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Star 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 Development Finance 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 for 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 a 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 the apartment ownership in order to breach the age-old maxim superficies 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 security regulation to the special needs 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 the apartment ownership should deal with the following matters:
= Physical share of object of apartment ownership:
What is it?
= Ownership: Who owns what?
= Maintenance: Who pays for what?
= Management: How are decisions to be made?
The physical share of an object of apartment ownership is a delimited dwelling or non-residential premises and parts of the structure thereto, which enable sepa-
rate use and which can be altered, 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 long 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 the apartment to the extent required to providing 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 deteriorated 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 agreement, 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.