NOVEMBER 2021
HSM HOA
MAINTENANCE COOPERATIVE
LTD
BYE LAWS
DRAFT FOR
REVIEW
&
APPROVAL
Our actions and decisions today will shape
the way we will be living in the future.
BYELAWS OF LSM HOA
Maintenance Cooperative Society Ltd.
Chandra Nath
The above to be replaced by Owners of LSM once reviewed approved by them
November 20, 2021
Contents
1 Preamble 8
2 Name & Location 8
3 Affiliation 8
4 Objects of the Society 8
4.1 To obtain conveyance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 To Administer & Manage Common Fixed and Movable Assets . . . . . . . . . . . . 9
5 COOPERATIVE PRINCIPLES 10
6 COMMUNITY ASSOCIATION 11
7 DEFINITIONS 11
8 Personal Application 16
1
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9 MEMBERSHIP AND VOTING 17
9.1 Membership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
9.2 Voting of Member . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10 Suspension of Member’s Rights 17
11 Majority of Owners 18
12 MEETING OF MEMBERS AND NOTICE 18
12.1 Annual General Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.2 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.3 Notice of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.4 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
12.5 Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.6 Conduct of Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
12.6.1 The order of business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
13 Action by Written Ballot 20
14 Action Without Meeting 20
15 Minutes 21
16 COMMITTEES 21
16.1 Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
16.2 Term of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
16.3 Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
16.4 Vacancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
16.5 Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
17 NOMINATE ELECTION OF DIRECTORS 22
17.1 Nomination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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17.2 Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
18 MEETINGS OF DIRECTORS 23
18.1 Regular Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
18.2 Special Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
18.3 Emergency Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
18.4 Quorum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
19 Waiver of Notice 24
19.1 Action Without Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
19.2 Meetings Open to Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
19.3 Executive Session . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
20 POWERS AND DUTIES OF THE BOARD OF DIRECTORS 24
20.1 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
20.2 Duties of the Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
20.3 OFFICERS AND THEIR DUTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
20.3.1 Enumeration of Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
20.3.2 Election of Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
20.3.3 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
20.3.4 Special Appointments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
20.3.5 Resignation and Removal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
20.3.6 Vacancies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
20.3.7 Multiple Offices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
20.3.8 Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
21 ADMINISTRATION 30
21.1 Handling of funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
21.2 Building Repair Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
21.3 Details of essential repairs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
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21.4 Reserve Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
21.5 Depreciation Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
21.6 Maintenance of accounts and audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
21.7 Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
21.8 Audit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
21.9 Details of receipts and disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
21.10Structural audit of building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
21.11 Appropriation of surplus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
21.12 Membership of other Co-operative Institutions . . . . . . . . . . . . . . . . . . . . . 35
22 Act, Rules and Bye-laws 35
22.1 Alteration of the Bye-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
22.2 Interpretation of the Act or Bye-laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
23 Fiduciary Standard 36
23.1 Core Fiduciary Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
23.2 Official Immunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
24 GOVERNANCE GUIDELINES 37
24.1 Annual meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
24.2 Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
24.3 Communication . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
24.4 Conflict of interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
24.5 Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
24.6 Financial transparency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
24.7 Foreclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
24.8 Governance and the law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
24.9 Grievances and appeals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
24.10 Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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24.11Reserve funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
24.12Rules Enforced Uniformly . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
25 MODEL CODE OF ETHICS 39
26 BOOKS AND RECORDS 40
27 ASSESSMENTS 40
28 AMENDMENTS 40
29 CONFLICTS 41
30 RECORD DATE 41
31 NOTICES 41
32 CORPORATE SEAL 41
33 FISCAL YEAR 41
34 Signatures 41
35 Appendix A BILL OF RIGHTS 42
35.1 HOMEOWNER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
35.1.1 Contract between Owners and the Association . . . . . . . . . . . . . . . . . 42
35.1.2 Fundamental Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
35.1.3 Actions in sunlight . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
35.1.4 Right to Access to Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
35.1.5 Liberty & Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
35.1.6 Absolute Right to Vote . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
35.1.7 Speedy and Public Hearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
35.1.8 Equality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
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35.1.9 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
35.1.10 Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
35.1.11 Complaints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
35.1.12 Conflict of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
35.2 HOMEOWNER RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
35.3 COMMUNITY LEADERS : RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . 45
35.4 COMMUNITY LEADERS: RESPONSIBILITIES . . . . . . . . . . . . . . . . . . . 45
36 APPENDIX B: MODEL CODE OF ETHICS 46
36.1 A Board members should . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
36.1.1 Best interests of association . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
36.1.2 Sound Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
36.1.3 Bound by Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.1.4 Opportunities to Comment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.1.5 No Bias . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.1.6 No Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.1.7 Open Fair Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.1.8 speak in one voice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.2 Board members should not: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.2.1 Break Confidentiality of Info . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.2.2 No Promises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.2.3 No Violation of Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.2.4 No Personal Gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.2.5 No Misuse of funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.2.6 No Gifts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
36.2.7 No Misrepresentation of Facts . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
36.2.8 Protection of Privacy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
36.2.9 No Personal Attacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
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36.2.10 No Harassment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
36.2.11 Confidentiality of Executive Session . . . . . . . . . . . . . . . . . . . . . . . 48
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Review Request Note:
Please feel absolutely free to review and add/correct/improve in what ever way any of the provisions
you might like to add /correct. This may require thorough review before adoption. This section
will be removed once the review process is over and the bye laws are adopted.
1 Preamble 2 Name & Location
The name of the Cooperative is LSM HOA Main-
The bye-laws and best practices of Home Owners tenance Cooperative Society, hereinafter referred
Association has been formulated and kept for re- to as the “Society” The principal office of the co-
view over a period by Members of the Lakeshore operative shall be located in Lakeshore Manor.
Manor Owners. This contain the distilled wis- The meetings of members and directors may be
dom of many years of Home Owners Associations held at such places within the City, as may be
experience of creating a democratic apparatus to designated by the Board of Directors.
manage their common interest development and
running the same essentially to: 3 Affiliation
1. Preserve
2. Protect The Society, immediately after its registration,
shall become a Member of the Co-op Housing
3. Maintain & Federation of the District / Ward / Taluka, the
4. Enhance the value of the Assets District Central Co-operative of the District, and
shall pay sums, from time to time, payable by it,
Any initiatives, policies, rules, bye-laws and under the bye-laws of the respective organisa-
actions of the society, its members & its officials tions referred to above.
should be reviewed, evaluated and adjudged with
the objectives clearly stated in this preamble and 4 Objects of the Society
to be accepted or rejected on the basis of this
alone. The objects of the Society shall be as under :
9 Byelaws LSM
4.1 To obtain conveyance common areas and facilities to the best ad-
vantage and benefit of the members and
To obtain conveyance from the Promoter residents in accordance with Co-operative
Builder, in accordance with the provisions of the principles.
Karnataka Ownership Flats Act and the Rules
made there under, of the right, title and inter- 3. To raise funds for achieving the legitimate
est, in the land with building/buildings thereon, objects of the Society.
the details of which are as here under :
4. To manage, maintain and ad-
The building / buildings known / numbered minister the undivided common
as .................................. constructed on the plot area/facilities/property of the Society.
/ plots nos............../ Survey no. ............. / CTS
no.................... of ..................................( village 5. To employ, engage and control the staff as
/ taluka ) admeasuring ..................... sq. me- essential for the proper administration of
ters, more particularly described in the applica- the Society, keeping in mind economy and
tion for registration of the Society; necessity.
4.2 To Administer & Manage 6. To take necessary steps for the efficient
Common Fixed and Movable administration of the Society within the
Assets framework of the Act,Rules, Bye-laws and
the other enactments in force and in ac-
1. To ensure proper taking over of assets cordance with Co-operative principles and
physically as well as legal title from secular ideals.
the builder with respect to common ar-
eas/facilities. 7. To construct or to build or cause to be con-
structed, necessary infrastructure required
2. To manage, maintain and administer the for common utility of the members by em-
land, common areas, restricted areas, facil- ploying the Society’s funds or by collect-
ities and amenities intended for the com- ing the required funds from the concerned
mon usage of the members within the members where necessary with the due ap-
premises of the Society and to develop the proval of the General Body.
10 Byelaws LSM
8. To manage reconstruction/ rebuilding of bership. Members allocate surpluses for any or
units and facilities when duly authorized all of the following purposes, developing the co-
sanctions are obtained from the General operative possibly by set- ting up reserves part of
Body and local authorities which at least would be in- divisible, benefiting
members in proportion to their transactions with
5 COOPERATIVE PRIN- the co-operative, and supporting other activities
approved by the membership.
