Chennai Real Estate Guide

The Tamil Nadu Apartment Ownership Act, 2022, regulates apartment ownership and management in Tamil Nadu. It replaces the Tamil Nadu Apartment Ownership Act, 1994, a law that had become outdated given the rapid changes in real estate development, including high-rise buildings and integrated townships.

The 2022 Act aims to bring apartment ownership regulations in line with modern needs, promoting transparency, uniformity, and efficiency.

The Tamil Nadu Apartement Ownership Rules for implementing the Act were published in September 2024, making the law fully operational.

Applicability of the Tamil Nadu Apartment Ownership Act, 2022

The Act applies to all buildings having four or more apartments. This includes new projects and existing buildings. All such buildings must comply with the Act’s provisions, including the mandatory filing of a declaration and the formation of an association under the new law.

Declaration under the Tamil Nadu Apartment Ownership Act 2022–Details Required

A central feature of the Act is the requirement to file a Declaration. This must be done by the Promoter in the case of new buildings, or by the Association representing the majority of apartment owners in the case of existing ones. The declaration provides legal clarity by defining apartment boundaries, common areas, and ownership details.

The Declaration must be filed:

• Within one year from the date of the Completion Certificate.
• If a Completion Certificate is not available, the date of TANGEDCO power connection will be used instead.
• In case of phased developments, each phase can file its declaration independently.

The declaration, filed in Form A along with the prescribed fee, must include:

• Number, size, and description of each apartment.
• Details of common areas and facilities, including those reserved for exclusive use.
• Information about the promoter or owners.
• Arrangements for maintenance and management.

The Competent Authority, which is the Registration Department, will review the declaration. If found incomplete or inconsistent with the Act, it may be rejected. Once accepted, apartment owners must proceed to form an association.

Failure to file the declaration or form an association within the prescribed time can attract penalties.

Formation of Associations and Federations under the Tamil Nadu Apartment Ownership Act 2022

The Act mandates that every apartment project must have only one Apartment Owners Association (AOA) formed under this Act. This removes the earlier confusion of having multiple associations under different laws such as the Tamil Nadu Societies Registration Act.

The Act mandates that every apartment project must have only one Apartment Owners Association (AOA) formed under this Act. This removes the earlier confusion of having multiple associations under different laws such as the Tamil Nadu Societies Registration Act.

Key requirements include:

• The Association must be formed and registered within 180 days of the declaration’s acceptance.
• Bye-laws must be prepared based on the model bye-laws provided in the Appendix and submitted along with the registration application.
• Even if a person owns more than one apartment, they are treated as a single member for voting purposes.

Once registered, the association is responsible for managing the common areas and facilities, collecting maintenance charges, and ensuring the smooth functioning of the apartment complex.

For large-scale or multi-phase developments, the Act permits the creation of a Federation. This is especially relevant for projects with multiple towers or blocks.

The Federation:

• Is formed once individual associations for each phase have filed their declarations.
• Is registered using Form B.
• Takes charge of managing collective common areas, i.e., spaces shared across multiple towers or phases.

This mechanism ensures effective governance of township-style projects and streamlines coordination across associations.

Definitions of Common Areas in the Tamil Nadu Apartment Ownership Act,2022

The Rules of 2024 offer detailed definitions to remove ambiguities around shared spaces, which were a frequent source of disputes.

• Common Areas and Facilities include internal roads, pathways, lifts, staircases, water supply systems, clubhouses, STPs, backup power, and more.
• Collective Common Areas are those extending across towers/phases, requiring joint management by respective associations.
• Limited Common Areas refer to shared spaces reserved for exclusive use by one or more units, such as private balconies or car parking slots.

This classification is crucial for determining usage rights, maintenance responsibilities, and cost-sharing.

Plinth Area or Carpet Area

A key change from the 1994 Act is the shift from “plinth area” to “carpet area” for calculating Undivided share of Land(UDS) in common areas. This aligns with RERA (Real Estate Regulation and Development Act, 2016) and ensures consistency across laws, bringing better transparency in ownership distribution.

