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Law analysis
Legal
issues regarding apartment ownership in Bangladesh
Saidunnabi
Piyal
Apartment
ownership means ownership of the physical share of a structure
together with a legal share of common ownership to which
the physical share belongs and the physical share of a
structure and the legal share of a common ownership, which
are objects of apartment ownership, cannot be separately
transferred, encumbered or bequeathed. In Bangladesh over
the last few years, several real estate businesses have
been set up to cater for the ever-increasing housing needs;
because there is certainly a rising demand in the housing
sector and there is a buyer for every type of apartment
as well. Besides, the middle-income group is growing and
will continue to grow and there is also a demand for low
cost housing complexes. Recently, the President of the
World Bank Group, Mr. James D. Wolfensohn, signed for
the International Finance Corporation (IFC) to become
an equity partner together with the Housing De~elopment
Financm Corporation (HDFC) of India, in the recently established
Delta Brac Housing Finance Company (DBH) in Bangladesh.
It will provide a home mortgage loan of up to fifteen
years for owner occupied houses and apartments and plans
to launch a deposit scheme shortly, particularly for the
future prospective homeowners.
As
the urban population of Bangladesh, especially its capital
city, Dhaka, has experienced explosive growth for over
two decades with consequent overcrowding and an acute
shortage of housing, housing and the attendant urban infrastructure
is required to support adequate living conditions. As
a result, a special statute relating to apartment ownership
becomes urgent not only to get a guide to the successful
ownership and management, choosing between self and third-party
management, rent regulations and landlord/tenant relations,
insurance, taxes and assessments and building maintenance
and repair, but also to improve maintenance and healthy
conditions in the apartment for the economically disadvantaged
urban population in Bangladesh.
On
the other hand, as the complexity of the real estate business
intensifies, the need for the special statute of the apartment
ownership becomes increasingly urgent. Under the circumstances
as stated above, for example, the 'Delhi Apartment Ownership
Act' is a welcome piece of legislation. There was a growing
need for it arising out of the increasing number of apartments
coming up in Delhi and the resultant litigation. The Act
sets at rest many issues relating to the rights and obligations
of apartment owners, such as the question of inheritance
and ownership, the right to common areas and facilities,
the restrictions on transfer like sale, mortgage, etc.
Reasons
nor introducing Apartment Ownership:
*It aims to alleviate the urgent sociological need for
residential accommodation in Bangladesh by providing a
third possibility to satisfy housing needs besides the
traditional options of purchasing a house or renting a
flat.
*It provides a hedge against inflation: instead of paying
rent, apartment owners use their financial resources for
the payment of i mortgage, which increases their financial
interest in the apartment.
*It satisfies the psychological need of the population
of Bangladesh for home ownership and to spread the social
status associated with home ownership to a larger segment
of the population.
*By linking as large a percentage of the population of
Bangladesh as possible to a fixed place of residence it
is hoped to achieve political stability in Bangladesh.
*Finally, it results in a more efficient construction
of building and a better utilization of land in Bangladesh.
Reasons why apartment ownership should have a statutory
basis in Bangladesh:
Bangladesh is a civil law country. In civil law countries
it was necessary to provide a statutory basis for thm
apartment ownership in order to breach |he aoe-old maxim
supernicies solo cedit, which did not allow separate ownership
of parts of a building. So, in order to flourish, an enabling
statute, which provides for the apartment ownership concept
must ensure that apartment ownership is recognized as
an important interest in real property and that apartment
mortgages qualify for institutional investment.
From the above discussion, it is crystal clear that a
special statute in relation to the apartment ownership
becomes urgent for the people of Bangladesh considering
the following aspect:
*To provide a procedure for the establishment and dissolution
of apartment ownership and to secure a uniform pattern
of legal documentation.
*To accommodate existing legal rules and legislation dealing
with recording procedures, land-use control, servitudes
and securi|y regulation to the special neels of Apartment
Ownership.
*To anticipate possible judicial antagonism involving
such matters as limitations on partition and real covenants.
As far as the ownership, management and maintenance are
concerned, a special statute in relation to apartment
ownership is urgent in Bangladesh. Basically a statute
in relation to |he apartment ownership should dmal with
the following matters:
*Physical share of object of apartment ownership: What
is it?
*Ownership: Who owns what?
*Maintenance: Who pays for what?
*Managemen|: How are decisions to be made?
The physical share of an object of apartment ownership
is a delimited dwelling or non-residential premises and
par|s of the structure thereto, which enable separate
use and which can be altezed, removed or added without
violating common ownership or rights of other apartment
owners and without altering the external form of the structure.
A part of a garage with an apartment marking may also
be part of a physical share of an object of apartment
ownership. Structure or parts thereof, or equipment necessary
for the life of a structure, for ensuring safety or for
common use by the apartment owners are not physical shares
of an object of apartment ownership even if they are situated
within the boundaries of a physical share of the object
of apartment ownership.
In
Bangladesh the Transfer of Property Act and Registration
Act deal ownership in a manner, which is broadly satisfactory;
but regarding apartment ownership it requires clarification
and improvement because the approach of the apartment
ownership must be accessible and clear to resolve uncertainties
for the anticipation of future development.
For
as lono as ownership is tied to maintenance, it is often
resorted to in titles. Although the maintenance of the
apartment is regulated on the concept of common interest
and by the deed of sale, as there is no law in relation
to the apartment ownership, there arises various disputes,
e.g. who maintains the roof of the apartment to the extant
required to provide shelter? Or who maintains the external
walls and any other parts thereof of |he apartment to
the extent required to providino shelter?
As
there is no law on the apartment ownership, there is no
particular scheme for management and decision making in
Bangladesh. If the roof is leaking, it must be repaired
by those responsible for its repair- an obligation enforceable,
if need be, by court action. And if the walls are failing,
they too must be repaired. But repair i.e. confined to
these particular cases, and can be demanded only where
maters have deterioratmd to the point where support or
shelter is at risk. As there is no law on the apartment
ownership in Bangladesh, maintenance and management mainly
depend on voluntary act or unanimous agreemmnt, which
usually gives and raise various disputes in the country.
The
author is currently doing his PhD from School of Law,
University of Aberdeen, Scotland.