CIPLES 4. Co-operatives are autonomous, self-help
1. Co-operatives are voluntary organizations, organizations controlled by their members. If
open to all persons able to use their services and they enter into agreements with other organiza-
willing to accept the responsibilities of member- tions including Government or raise capital from
ship, without gender, social, racial, political or external sources, they do so on terms that ensure
religious discrimination. democratic control by their members and main-
2. Co-operatives are democratic organiza- tain their cooperative autonomy.
tions con- trolled by their members, who actively 5. Co-operatives provide education and
participate in setting their policies and making training for their members, elected representa-
decisions. Men and women serving as elected tives, managers, and employees so they can con-
representatives are accountable to the member- tribute effectively to the development of their
ship. In Primary co- operatives, members have co-operatives. They in- form the general pub-
equal voting rights (One member, one vote) and lic particularly young people and leaders about
co-operatives at other levels are organized in a the nature and benefits of cooperation.
democratic manner. 6. Co-operatives serve their members most
3. Members contribute equitably to, and effectively and strengthen the co-operative move-
democratically control the capital of their co- ment by working together through local, re-
operative. At Least part of that capital is usually gional, national and international structures.
the common property of the co-operative. They 7. While focusing on member needs, co-
usually receive limited compensation, if any, on operatives work for the sustainable development
the capital subscribed as a condition of mem- of their communities through policies accepted
11 Byelaws LSM
by their members. tual and ethical responsibility to abide by estab-
lished policies and meet their financial obliga-
6 COMMUNITY ASSOCI- tions to the association.
ATION 7. Association leaders protect the commu-
nity’s financial health by using established man-
In addition to the governance structure being a agement practices and sound business principles.
cooperative, it is essentially a Community As- 8. Association leaders have a legal and ethi-
sociation and hence need to meet the following cal obligation to adhere to the associations gov-
needs: erning documents and abide by all applicable
1. Association to ensure that the collective laws.
rights and interests of homeowners are respected 9. Association leaders seek an effective bal-
and preserved. ance between the preferences of individual resi-
2. Associations are the most local form of dents and the collective and individual rights of
representative democracy, with leaders elected homeowners.
by the society to govern in the best interests of 10. Association leaders and owners/residents
all residents. should be reasonable, flexible and open to the
3. Associations provide services and ameni- possibility and benefits of compromise, especially
ties to residents, protect property values and when faced with divergent views.
meet the established expectations of homeown- 11. In all cases, the individual rights un-
ers. der the laws of the land are always protected
4. Associations succeed when they cultivate under the Association irrespective of any brute
a true sense of community, active homeowner in- force majority opinions counter to these individ-
volvement and a culture of building consensus. ual rights.
5. Association homeowners have the right
to elect their community leaders and to use the 7 DEFINITIONS
democratic process to determine the policies that
will protect their investments. Unless otherwise separately provided in these
6. Association homeowners accept a contrac- bye-laws, the following words and terms shall
12 Byelaws LSM
have the meaning assigned to them here. Words 5. “Apartment” means a part of the property
importing singular or plural numbers shall in- intended to be owned.
clude the plural or singular number and words
importing the masculine gender shall include the 6. “Authorized Person” means a person duly
feminine gender; authorized to take action under the provi-
sions of this Act.
1. “Associate Member” means a Members 7. “Associate Member” means a Members
who holds the right, title and interest in the who holds the right, title and interest in the
property individually or jointly with oth- property individually or jointly with oth-
ers, but whose name does not stand first ers, but whose name does not stand first
in the share certificate; in the share certificate;
2. “Act” means the Karnataka Co-operative 8. “Building Repair Fund” means the fund
Societies constituted under the provisions of the
Bye-law of the Society and intended for
3. “Active Member” means i. One who has the upkeep of the buildings, common ar-
purchased and owns a Flat / Unit in the eas, restricted areas and facilities on the
Society. ii. iii. One who attends at premises. The fund is however not to be
least one General Body Meeting of the used in the interiors of the Apartments for
Society in the previous five consecutive repairs, upkeep,replacement of fitments,
years.Provided that nothing in this clause modifications or improvements, which is
shall apply to the members whose absence the responsibility of the members
has been condoned by the General Body
Meeting of the Society. Who has paid 9. “Building” in our context means a building
the Society Maintenance Service and other with a number of dwelling units or facili-
charges at least once in previous consecu- ties.
tive five years.
10. “Bye-laws” means by-laws as approved by
4. “Apartment owner” means the person Society consistent with the Act and regis-
owning a dwelling unit. tered under this Act for the time being in
13 Byelaws LSM
force and includes registered amendments the same set of core principles and values,
of such bye-laws; adopted by the International Co-operative
Alliance. Cooperatives trace the roots of
11. “Corporation/Municipal Act” means the these principles to the first modern coop-
Bangalore Corporation/ Municipalities erative founded in Rochdale, England in
Act 1844.
12. “Chief Executive Officer” (CEO) is the 17. “Common Areas and Facilities” means
highest-ranking executive in an organiza-
tion or company. Broadly speaking, a chief (a) the land on which the building is lo-
executive officer’s primary responsibilities cated;
include making major corporate decisions,
managing the overall operations and re- (b) the foundations, columns, girders,
sources of a company, acting as the main beams, supports, main walls, roofs,
point of communication between the board halls, corridors, lobbies, stair-ways,
of directors and corporate operations. lifts / escalators , fire escapes and en-
trances and exits of the building;
13. “Clear Notice” means the number of cal- (c) the basements, cellars, yards, gar-
endar days intervening between the day of dens, parking areas un-demarcated /
posting the notice and the day of the meet- demarcated parking slots, and storage
ing; spaces;
14. “Committee” means the Committee of (d) the premises for the lodging of jani-
Management/owners/residents of the So- tors or persons employed for the man-
ciety to which the affairs of the Society is agement of the property;
entrusted;
(e) installations of central services such
15. “Competent Authority” in relation to the as power, light, gas, water storage
buildings and water heating, water harvesting,
pump houses, refrigeration, air con-
16. “Cooperative Principle” Cooperatives ditioning, generators, roof top solar
around the world operate according to devices, common antennas and mass
14 Byelaws LSM
communication and data sharing de- includes husband, wife, father, mother,
vices, sister, brother, son, daughter, son-in-law,
(f) the elevators, tanks, pumps, motors, brother-in-law, sister-in-law, daughter-in-
fans, compressors, ducts and in gen- law, grandson /daughter.
eral all apparatus and installations
existing for common use; 21. “Flat” means a separate and self contained
(g) such community and commercial fa- set of premises used or intended to be used
cilities as may have been provided for; for residence the premises forming part of
all other parts of the property nec- a building and includes an apartment;
essary or convenient to its existence,
maintenance and safety or normally 22. “Functional Director” means and includes
in common use. a Chief Executive Officer or Manager or
by whatever designation called, Nominated
18. “Depreciation Fund” means the fund con- by a Committee and discharges duties and
stituted by an organization to provide functions as may be assigned to him by the
money to buy new fixed assets or replace- Committee.
ment of the asset in use. Every year, the
fund invests an amount of money equal to 23. “Government” means the Government of
an existing asset’s depreciation allowance Karnataka;
in gilt-edged securities, giving the organi-
zation money that can be used to buy new 24. “Housing Society Federation” means the
assets federation of cooperative housing societies,
registered and notified under the Act;
19. “Expert Director” means and includes a 25. “Member” means a person joining on the
person having experience in the field of application for the registration of a Co-
Housing, cooperation and the field relating operative Society
to the objects and activities undertaken by
the Society. 26. “Major Repair” means expenses by the So-
ciety and constituted under Bye-law for the
20. “Family” means Group of persons which purpose of Major Repairs including Plas-
15 Byelaws LSM
tering, building of compound wall, pave- Promotion of Construction, Sale, Manage-
ment, total painting, reconstruction ment and Transfer) Act. 1963
27. “Nominal Member” means a person who 33. “Papers” means all or any of the items
does not hold the right, title and interest mentioned in the bye-laws
in the property individually or jointly ad-
mitted to Membership as such after regis- 34. “Parking Slot” means demarcated and
tration. numbered individual parking slot for a sin-
gle vehicle ( for four wheeler LMV or two
28. “Officer” means a person elected or ap- wheeler ) within the Parking Space avail-
pointed by a Society to any office of such able with the Society
Society and includes any office bearer such
as a Chairman, Vice-Chairman, Chairper- 35. “Parking Space” means a marked open
son, President, Secretary, Joint Secretary, space within the property earmarked for
Treasurer, Joint Treasurer, Member of the parking.
Committee, Manager, and any other per-
son elected or appointed to give directions 36. “Promoter Builder” means a person and
in regard to the business of such Society. includes a partnership firm or a body or
association of person, [whether registered
29. “Owner” means owners of the dwelling or not] who constructs or causes to be con-
units allocated exclusively to individual structed a block or building of flats [or
owners. apartments] for the purpose of selling some
or all of them to other persons, or to a com-
30. “Open space” means an Area, forming a pany, Co-operative Society or other associ-
integral part of the site, left open to sky. ation of persons, and includes his assignees;
and where the person who builds and the
31. “Open terraces” means terraces which are person who sells are different persons, the
otherwise not in the exclusive possession of term includes both..
any of the Members.
32. “Ownership Flats Act” means the Kar- 37. “Registrar” means the person appointed
nataka Ownership Flats (Regulation of the under the
16 Byelaws LSM
38. “Reserve Fund” means the fund consti- Roll for and conduct of the Elections of
tuted under the provisions of Section 66 Committee of a Society or such class of So-
(1) of the Act and the Bye-law cieties as may be notified.