Redevelopment of Old Apartments under the Tamil Nadu Apartment Ownership Act 2022

A long-awaited aspect of the new law is a well-defined redevelopment process for old apartment complexes. Many ageing buildings in urban areas have unused Floor Space Index (FSI) that can be utilised profitably through redevelopment.

The redevelopment rules offer a structured, legal pathway:

• At least two-thirds of the apartment owners must give written consent.
• A Special General Meeting should be held by the association, and minutes must be recorded in Form I.
• A Detailed Redevelopment Report must be prepared jointly by the association and the promoter or consultant, covering scope, financials, and timelines.
• The Redevelopment Scheme must be submitted to the competent authority for final approval and becomes legally binding once accepted.

Builder obligations are also defined, ensuring accountability during project execution. These provisions empower apartment owners to undertake redevelopment without legal hurdles, ensuring safety, better infrastructure, and enhanced property value.

Financial Management under the Tamil Nadu Apartment Ownership Act 2022

The Act lays strong emphasis on financial discipline and transparency in apartment governance.

Key financial provisions:

• All associations and federations must appoint a certified auditor for annual audits.
• Detailed records of income, expenditure, and member contributions must be maintained.
• Audited financial statements must be filed with the competent authority within six months from the end of the financial year.

Non-compliance, such as failure to submit records or misuse of funds, may result in penalties or legal action against the association or its office-bearers. This builds confidence among apartment owners regarding the use of their money.

Penalties for Non-Compliance with the Tamil Nadu Apartment Ownership Act 2022

To ensure the effectiveness of the Act and Rules, several penalties are provided:

• Promoters who fail to complete the handover process can be penalised.
• Associations that do not register or submit mandatory documents face penalties.
• Apartment owners who delay maintenance dues may be charged interest linked to the State Bank of India’s Marginal Cost of Funds Lending Rate (MCLR).

These provisions create a legal deterrent against delays, mismanagement, or negligence by any party.

RERA and the Tamil Nadu Apartment Ownership Act 2022: Ensuring Legal Alignment and Clarity

One of the strengths of the new framework is its consistency with RERA, the central real estate regulatory law. Key terms such as “apartment”, “common areas”, and “carpet area” are defined in the same way, reducing confusion. This alignment ensures:

• Builders are not burdened by conflicting rules.
• Apartment buyers and owners can rely on a uniform set of definitions and standards.
• Enforcement becomes easier across agencies.

Conclusion

The Tamil Nadu Apartment Ownership Act, 2022, along with the 2024 Rules, marks a significant and much-needed reform in the regulation and governance of apartment living in Tamil Nadu. For the first time, a well-defined legal structure exists to guide the formation of associations, ensure clarity in common area usage, and streamline redevelopment — especially for ageing buildings with untapped FSI potential.
While the Act is a welcome development, its implementation is not without challenges. Initial feedback from apartment owners and resident welfare groups in Chennai suggests that the process of registering associations under the new law has encountered a few practical hurdles.
Though the redevelopment rules have generated considerable interest, actual project rollouts remain limited, likely due to the time required for consensus-building, planning approvals, and formation of competent associations.

However, these are early-stage implementation hiccups typical of any major policy shift. Over time, as awareness improves and administrative clarity is established, the benefits of this law will be far-reaching. The alignment with RERA adds legal strength, ensures uniform definitions (such as ‘carpet area’ and ‘common areas’), and reduces the possibility of disputes.

As more associations begin to register and redevelopment projects take shape, the positive impact of this law will become more visible across cities like Chennai, Coimbatore, and Madurai.

Most importantly, the new law provides a long-overdue structure for redevelopment, unlocking hidden value in old buildings and improving the urban environment.

Apartment owners, promoters, and associations must now become familiar with the Act and ensure timely compliance. With these changes, Tamil Nadu’s apartment sector is set to become more transparent, participatory, and future-ready.