Torbit Regulation Monitor - What DPDP Act Changes For RWAs And Housing Societies

As India’s Digital Personal Data Protection (DPDP) Act comes into effect, housing societies and Resident Welfare Associations (RWAs) are now legally recognised as custodians of residents’ digital personal data. With this shift, residents are now asking some basic questions: "Am I giving my data to the community app? Or to the association? And who is actually responsible for how my data is used?" To understand these concepts clearly, let’s get some basics straight first.

Why Housing Society Apps Are Not Like Consumer Apps

The confusion around responsibility of data does not arise with consumer apps like Google, Facebook, YouTube, or Spotify. In those cases, the relationship is direct and obvious. Individuals choose to download the app, create an account, and give their data directly to the platform. The platform decides why the data is collected and how it is used. The platform is the data fiduciary.

On the other hand, housing societies work very differently. A resident does not independently choose a community management app in the way they choose a music or social media app. The app is selected by the Management Committee, and residents are required to use it because it is the official system adopted by the society. If the society were using a different platform, residents would have to use that instead.

The Workplace Analogy: Understanding Who Controls the Data

A closer analogy is the workplace. When a company uses an internal system such as Zoho, employees download and use that application because the company has chosen it. Even though employees log in individually, the company decides why employee data is collected and how it is used. The company is the data fiduciary; the software provider is the data processor. Under the DPDP Act, housing societies are treated in the same way.

The Management Committee or RWA is the Data Fiduciary—the entity that determines the purpose and means of processing residents’ personal data. The community management platform functions as a Data Processor, processing data strictly on the instructions of the RWA. The app itself does not independently decide how resident data should be used.

As the Management Committee (Data Fiduciary), personal data may be collected and used only for purposes that are lawful, clearly defined, and directly connected to the role of the Data Fiduciary. In a housing society, these purposes are limited to what is necessary to govern, maintain, and operate the community—such as statutory communication, billing, visitor notifications, complaints handling, and regulatory compliance. As long as resident data is used strictly for these legitimate society purposes, additional consent is not required each time the data is processed.

When Explicit Individual Consent Becomes Mandatory

The moment data is proposed to be used beyond these purposes, the legal position changes. If resident data is used for advertisements, promotions, or any activity that is not intrinsic to the functioning of the RWA, explicit individual consent becomes mandatory. This consent must be informed, purpose-specific, and obtained directly from each resident. It cannot be implied, bundled into general terms, or assumed as a condition for accessing essential society services.

Why General Body Approvals Do Not Replace Consent

Before the DPDP Act came into effect, some housing societies approved advertising or promotional use of resident data through community apps, through general body meetings or extraordinary general meetings, often with limited attendance and a simple show of hands. Under the DPDP Act, such approvals are not a substitute for individual consent. Each resident is a data principal with an independent right to decide whether their personal data can be used for non-essential purposes. Majority approval does not override individual consent.

Why “Pay-to-Opt-Out” Models Fail the DPDP Consent Test

Another practice that fails the DPDP consent test is the "pay-to-opt-out" model. Consent under the DPDP Act must be freely given and freely drawn. If consent for advertising is implicit or hidden, while opting out requires payment or additional steps, that consent cannot be considered voluntary. Withdrawing consent must be as easy as giving it—without financial penalty.

What DPDP Compliance is Actually Required from RWAs

For Management Committees, the implication is clear. DPDP compliance is not about adopting new regulatory buzzwords or infrastructure. It is about being able to demonstrate, at any point, why resident data was used, for what purpose, and whether explicit individual consent existed for any use beyond legitimate society operations.

With the DPDP Act prescribing penalties that can go up to ₹250 crore, the Indian government has made its intent unambiguous: protection of digital personal data is now a serious regulatory priority. For housing societies, this marks an important shift. Practices that were earlier tolerated, such as pushing promotional content to residents without clear, individual consent, will now be examined through a much stricter lens. The law is already in effect, and residents have the right to raise complaints if they believe their data has been misused.

In such cases, accountability rests primarily with the Management Committee as the Data Fiduciary. Going forward, RWAs would do well to proactively demand from their community platforms a clear framework for explicit, informed, individual consent for any advertising or promotional use of resident data—ensuring that such content reaches only those residents who have chosen to opt in, and that withdrawing consent is as simple and penalty-free as giving it. This shift is very important in aligning everyday community governance with the standards of transparency and trust that the DPDP Act now expects.

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