39. “Registrar” means the person appointed 45. “Working Capital” means funds at the dis-
under the Act to regulate cooperatives. posable of the Society inclusive of the paid
40. “Repairs and Maintenance Fund” means up capital, share capital, funds created out
the fund constituted under the Byelaws. of profits, and money raised by borrowing
or by any other means.
41. “Reserve Fund” means the fund consti-
tuted under the provisions of Section 66 46. “Year” means the Co-operative year as de-
(1) of the Act and the Bye-law fined in the Cooperative Act. Year shall be
co-terminus with the Co-operative
42. “Rules” means the Karnataka Co-
operative Societies Rules, 1960, as All other words and expressions in these Bye-
amended from time to time. laws shall have the same meaning assigned to
them as under the Act and the Rules:
43. “Sinking Fund” means the fund consti-
tuted under the Bye-law for major replace- Personal Application
ment or repair as a result of formal reserve 8
study. The owner of the account collects All present or future Owners, tenants, future ten-
from the owners specifically for this pur- ants, or their employees, or any other person who
pose and sets aside the amount of money might use the facilities of the Project in any man-
regularly and uses it ONLY for the specific ner, are subject to the regulations set forth in
purpose for which it was collected. these bylaws and all governing documents of the
44. “State Co-operative Election Authority” Association. The mere acquisition or rental of
means an Authority constituted or nomi- any of the Lots of the Project or the mere act
nated by the State Government for the pur- of occupancy of any of the Lots will signify that
poses of superintendence, direction, and these bylaws are accepted, ratified and will be
control of the preparation of the Electoral complied with.
17 Byelaws LSM
9 MEMBERSHIP AND Proof of membership (such as a sales deed),
VOTING if called for by the Association or its managing
agent, must be provided to the Secretary of the
The Society, immediately after its registration, Association (or other designated representative)
shall become a Member of the Co-op Housing prior to any rights of membership being exer-
Federation of the District / Ward / Taluka, the cised.
District Central Co-operative Bank. of the Dis-
trict, and shall pay sums, from time to time, 9.2 Voting of Member
payable by it, under the bye-laws of the respec- Members shall be all those Owners as defined
tive organisations referred to above. above. Voting rights are based on one vote per
9.1 Membership Unit owned. When more than one person holds
title, all such persons collectively shall be the
Every person or entity who is a record Owner of a member (for the unit in question). The vote
fee or undivided fee interest in any Unit which is shall be exercised as they among themselves de-
subject by covenants of record to assessment by termine, but in no event shall more than one vote
the Association, including contract sellers, shall be cast with respect to any Lot. The Association
be a member of the Association. shall be entitled to presume that any ballot ten-
dered by one or more Owners of the Lot was the
The foregoing is not intended to include per- result of agreement by all other Owners. If con-
sons or entities who hold an interest merely as flicting ballots are cast by Owners, none will be
security for the performance of an obligation. counted.
Membership shall be appurtenant to and may
not be separated from ownership of any Lot
which is subject to assessment by the Associa- Suspension of Member’s
tion. Ownership of such Lot shall be the sole 10
qualification for membership, and such member- Rights
ship shall continue until such time as the Owner’s
ownership terminates, at which time him/her Members are subject to suspension of member-
membership shall automatically cease. ship for voting purposes and for purposes of use
18 Byelaws LSM
of the recreational facilities when their assess- purpose stated on the meeting notice.
ment payments fall delinquent
12.3 Notice of Meetings
11 Majority of Owners Written notice of each meeting of the members
shall be given by, or at the direction of, the Sec-
As used in these bylaws, the term ‘majority of retary or person authorized to call a meeting not
owners’ shall mean those Owners entitled to cast less than ten (10) days nor more than ninety
fifty-one percent (51 %) of the total votes. (90) days before such meeting. The notice shall
specify the place, day and hour of such meeting.
12 MEETING OF MEM- Written notice for special meetings must include
BERS AND NOTICE the purpose of the meeting. Notice of a meeting
shall be deemed to be received when delivered to
12.1 Annual General Meeting the member’s address or 48 hours after first-class
mailing.
Annual meetings of the members shall be held
each year at the time and place indicated in the 12.4 Quorum
notice described in Section 3 below. The presence at the meeting of the members enti-
12.2 Special Meetings tled to cast, or of proxies entitled to cast, thirty-
three, and one-third percent (33 1/3%) of the
Special meetings of the members may be called votes shall constitute a quorum for any action
at any time by the President or by a majority of unless otherwise provided in the Articles of In-
the Board of Directors. A special meeting shall corporation, the Restated Declaration, these by-
be called upon presentation of a written request laws, or by the cooperative laws. If, however,
of five percent (5 %) of the membership unless such quorum shall not be present or represented
the subject of the meeting is a dispute which is at any meeting, the members entitled to vote
resolved prior to the date set or the subject is not thereat shall have power to adjourn the meeting
for a lawful purpose. No action may be taken at from time to time, without notice other Om an-
a special meeting that does not fall within the nouncement at the meeting, to a date not less
19 Byelaws LSM
than 5 days, nor more than 30 days, from the • (b) consideration of latest available au-
original meeting date. 11e quorum for the ad- dit report and the report of the *board*
journed meeting shall be twenty-five percent (25 thereon;
%) of the total voting power of the Association.
When a quorum is present, a majority of the • (c) consideration of inquiry report, if any;
voting interests present shall decide any ques-
tion brought before dz membership unless a dif- • (d) disposal of net profits;
ferent. percentage of approving votes is required
for the specific act under the Karnataka Coop- • (e) review of operational deficit, if any, and
erative Act and Rules. programme to reduce such deficit;
12.5 Proxies • (f) approval of the programme of activities
of the society prepared by the *board* for
At all meetings of members, each member may the ensuing year;
vote in person or by proxy. All proxies shall be in
writing and filed with the secretary. Every proxy • (g) approval of the annual budget;
shall be revocable and shall automatically cease
upon conveyance by the member of his/her I-0. • (h) creation of specific reserve and other
No proxy shall be valid after eleven (11) months funds;
from the date of execution.
• (i) approval of membership of the co-
12.6 Conduct of Meetings operative society in other co- operative so-
cieties;
All membership meetings shall be conducted in a
manner consistent with generally accepted pro- • (j) review of annual report and accounts of
cedures of parliamentary procedure and KCS any subsidiary organization, if any;
1959 section 29.
• (k) perusal of list of the employees re-
• (a) consideration of annual report pre- cruited who are relatives of members of the
sented by the *board*; *board* or the Chief Executive;
• (l) amendment of bye-laws;
• (m) formation of code of conduct for the
members of the *board*, office bearers and
employees of the co-operative society;
20 Byelaws LSM
• (n) note on admission and termination of 1. roll call;
members; 2. proof of notice of meeting or waiver of no-
– (n-1)-review of the use of the services tice
of the society by the members and di- 3. reports of officers
rectors of the society;
– (n-2)- consideration of the loans and 4. report of committees
advances made to the directors and 5. election of inspectors of election
their relatives, the defaults, if any,
and the action taken for recovery 6. election of Directors
thereof; 7. unfinished business
– (n-3)- consideration of the inquiry 8. new business.
and inspection reports, if any, and the
compliance report of the board on the
action taken regarding the rectifica- 13 Action by Written Ballot
tion of defects and remedying of the Any action which may be taken at a regular or
irregularities pointed out in the said special meeting of members may be taken with-
reports; out a meeting if a proper ballot/electronic ballot
– (n-4)- appointment of auditors; is prepared containing all the legal requirements.
– (n-5)- voluntary amalgamation, divi-
sion, merger, transfer of assets and li-
abilities; 14 Action Without Meeting
– (n-6)- decision on bad debts consid- Any action, which under the provisions of the
ered as irrecoverable law under force may be taken at a meeting of
12.6.1 The order of business the Owners, may be taken without a meeting if
authorized by a writing signed by all of the Own-
The order of business of all meetings shall be as ers who would be entitled to vote at a meeting
follows: for such purpose, and filed with the Secretary.
21 Byelaws LSM
15 Minutes 16.3 Removal
Minutes shall be recorded at all meetings and The entire Board of Directors, or any individ-
available for review by Owners within fifteen (15) ual Director, may be removed from office when
days after a meeting, in draft, summary or fi- his/her removal is approved by a majority of the
nal form. Owners are to receive notice of the members of the Association. Any vacancy cre-
availability of Minutes at least once each year by ated by removal shall be filled by election of the
general mailing or personal delivery. new Director(s) by the Owners. Any Director
whose removal is proposed shall receive a chance
to address the membership at the meeting called.
