Is it correct to collect welfare fund contribution by an apartment association, when somebody is selling a flat?

Babji Yana's answer at Quora on 14th June 2019

Some Associations collect welfare fund from the buyers at each and every transfer of plot or flat by sale deed. No complaint - No issue, but it is illegal to collect welfare fund per force. Such of the Associations that have not been registered and do not have elected managing committees have no right to collect any fund or subscriptions. They can be challenged.

RWAs (Residents Welfare Associations) and AOAs (Apartment Owners Associations) are bodies that represent interests of people living in a community or a society or an apartment. These associations are responsible for managing day-to-day problems of the residents, managing facilities in the colony / apartments and complexes, ensuring a safe and secure environment for the members and also safeguarding the rights of the unit holders.

These RWAs and AOAs are regulated by several Central and State Laws. These are legal entities, can sue and can be sued. They have to be registered with the authority concerned. They shall be convening Annual General Meetings regularly. They shall have elected Managing Committees to manage day to day affairs. They shall be filing annual returns to the authorities. They shall be maintaining proper accounts for all the amounts collected from the members.

Only then, such RWAs and AOAs can collect a one time welfare fund when such Associations are newly formed. This is towards a corpus fund to meet any unforeseen expenditure other than routine monthly maintenance of premises.