenses or balance sheets are being shared and are creating problems if I ask questions about expense sheet. Please advice on what would be the right approach to sort this legally.

Answer 1

Residential Associations have several important duties and obligations towards the residents and what your association has been doing is not in accordance with law. First and foremost, auditing which is one of the key requirements for an association has not been done. Various Indian states' laws mention the same in their respective acts on auditing requirements and also state that a penalty must be paid when the same is not done. Also note that some states don't require auditing of an unregistered association so check that as well. The next and most important thing here is that there has been no registration in accordance with the Societies Registration Act. Therefore, their acts of collecting money while not sharing necessary details is illegal. You can thus file a case with the help of a lawyer at any competent civil court calling for clarity with regard to the association's actions as well as for registration of the association.

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