16 COMMITTEES
16.4 Vacancy
16.1 Number If any Director misses three (3) or more consec-
The affairs of this Association shall be managed utive Board meetings which have officially been
by a Board of Directors, seven (7) in number, convened, that Director forfeits his/her right to
who are members of the Association. No two remain on the Board, and the remaining Board
family members (by blood relation or by mar- members may declare the position of that Direc-
riage) shall serve on the Board at the same time. tor vacant, by majority vote. The remaining Di-
rectors may then choose a successor by election
16.2 Term of Office among them to serve out the unexpired term of
the Director who forfeited his/her position on
the Board for failure to regularly attend Board
The Directors shall serve staggered two (2) year
meetings.
terms. At the expiration of the initial term of
office of each respective Director, his/her succes-
16.5 Compensation
sor shall be elected to serve a term of two (2)
years. The Directors shall hold office until their No Director shall receive compensation for any
successors have been elected and hold their first service he/she may render to the Association in
meeting. his or her capacity as a Director. However, any
22 Byelaws LSM
Director may be reimbursed for his/her actual Castes and Scheduled Tribes;
expenses incurred in the performance of his/her
duties which have been approved prior to expen- 2. two seats to be filled by election, in favour
diture by the Board of Directors. of women:
17 NOMINATE ELEC- 3. Two seats to be filled by election, in
TION OF DIRECTORS favour of the persons belonging to back-
ward classes in such manner as may be pre-
scribed.]
17.1 Nomination (Please refer to: KCS Act and Amend-
ment to KCS Act 2016 https://drive.
Nomination for election to the Board of Direc- google.com/file/d/1IQtIuScgECA6Q69N_
tors shall be made by a Nominating Committee. Xhf1X5WGmiSS1mt/view?usp=sharing
Nominations may also be made from the floor at
the annual meeting. The Nominating Commit- 17.2 Election
tee shall consist of a Chairman, who may be a Election to the Board of Directors shall be by
member of the Board of Directors, and two or secret written ballot. At such election the mem-
more members of the Association. The Nom- bers or their proxies may cast one vote per
inating Committee shall be appointed by the unit. The persons receiving the largest num-
Board of Directors prior to each annual meet- ber of votes shall be elected. A vote for a Di-
ing of the members. The Nominating Commit- rector nominated may be cast by a member by
tee shall make as many nominations for election mail/electronic means on a ballot forwarded by
to the Board of Directors as it shall in its dis- the Board to the member at least five (5) days
cretion determine, but not less than the number prior to the annual meeting, provided such a bal-
of vacancies that are to be filled. Such nomina- lot is received by the Board or the Secretary prior
tions must be made from members. Out of 13 to or at the annual meeting. A member not per-
directors, the following will be included: sonally present at the meeting but who has so
1. one seat to be filled by election, in favour cast his ballot shall be counted as present at the
of the persons belonging to the Scheduled meeting for quorum purposes
23 Byelaws LSM
18 MEETINGS OF DIREC- The Board member first notified shall make
TORS a good faith attempt to notify each and every
other Board member and call a meeting at the
18.1 Regular Meetings earliest possible reasonable time. if it appears
Regular meetings of the Board of Directors shall sufficient Board members are not available for a
be held monthly at such place and hour as may meeting, said contact person shall attempt to get
be fixed from time to time by resolution of the a “consensus” from the Board member as to the
Board. Should any meeting fall upon a legal hol- action needed, depending on the circumstances.
iday, then that meeting shall be held at the same If the Board member making the calls/e-meeting
time on the next day which is not a legal holiday. request is unable to schedule a meeting with at
Notice shall be given to each Director, at least least a quorum present, in a reasonable time
48 hours, personally or by telephone or at least (consistent with the circumstances) the ‘consen-
four (4) days by email, prior to the meeting if sus’ shall determine what action is to be taken,
any rescheduling occurs by necessity. and shall be the subject of a request for ratifica-
tion at a later Board meeting. The contact per-
18.2 Special Meetings son shall make every possible attempt to achieve
at least a majority ‘consensus’ before taking any
Special meetings of the Board of Directors shall specific action.
be held when called by the President of the As-
sociation, or by any two Directors, after not less
than seventy-two (72) hours notice to each Di-
18.4 Quorum
rector in the manner prescribed by this Section
18.3 Emergency Meetings A 60% of the number of Directors shall consti-
tute a quorum for the transaction of business.
In any situation where action is needed and ei- Every act or decision done or made by a majority
ther a special or regular meeting will not suit the of the Directors present at a duly held meeting
purpose, the Board of Directors may handle the at which a quorum is present shall be regarded
action as follows: as the act of the Board.
24 Byelaws LSM
19 Waiver of Notice Directors may not participate in any delibera-
tion or discussion unless expressly authorized by
Before or at or after any meeting of the Board
the Board.
of Directors, any Director may, in writing, waive
notice of such meeting or may waive notice by Executive Session
19.3
written approval of the Minutes, and such waiver
shall be deemed equivalent to the giving of such The Board may, with the approval of a majority
notice. Attendance by a Director at any meet- of a quorum of the Directors, adjourn a meeting
ing of the Board shall be a waiver of notice by personnel matters, litigation or pending litiga-
him/her of the time and place thereof. If all tion, matter within the attorney/client privilege,
the Directors are present at any meeting of the and/or matters of a particularly sensitive nature
Board, no notice shall be required and any busi- involving rights to confidentiality hearings where
ness may be transacted at such meeting. appropriate provided the general nature of
19.1 Action Without Meeting 20 POWERS AND DUTIES
The Directors shall have the right to take any ac- OF THE BOARD OF DI-
tion in the absence of a meeting which they could RECTORS
take at a meeting by obtaining the written ap-
proval of all or a majority of the Directors. Any Powers
20.1
action so approved shall have the same effect as
though taken at a meeting of the Directors so The Board of Directors shall have power to:
long as reasonable attempts were made to con- 1. Conduct, manage and control the affairs
tact all Directors prior to the action being taken. and business of the Association and to
19.2 Meetings Open to Members adopt rules and regulations consistent with
the Restated Declaration relating to use
All regular and special meetings of the Directors of the Common Area facilities, panting re-
shall be open to all Members of the Association; strictions, etc., and to establish penalties
provided, however, that Members who are not for the infraction thereof;
25 Byelaws LSM
2. Suspend the voting rights and right to use if deemed advisable by a majority of the
of the recreational facilities of any member Board;
during any period in which such member is 8. To sue others, in the name of the Associa-
in default in the payment of any assessment tion, and sue Owners to collect delinquent
levied by the Association. Such rights may assessments or cure a violation of any re-
also be suspended after notice and hearing strictions, covenants, conditions, rules or
for any infractions of published rules and regulations of the Association or subdi-
regulations for a period of thirty (30) or vision (where deemed advisable or neces-
for as long as the infraction persists; sary); and,
3. Exercise for the Association all powers, du- 9. To borrow money for the purpose of im-
ties and authority vested in or delegated to proving the common properties and facil-
this Association and not reserved to the ities and with approval of a majority of
membership by official provisions of the the homeowners, mortgage those common
Bylaws. facilities if necessary. If such property is
mortgaged, the rights of mortgagees shall
4. Select all officers, agents, a manager, an be subordinate to the Owners’ rights.
independent contractor, or such other em-
ployees as they deem necessary, and to pre- 10. Participate in mergers and consolidations
scribe their duties; with other nonprofit corporations orga-
nized for the same purposes or annex ad-
5. Levy, collect and enforce assessments ditional residential property and common
by any means provided under the law/ area, provided that any merger, consolida-
byelaws;
6. Take whatever action in the Board’s dis- tion or such annexation shall have the as-
cretion is necessary to discharge any lien sent by vote of a majority of the members.
against the Common Area;
20.2 Duties of the Board
7. To change the location of the principal
office for business to a different location It shall be the duty of the Board of Directors to:
26 Byelaws LSM
1. Cause to be kept a complete record of all 6. Procure and maintain adequate liability
its acts and corporate affairs; (offering protection for not less than Rs —
— (200,000?) per occurrence), hazard, and
2. Delegate powers to committees, officers or other risk insurance on property owned by
employers and supervise all officers, agents, the Association;
and employees of the association and to see
that their duties are properly performed 7. Cause the Common Area and utility later-
als to be maintained as per normal business
3. Send written notice of each increase in reg- prudence.
ular assessment or imposition of special as-
sessment to every Owner subject thereto 8. Cause all taxes and assessments against the
within thirty (30) to sixty (60) days before property of the Association which are or
the increase or assessment becomes due; could become a lien on the Common Area
to be paid when due;
4. In its discretion, foreclose a recorded lien
against any properties for which assess- 9. Fulfill the annual financial reporting re-
ments are at least sixty (60) days delin- quirements of law by distributing to all
quent, or to bring an action at law against members:
the Owner personally obligated to pay the
same; (a) BUDGET INFORMATION The As-
sociations shall prepare and distribute
5. Issue, or to cause an appropriate officer to pro-forms operating budget to all of
issue, upon demand by any per-son or en- its members not less than 45 days or
tity entitled to receive that information, a more than 60 days prior to the begin-
certificate setting forth whether or not any ning of the Association’s fiscal year:
assessment has been paid. A reasonable
charge may be made by the Board for the i. The current estimated replace-
issuance of these certificates. If a certifi- ment cost, estimated remaining
cate states an assessment has been paid, life, and estimated useful life of
such certificate shall be conclusive evidence each major component.
of such payment;
ii. As of the end of the fiscal year for
27 Byelaws LSM
which the study is prepared: those major components that the
A. The current estimate of the Association is obligated to main-
tain
amount of cash reserves nec-
essary to repair, replace, re- (b) REVIEW. A review of the financial
store, or maintain major statement of the Association which is
components. prepared in accordance with generally
B. The current amount of accu- accepted accounting principles for any
mulated cash reserves actu- fiscal year in which the gross in-
ally set aside to repair, re- come to the Association exceeds ....x
place, restore, or maintain amount must be distributed within
major components. 120 days after the close of each fiscal
C. The percentage represented year to all members of the Associa-
by the above to the total of tion.
above.
iii. A statement as to whether the (c) DELINQUENT ASSESSMENT
Board of Directors of the Asso-
ciation has determined or antic- POLICY-, Prepare and distribute
ipates that the levy of one or
more special assessments will be a statement describing the Associa-
required to repair, replace, or re-
store any major component or to tion’s policies and practice in enforc-
provide adequate reserves there-
for. ing lien rights or other legal remedies
iv. A general statement addressing
the procedures used for the calcu- for default in payment of its assess-
lation and establishment of those
reserves to defray the future re- ment against its members at least
pair, replacements or additions to
annually to the members during the
60-day period immediately preced-
ing the beginning of the Association’s
fiscal year.
10. Enforce applicable provisions of the Bylaws
and Articles by any lawful means or pro-
cedures, as deemed in the best interests of
28 Byelaws LSM
the Association. Association for that fiscal year, without ap-
11. Prohibited Acts: The Board shall not take proval of a majority of the homeowners.
any of the following actions, except with 13. Entering into any management agreement
the vote or written consent of a majority for the properties which is not terminable
of the voting power of the Association: by the Association in sixty (60) days or less
with or without cause, upon written notice
(a) Entering into a contract with a third thereof. The term of any such agreement
person wherein the third person will may not exceed one year.
furnish goods or services for the Com-
mon Area or the Association for a
term longer than one year with the 14. Filling a vacancy on the Board of Direc-
following exceptions: (1) A contract tors created by removal by members of a
with a public utility company if the Director. Such vacancy must be filled by
rates charged for the materials or ser- election by the members.
vices are regulated by the public Util-
ities Commission; provided, however,
that the term of the contract shall not 20.3 OFFICERS AND THEIR
exceed the shortest term for which the DUTIES
supplier will contract at the regulated
rate; (2) Prepaid casualty and/or li- 20.3.1 Enumeration of Office
ability insurance policies of not to .The officers of this Association shall be a Presi-
exceed three years duration provided dent and Vice President, who shall at all time be
that the policy permits short rate can- members of the Board of Directors, a Secretary,
cellation by the insured. a Treasurer, and such other officers as the Board
12. Selling during any fiscal year property of may, from time to time, by resolution create in-
the Association having an aggregate fair cluding, but not limited to Assistant Secretary,
market value greater than five (5%) per- Assistant Treasurers, or additional Vice Presi-
cent of the budgeted gross expenses of the dents.
29 Byelaws LSM
20.3.2 Election of Officers tance of such resignation shall not be necessary
to make it effective.
The election of officers shall take place at the
first meeting of the Board of Directors following 20.3.6 Vacancies
each annual meeting of the members. A vacancy in any office may be filled by appoint-
20.3.3 Term ment by the Board. The officer appointed to
The officers of this Association shall be elected such vacancy shall serve for the remainder of the
annually by the Board and each shall hold of- term of the officer he/she replaces.
fice for one (1) year, unless he/she shall sooner 20.3.7 Multiple Offices
resign, or shall be removed, or otherwise disqual-
The offices of Secretary and Treasurer may be
ified to save.
held by the same person. No person shall simul-
20.3.4 Special Appointments taneously hold more Om one of any of the other
offices except in the case of special offices created
The Board may elect such other officers as the pursuant to Section 4 of this Article.
affairs of the Association may require, each of
whom shall hold office for such period, have such 20.3.8 Duties
authority, and perform such duties as the Board The duties of the officers are as follows:
may, from time to time, determine. PRESIDENT
20.3.5 Resignation and Removal (a) The President shall preside at all meet-
ings of the Board of Directors; shall see that or-
Any officer may be removed from office with or ders and resolutions of the Board are carried out;
without cause by the Board. Any officer may shall sign all leases, mortgages, deeds and other
resign at any time giving written notice to the written instruments and may co-sign all checks
Board, the President or the Secretary. Such res- and promissory notes.
ignation shall take effect on the date of receipt of VICE PRESIDENT
such notice or at any later time specified therein, (b) The Vice President shall have the author-
and unless otherwise specified therein, the accep- ity to act in the place and stead of the President
30 Byelaws LSM
in the event of his absence, inability or refusal to ticle VI. If the Association engages the services
act, and shall exercise and discharge such other of a CPA or managing agent to undertake any of
duties as may be required of him by the Board, these asks, the treasurer is relieved of those spe-
and may co-sign all checks written on behalf of cific duties delegated to such person or entity.
the Association. COMMITTEES
SECRETARY The Board of Directors may appoint a Nom-
(c) The Secretary shall record the votes and inating Committee as provided in these bylaws.
keep the Minutes of all meetings and proceedings The Board may appoint an Architectural Con-
of the Board and of the members; serve notice of trol Committee, as provided in the Restated Dec-
meetings of the Board and of the members; keep laration. In addition, the Board of Directors
appropriate current records showing the mem- may appoint Other committees as deemed ap-
bers of the Association together with their ad- propriate in carrying out its purpose. Attention
dresses, and shall perform such other dudes as is drawn to 14AM. Powers and Functions of the
required by the Board, and may co-sign checks. chief executive.
TREASURER Please refer to Amendments to KCA Rules
(d) The Treasurer shall receive and deposit 2013 https://drive.google.com/file/d/
in appropriate bank accounts all monies of the 1YahMN8eC8ZsIIL0NzuHsfqSg9aMioZFt/view?
Association and may disburse such funds as di- usp=sharing
rected by resolution of the Board of Directors;
may co-sign all checks and promissory notes of 21 ADMINISTRATION
the Association; keep proper books of account; Handling of funds
21.1
cause an annual review of the Association books
to be made by a public accountant at the com- A Bank account shall be opened by the Soci-
pletion of each fiscal year; and may prepare an ety into Which all monies received shall be paid.
annual budget and a statement of income and The CEO may .however retain in his custody a
expenditures to be presented to the membership sum not exceeding Rs. 500/- belonging to the
at its regular annual meeting, pursuant to the fi- Society to meet sundry expenses of the Society.
nancial distribution requirements set forth in Ar- All payments above Rs. 500/- shall be made by
31 Byelaws LSM
cheque signed jointly by the Chairman and CEO in the premises of the Society, besides emergent
or in the absence of the Chairman by the Vice- special re- pairs without which the functioning
Chairman and CEO. All receipts and payments of the Society may be hampered. The amounts
made in cash shall be recorded in the Books of in such fund shall not however be utilized to-
Accounts, on the same date as the transaction. wards repairs and replacement of fittings in the
In making payment of bills, the amounts in pay- interiors of the Apartments owned by the mem-
ment shall not be split, merely to facilitate easy bers. The upkeep and repairs to the interiors of
payment. The Society shall maintain its Bank the Apartments owned by the members is the
account with the District Co-operative Bank in responsibility of the members themselves. The
the area. However, another Bank account in a following tasks in repairs may be carried out by
Nationalized or Scheduled Bank may be opened the Society on a work order basis, with expendi-
with the prior permis- sion of the Registrar of ture from their building repair fund.
Co-operative Societies. 1. All internal roads, Compound walls, exter-
21.2 Building Repair Fund nal wa- ter pipelines, water pumps, water stor-
age tanks, so- lar heaters, if installed. Exter-
Periodic major repair and upkeep of the build- nal rain water and drainage lines, Stair cases,
ings would necessitate sudden and very heavy Terrace and parapet walls, Staircase lights, secu-
burden or contribution from the members. To rity lights, outer walls of the tenement buildings,
ease the burden of such contributions from the electric service lines up to the meters and control
members, a fund called the building repair fund switches in the flats.
shall be created. The fund is to be collected from
members in monthly subscriptions to form a cor- 2. All other repairs and replacement of fit-
pus for meeting the contingencies of periodic and tings not covered by the Society, shall be carried
out by the members at their own cost.
essential major repairs of the buildings, the fa- Details of essential repairs
21.3
cilities, utilities and common areas of usage in
the Society. The amounts in the fund may also The details of essential repairs which may be car-
be utilized to meet contingencies of essential Mi- ried out in the buildings, facilities and utilities of
nor repairs and upkeep of the common facilities the Society and the nature and scope of major
32 Byelaws LSM
repairs, minor repairs and special repairs shall 21.6 Maintenance of accounts and
be outlined in subsidiary rules to be framed by audit
each Society, duly approved by the general body
The Society shall maintain either in paper or
and the Registrar of Co-operative Societies.
electronic form the following books of account,
21.4 Reserve Fund records and registers:
The Reserve Fund amount shall be invested in 1. Register of members;
the manner provided in Rule 23 of the Karnataka 2. Share issue register;
Co-operative Societies Rules, 1960. 3. Nomination register;
21.5 Depreciation Fund 4. Receipt book;
A Depreciation Fund at a rate to be decided by 5. Voucher book;
the General Body may be constituted and in- 6. Cash book;
vested on long term basis along with the inter- 7. General ledger;
est earned thereon by one of the modes, permit- 8. Occupation register Apartments;
ted under the Karnataka Co-operative Societies 9. Properties register;
Act. The fund is only to be utilized in excep- 10. Investment register;
tional cases, for reconstruction of the buildings 11. Loan register;
or for carrying out such structural additions or 12. Mortgage register;
alterations to the buildings as in the opinion of 13. Register library;
the Societies architects, would be necessary to 14. Minutes book of general meetings;
strengthen it or for carrying out such heavy re- 15. Attendance book general meetings;
pairs as may be certified by the architect as in- 16. Minutes book of the managing Committee
escapable and essential. Utilization of the fund
would require the prior sanction of the general meetings;
body and permission of the Registrar of Co-
operative Societies. This fund is also referred
to as the sinking fund.
33 Byelaws LSM
17. Audit rectification register; 12. Periodical statements submitted to the
18. Complaints and suggestions register; Regulators and the Government;
13. Audit memos and audit reports;
19. Building repairs work order book; 14. Notice and agenda of general body meet-
20. Other books of accounts as may be pre- ings;
scribed by the Director of Co-operative 15. Notice and agenda of meetings of the
Audit and the Register of Co-operative So-
cieties from time to time. Committee of management;
16. Copies of the Karnataka Cooperative So-
cieties Act and the Karnataka Co-operative So-
21.7 Documents cieties Rules as amended from time to time;
17. File containing all circulars/directions is-
The Society shall maintain the following docu- sued by the Registrar and the Director of Co-
ments in paper or electronic form: operative Audit or any other authority con-
1. Application for membership; nected with the Society; 18. Copies of docu-
2. Letter of resignation of members; ments of title deeds, registration of property;
3. Application for transfer of shares and in- 19. Receipts of Corporation taxes paid for
terest on the capital. the land, office and common areas or utility and
4. Correspondence with Registering Author- the restricted areas in the Society;
ity; 20. Electricity and water bills that are paid
5. Conveyance of property; by the Society;
6. Agreement and contract deeds; 21. Photo copy of the receipts of annual prop-
7. Application for allotment of Apartments; erty tax paid by the members to the City Cor-
8. Approved plans of Apartments; poration in regard to their Apartments.
9. copy of the registered Bye-laws with up-
to-date amendments; 21.8 Audit
10. Certificate of registration; The accounts of the Society shall be audited each
11. Member-wise loan application, sanction year by the Auditor appointed or deputed by the
and documentation; Director of Co- operative Audit in compliance of
34 Byelaws LSM
Section 63 of the Act. For the purpose or An- Co-operative Societies steps taken to rectify the
nual General Meetings of the Society, the audited same and the actions taken thereon.
statement of accounts and the audit report shall
be circulated amongst the members at least 15 21.10 Structural audit of building
days prior to such General Meetings. The state- In order to ensure that the buildings are capable
ment and Audit Report along with a brief of the of withstanding earthquakes, cyclone, fire disas-
replies furnished to the audit observations shall ter etc., the Society shall arrange for structural
be provided to the members and shareholders in audit to be undertaken by the panel of architects
advance, for consideration and approval by the of the Municipality or Architects/Structural ex-
general body. perts duly appointed by the Government in re-
21.9 Details of receipts and dis- spect of buildings within the Municipality lim-
bursements its, undertaken once in 5 years in case of all the
buildings which are more than 15 years old and
In compliance of Section 63(4-A) of the Act, once in 3 years in case of buildings which are 30
the Society shall furnish to the Registrar and to years old, and if the findings of such audit are se-
the Director of Co- operative Audit a statement rious, action shall be taken to direct occupants
showing details of receipts and disbursements, of such buildings to vacate the premises.
pro
t and loss and the balance-sheet for the year 21.11 Appropriation of surplus
and such other statements and returns as the The net profit of the Society shall be arrived at
Registrar and the Director of Co-operative Audit in the manner provided in Section 57 of the Act
may, direct within two months from the end of a and Rule 23. The net profit to be determined
financial year. Should any defect in the working shall be appropriated in the general meeting as
of the Society or other irregularity be pointed under.
out in audit, the Committee shall in terms of
Section 63(7) of the Act take action for rectifica- 1. The amount of not less than 25 per cent of
tion of the said defects and explain to the Direc- the net profit shall be carried to the reserve
tor of Co-operative Audit and the Registrar of fund.
35 Byelaws LSM
2. The balance of the net profit shall be uti- 21.12 Membership of other Co-
lized for all or any of the following pur- operative Institutions
poses:
The Society may become a member of the Kar-
(a) Contribution towards Co-operative nataka State Co-operative Housing Federation
Education Fund at the rates specified Limited, Bangalore or any other Co-operative In-
in the Act and Rules. stitution.
(b) Contribution to building fund, share Act, Rules and Bye-laws
capital redemption fund, jubilee fund, 22
employees welfare fund and building The Society shall keep a copy of the Karnataka
repair fund as may be specified in the Co- operative Societies Act, 1959, Karnataka Co-
Bye-laws. operative Societies Rules, 1960 and its Bye-laws
(c) Donation of amounts not exceeding at the registered office of the Society, open for
ten per cent of the net pro scrutiny and inspection free of charge by the
ts for any charitable purposes as de- members, at all reasonable times.
fined in Section 2 of the Charitable
Endowments Act, 1890. 22.1 Alteration of the Bye-laws
(d) Payment of dividend to members out No Bye-law shall be made, altered or modified
of the balance of net pro unless in conformity with the procedure pre-
ts available after making deductions scribed under the Act and rules and unless.
as provided above. 1. A proposal to do so along with a text of the
(e) Payment of bonus to employees of pro- posed amendments and the reasons
the Society as decided in the General therefor has been communicated in writ-
Body Meeting after the appropriation ing to all the members a clear fifteen days
made above provided if the Society in advance.
declared dividend to its members for 2. The resolution is passed by not less than
the last 3 years continuously. two-thirds of the members present and vot-
36 Byelaws LSM
ing at the general meeting. All alterations not in favor of a power.
to the Bye-law are to be approved and reg-
istered by the Registrar of Co- operative 23 Fiduciary Standard
Societies on payment of the fees, as appli-
cable. Members of a Board elected and officers ap-
pointed are subject to the standards applicable
22.2 Interpretation of the Act or to a trustee in a trust. This is the highest judi-
Bye-laws ciary standard. This standard reflects the not-
for-profit character of a common interest com-
Should any doubt arise as to the interpretation munity and the corporate quality of its govern-
of the Bye- laws in relation to the Act or Rules or ing body and the business it must conduct. It
in regard to any other matter, there is a right to means that the business judgment rule will ap-
have delegated powers construed narrowly, and ply to the decisions of the officials of a common
complementary rights or immunities of members interest community.
construed broadly, and when in doubt, the de-
cision must always be in favor of the claimed 23.1 Core Fiduciary Duties
right against an official action over the claimed
power of an official to so act. The onus of prov- The Members of a Board and officers and staff of
ing that the official has the powers to pass these the Society as trustees of the Society have Core
rules/act lies with the one who has usurped the Fiduciary duties towards the Members of the So-
powers and the onus to prove that the usurper ciety for whose benefit the Society is instituted.
has no authority to pass these rules does not lie This include
on the Member. In case of doubt, the Society/ 1. Core fiduciary duties of care
the Board shall obtain the advice and direction 2. Absolute and undivided loyalty to benefi-
of the Ombudsman and jurisdictional Registrar ciaries
of Co-operative Societies. 54. Strict Interpreta-
tion of Powers- Whether Powers be are right is 3. Prudence in dealing with trust funds
determined by the rule : A power is strictly in- 4. Disclose all material information when
terpreted. In cases of doubt, the presumption is seeking information on trust outgoes and
37 Byelaws LSM
income and their nature and disposal 24 GOVERNANCE GUIDE-
5. No undisclosed Conflict of interest at all LINES
whatsoever. 24.1 Annual meetings
6. Fair Process (approval by non interested Conduct at least one membership meeting an-
directors) or else burden on directors to nually, providing at least two weeks notice to
show entire fairness. homeowners and more than two weeks if spec-
7. No co-mingling of funds ified in the governing documents or dictated by
state statute.
23.2 Official Immunity 24.2 Assessments
There is a duty not only not to have members Collect assessments and other fees from home-
rights legislatively impaired, disabled, or disfa- owners in a timely and equitable manner and in
vored, but also not to have some accorded spe- accordance with state statutes and board- ap-
cial privileges or protections that favor them over proved procedures.
the rest of the people, in ways not essential to the
performance of public duties. This means official 24.3 Communication
immunity for damages extends only to each act Provide at least one form of regular communica-
under color of law for which an official has au- tion with residents, and use it to report substan-
thority and that is not an abuse of discretion, tive actions taken by the board.
not to everything an official might do while on
the job. This means official immunity for dam-
24.4 Conflict of interest
ages extends only to each act under color of
law for which an official has authority and Disclose all personal and financial conflicts of
that is not an abuse of discretion, not to interest before assuming a board position and,
everything an official might do while on once on the board, before participating in any
the job. board decisions.
38 Byelaws LSM
24.5 Elections sures have failed to resolve a serious delinquency
issue in a specified period of time.
Hold fair and open elections in strict con-
formance with governing documents, giving
24.8 Governance and the law
all candidates an equal opportunity to ex-
press their views and permitting each can- Govern and manage the community in accor-
didate to have a representative observe the dance with all applicable laws and regulations.
vote-counting process. Please refer to Para Conduct reviews of governing documents to en-
11. Insertion of new rules 13B, 13C, 13D, sure legal compliance and to determine whether
13E, and 13F.- After rule 13 A of the said amendments are necessary.
rules:https://drive.google.com/file/d/
1YahMN8eC8ZsIIL0NzuHsfqSg9aMioZFt/view? 24.9 Grievances and appeals
usp=sharing Allow residents to bring grievances before the
24.6 Financial transparency board or a board-appointed committee and fol-
low well-publicized procedures that give resi-
Share critical information and rationale with dents the opportunity to correct violations be-
residents about budgets, reserve funding, spe- fore imposing fines or other sanctions.
cial assessments and other issues that could im- Records
pact their financial obligations to the association. 24.10
Give members an opportunity, before final deci- Allow homeowners reasonable access to appro-
sions are made, to ask questions of a represen- priate community records, including annual bud-
tative who is fully familiar with these financial gets and board meeting minutes.
issues.
24.7 Foreclosure 24.11 Reserve funding
Account for anticipated long-term expenditures
Initiate lien and foreclosure proceedings only as as part of the annual budget-development pro-
a last step in a well-defined debt-collection pro- cess, commissioning a reserve study when pro-
cedure and only after other, less-disruptive mea- fessional expertise is warranted
39 Byelaws LSM
24.12 Rules Enforced Uniformly 5. Perform their duties without bias for or
Uniformly enforce all rules, including architec- against any individual or group of owners or non-
tural guidelines, but only after seeking compli- owner resi- dents. 6. Disclose personal or pro-
ance on a voluntary basis. fessional relationships with any company or in-
dividual who has or is seeking to have a business
Distribute proposals for new rules and guide- relationship with the association.
lines to all homeowners and non-owner residents.
Advise them when the board will consider new 7. Conduct open, fair and well-publicized
rules and encourage input. Once adopted, new elections.
rules and effective dates should be distributed to
every owner and resident. 8. Always speak with one voice, support-
ing all duly adopted board decisions even if the
board member was in the minority regarding ac-
tions that may not have obtained unanimous
25 MODEL CODE OF consent.
ETHICS B Board members should not:
1. Reveal confidential information provided
A Board members should by contractors or share information with those
1. Strive at all times to serve the best inter- bidding for association contracts unless specifi-
ests of the association as a whole regardless of cally authorized by the board.
their personal interests. 2. Make unauthorized promises to a contrac-
2. Use sound judgment to make the best pos- tor or bidder.
sible business decisions for the association, tak- 3. Advocate or support any action or activity
ing into consideration all available information, that violates a law or regulatory requirement.
circumstances and resources. 4. Use their positions or decision-making au-
3. Act within the boundaries of their author- thority for personal gain or to seek advantage
ity as defined by law and the governing docu- over another owner or non-owner resident.
ments of the association. 5. Spend unauthorized association funds for
4. Provide opportunities for residents to com- their own personal use or benefit.
ment on decisions facing the association. 6. Accept any gifts directly or indirectly from
40 Byelaws LSM
owners, residents, contractors or suppliers. chased at reasonable cost.
7. Misrepresent known facts in any issue in- Members have an absolute right of inspection
volving association business. of all books and records of the cooperative.
8. Divulge personal information about any
association owner, resident or employee that was
27 ASSESSMENTS
obtained in the performance of board duties.
9. Make personal attacks on colleagues, staff Each member is obligated to pay to the Asso-
or residents. ciation annual, special, and other assessments
10. Harass, threaten or attempt through any which are secured by a continuing lien upon
means to control or instill fear in any board mem- the property against which the assessment is
ber, owner, resident, employee or contractor. made. Any assessments which are not paid when
11. Reveal to any owner, resident or other due shall be delinquent and subject to late fees
third party the discussions, decisions and com- and/or interest as more fully provided in the bye
ments made at any meeting of the board properly laws. As more fully provided therein, the Asso-
closed or held in executive session. ciation may bring an action at law against the
Owner personally obligated to pay the same or
stand to risk to the property, and interest, costs,
26 BOOKS AND RECORDS
and reasonable attorney’s fees of any such action
The books of accounting, general records, min- shall be added to the amount of such assessment.
utes, and members name and address infor- No Owner may waive or otherwise escape liabil-
mation shall, during reasonable business hours ity for the assessments provided for herein by
and upon reasonable written notice and request non-use of the Common Area or abandonment
(stating a purpose therefor, be generally subject of his/her Lot.
to inspection by any member. The Restated
Declaration, the Articles of Incorporation and 28 AMENDMENTS
the bylaws of the Association shall be available
for inspection by any member at the principal of- These Bylaws may be amended, at a regular or
fice of the Association where copies may be pur- special meeting of the members, or by written
41 Byelaws LSM
ballot, by approval of a majority of a quorum of same has been deposited in the Post Office,
(as set forth in Article H, Section BA) of mem- postage prepaid, addressed to each such person
bers of the Association. at the address given by such person to the secre-
tary for the purpose of service of such notice or
29 CONFLICTS to the residence site of such person if no address
has been given to the secretary. Such address
In the case of any conflict between the Articles may be changed from time to time by notice in
of Incorporation and these Bylaws, the Articles writing to the secretary. All electronic mails are
shall control; and in the case of any conflict be- deemed to be official as are the postal mail.
tween the Bylaws and the laws of the land, the
laws of the land will hold. 32 CORPORATE SEAL
30 RECORD DATE The Association may obtain and use a Corporate
Seal with the Association’s legal name and date
Only persons who are owners of record as of the of original incorporation in it, if desired.
date and time of any meeting shall be entitled to
vote at that meeting. In a written ballot cam-
33 FISCAL YEAR
paign, the date of record for voting purposes is
the date the ballots are first due to be returned The fiscal year of the Association shall begin on
to the Association. the first day of April and end on the 31 th day
of March every year, except that the first fiscal
31 NOTICES year shall begin on the date of incorporation.
Any notice permitted or required to be deliv-
34 Signatures
ered as provided herein may be delivered either
personally (which includes delivery to mailbox IN WITNESS WHEREOF, we, being the Presi-
at the residence) or by mail or email. If deliv- dent and Secretary of the LSM HOMEOWNERS
ery is made by mail, it shall be deemed to have ASSOCIATION Maintenance Cooperative Ltd.
been delivered forty-eight (48) hours after a copy have hereunto set our hands this day of 199X.
42 Byelaws LSM
President formed consent to the terms of the associations
Secretary rules and governing documents, but most espe-
I, the undersigned, do hereby certify: cially to the governing documents which com-
THAT I am the duly elected and acting sec- prise the contract between the association and
retary of the LSM HOMEOWNERS ASSOCI- the homeowner and should clearly spell out the
ATION Maintenance Society Cooperative Ltd, Homeowner Rights.
and,
THAT, the foregoing Bylaws constitute the 35.1.2 Fundamental Rights
Bylaws of said Association, as duly approved by No CID board shall abridge a citizens freedom of
the requisite percentage of homeowners as re- speech or of the press either through direct or-
quired by the Bylaws and as duly adopted at der or through intimidation or any kind of pub-
a meeting of the Board of Directors thereof, held lic abuse; that no board shall abridge the right
on the day of —– . of homeowner citizens to assemble peaceably or
to petition the board for a speedy redress of
IN WITNESS WHEREOF, I have hereunto grievances. No CID board shall abridge freedom
subscribed my name on behalf of said Associa- of religion. Any right/privilege specifically NOT
tion on the the day of , 2021.
given to the co-operative society will lie with the
35 Appendix A BILL OF people i.e the Homeowner Members of the Soci-
RIGHTS ety. CID will make NO rule or law or what ever
named which violates or abridges in any way the
35.1 HOMEOWNER rights of the owners specifically provided under
35.1.1 Contract between Owners and the the rule of law of the land.
Association
35.1.3 Actions in sunlight
Since living in a common interest development
(CID) requires an individual citizen to enter Boards give a full, true and accurate accounting
into a contract with a governing association, in writing of all association actions. No actions
the prospective homeowner must give written in- shall be taken in secret.
43 Byelaws LSM
35.1.4 Right to Access to Records the accused be informed of the nature and cause
Homeowner citizens shall be entitled to speedy of the accusation; be confronted with witnesses;
access to all association records, particularly to and have a compulsory process for obtaining wit-
financial records, contracts, and records of gov- nesses, records, and advocates. Use of this sys-
ernance at any time without exception. tem does not cancel a citizens rights of appeal in
the courts.
35.1.5 Liberty & Property Rights
35.1.8 Equality
Homeowner citizens shall not be deprived of lib-
erty or property rights, without speedy due pro- Residents/owners shall be treated equally, and
cess of law. Nor shall private property be taken not in an arbitrary fashion, without reference to
without just compensation, specifically; there age, race, gender, cultural lifestyle, sexual orien-
shall be no non-judicial fore-closure. tation, national origin, marital status, disability
or familial status as established by both state
35.1.6 Absolute Right to Vote and central laws and regulations.
Homeowner citizens shall have the absolute right
35.1.9 Compliance With Laws
to vote on any changes to the terms of the orig-
inal contract, i.e. changes in rules and amend- Rules enacted by a CID association and amend-
ments to governing documents or fines they are ments to its governing documents must conform
expected to pay. No fine shall exceed the true to all state and central fair housing and health,
costs of the remedy. safety and welfare laws.
35.1.7 Speedy and Public Hearing 35.1.10 Elections
If accused of violating rules, homeowner citizens Elections shall be in the hands of the home-
are entitled to a speedy and public hesaring by owner citizens, not the CID board: ballots shall
an impartial body (Ombudsmen) not selected be secret; no homeowner citizen shall be denied
by the board; the impartial body shall deter- the right to vote for failure to pay any fine or
mine the guilt or innocence of the accused and tax, including assessments; directors shall serve
determine what fines, if any, be imposed; that no more than two terms and be held account-
44 Byelaws LSM
able for their decisions; the makeup of the board cially financial records challenges to election pro-
shall reflect the makeup of the association mem- cedures and results complaints over assessment
bership. collection
35.1.11 Complaints 35.1.12 Conflict of Interest
All complaints will be answered within 10 days An official (director or member of a committee)
from the date of receipt. Those complaints that shall not vote on any of the fol- lowing matters:
cannot be resolved will be decided by an indepen- Discipline of the official (director or committee
dent OMBUDSMEN BOARD (independent of member). An assessment against the director or
the Governing Board) and elected by the Mem- committee member for damage to the common
bers. Complaints from the homeowner-consumer area or facilities. A request, by the director or
may fall into two broad categories: committee member, for a payment plan for over-
due assessments. A decision whether to foreclose
1. Complaints arising during the time that on a lien on the separate interest of the director
the developer controls the association or that or committee member. Review of a proposed
he is transferring control of the association physical change to the separate interest of the
to homeowners who have purchased homes (or director or committee member. A grant of ex-
flats.) This is often the time that homeowners: clusive use of common area to the director or
complaint about construction defects; question committee member.
whether or not the developer has underfunded
/ misappropriated the reserve accounts (or not HOMEOWNER RESPON-
SIBILITY
35.2
funded them at all). question whether the devel-
oper is delivering common areas and amenities
as promised in the public report, marketing ma- 1. Read and comply with the governing docu-
terials, and purchase contracts ments of the community.
2. Complaints arising over governance issues 2. Maintain their property according to es-
after homeowners assume control of the associa- tablished standards.
tion. Complaints include: homeowner difficulty 3. Treat association leaders honestly and
in getting access to association records, espe- with respect.
45 Byelaws LSM
4. Vote in community elections and on other 4. Conduct meetings in a positive and con-
issues. structive atmosphere.
5. Pay association assessments and charges 5. Receive support and constructive input
on time. from owners and non-owner residents.
6. Contact association leaders or managers, if 6. Personal privacy at home and during
necessary, to discuss financial obligations and al- leisure time in the community.
ternative payment arrangements. 7. Request re- 7. Take advantage of educational opportuni-
consideration of material decisions that person- ties (e.g., publications, training workshops) that
ally affect them. are directly related to their responsibilities and
8. Provide current contact information to as- as approved by the association.
sociation leaders or managers to help ensure they
receive in- formation from the community. 35.4 COMMUNITY LEADERS:
RESPONSIBILITIES
9. Ensure that those who reside on their
property (e.g., tenants, relatives and friends) ad- 1. fulfill ll their fiduciary duties to the commu-
here to all rules and regulations. nity and exercise discretion in a manner they rea-
sonably believe to be in the best interests of the
35.3 COMMUNITY LEADERS : community. 2. Exercise sound business judg-
RIGHTS ment and follow established management prac-
tices.
1. 1. Expect owners and non-owner residents to 3. Balance the needs and obligations of the
meet their financial obligations to the commu- community as a whole with those of individual
nity. homeowners and residents.
2. Expect residents to know and comply with 4. Understand the associations governing
the rules and regulations of the community and documents, become educated with respect to ap-
to stay in- formed by reading materials provided plicable state and local laws and manage the
by the association. community association accordingly.
3. Respectful and honest treatment from res- 5. Establish committees or use other meth-
idents. ods to obtain input from owners and non-owner
46 Byelaws LSM
residents. 16. Make covenants, conditions and restric-
6. Conduct open, fair and well-publicized tions as understandable as possible, adding clari-
elections. 7. Welcome and educate new mem- fying language or supplementary materials when
bers of the community owners and non-owner drafting or revising the documents.
residents alike. 17. Provide complete and timely disclosure
8. Encourage input from residents on issues of personal and financial conflicts of interest re-
affecting them personally and the community as lated to the actions of community leaders, e.g.,
a whole. officers, the board and the committees. (Com-
9. Encourage events that foster neighborli- munity Associations may want to develop a code
ness and a sense of community. of ethics.)
10. Conduct business in a transparent man-
ner when feasible and appropriate. APPENDIX B: MODEL
11. Allow homeowners access to appropriate 36
community records when requested. CODE OF ETHICS
12. Collect all monies due from owners and
non-owner residents. 36.1 A Board members should
13. Devise appropriate and reasonable ar-
rangements, when needed and as feasible, to fa- 36.1.1 Best interests of association
cilitate the ability of individual homeowners to Strive at all times to serve the best interests of
meet their financial obligations to the commu- the association as a whole regardless of their per-
nity. sonal interests.
14. Provide a process residents can use to
appeal decisions affecting their non-routine fi-
36.1.2 Sound Judgment
nancial responsibilities or property rights where
permitted by law and the associations governing Use sound judgment to make the best possible
documents. business decisions for the association, taking into
15. Initiate foreclosure proceedings only as a consideration all available information, circum-
measure of last resort. stances and resources.
47 Byelaws LSM
36.1.3 Bound by Law 36.2 Board members should not:
Act within the boundaries of their authority as 36.2.1 Break Confidentiality of Info
defined by law and the governing documents of
Reveal confidential information provided by con-
the association. tractors or share information with those bidding
36.1.4 Opportunities to Comment for association contracts unless specifically au-
Provide opportunities for residents to comment thorized by the board.
on decisions facing the association. 36.2.2 No Promises
36.1.5 No Bias Make unauthorized promises to a contractor or
bidder.
Perform their duties without bias for or against
any individual or group of owners or non-owner 36.2.3 No Violation of Law
residents. Advocate or support any action or activity that
36.1.6 No Disclosure violates a law or regulatory requirement.
Disclose personal or professional relationships 36.2.4 No Personal Gain
with any company or individual who has or is
seeking to have a business relationship with the Use their positions or decision-making authority
association. for personal gain or to seek advantage over an-
other owner or non-owner resident.
36.1.7 Open Fair Elections
36.2.5 No Misuse of funds
Conduct open, fair and well-publicized elections.
36.1.8 speak in one voice Spend unauthorized association funds for their
own personal use or benefit.
Always speak with one voice, supporting all duly
36.2.6 No Gifts
adopted board decisions even if the board mem-
ber was in the minority regarding actions that Accept any gifts directly or indirectly from own-
may not have obtained unanimous consent. ers, residents, contractors or suppliers.
48 Byelaws LSM
36.2.7 No Misrepresentation of Facts 36.2.10 No Harassment
Misrepresent known facts in any issue involving Harass, threaten or attempt through any means
association business. to control or instill fear in any board member,
owner, resident, employee or contractor.
36.2.8 Protection of Privacy
Divulge personal information about any associ- 36.2.11 Confidentiality of Executive Ses-
ation owner, resident or employee that was ob- sion
tained in the performance of board duties.
36.2.9 No Personal Attacks Reveal to any owner, resident or other third
party the discussions, decisions and comments
Make personal attacks on colleagues, staff or res- made at any meeting of the board properly
idents. closed or held in executive session.
**********************************
NOVEMBER 2021
HSM HOA
MAINTENANCE COOPERATIVE
LTD
BYE LAWS
DRAFT FOR
REVIEW
&
APPROVAL
Our actions and decisions today will shape
the way we will be living in the future.
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