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Handover from builder and Corpus fund for Apartment maintenance

Comments(43) Sub Category:Legal,Owners Association,Property Buying Posted On: Feb 05, 2010

The apartment owners association plays vital role in maintaining apartment and its amenities. But before the formation of apartment owners association, it is duty of builder to maintain the apartment and its amenities. Most developers provide a corpus fund for maintenance of apartment and its amenities. The builder collects maintenance fund from each buyer which will not be shown in basic sales price of an apartment. The maintenance fund collected from each apartment owners is deposited as corpus fund.

Corpus Fund for apartment maintenance

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Corpus fund is also known as maintenance fund. The term “Corpus” literally means main part or organ of body. It is also known as capital of organization. Normally corpus fund or maintenance fund denotes a permanent fund kept for the basic expenditure needed for survival of organization. Corpus fund is generally not allowed to be utilized for the attainment of the purpose but interest or dividend on such fund can be utilized.

An amount of say for example Rs 1.5 lakhs for 2 years will be collected from each Apartment buyer as Building Corpus Fund and the interest earned on this Fund will be utilized for payments to the Facilities Management company. Many mid size builders collect fund to manage the maintenance fund till the society is formed. The Builder shall transfer the corpus fund to the Association after its formation.

Handover from builder

The builder completes project within 24 moths or 2 yrs from the date of booking or allotment of apartment. The buyer pays the apartment price in installment depending on the progress of project. When the contractual obligations of the builder have been completed, buyer will receive a notice of completion and a final payment claim. In case possession of the flat is not offered to the Buyer within a period, the Buyer shall be entitled to receive compensation. In case the Buyer fails to clear his account and take possession of the apartment, the Buyer shall be liable to pay holding charges.

Before handover of the flat, builder has to get completion certificate and No objection certificate from concerned department. The certificate is issued by the municipality only if the project complies with the approved plan. A completion certificate is necessary to register your house, get utility connections and even resell the flat. However, while handing over the possession of the apartment, complete list of fitting & fixture shall be handed over to the Buyer. Once payment has been made the builder will give the client possession together with keys and warranties.

Documents required for handover from builder

Following are important list of documents required for handover from builder to Apartment Owners Association

  • Copy of Building plan and approval plan
  • NOC from pollution board, electricity, water and fire department
  • Completion certificate
  • Proof of approved floor plans
  • Transfer utility connection (electricity, water connection from builder to apartment owners association)
  • Handover of Office room, departmental stores, function hall etc. to the association.
  • Handover of original registration documents, parental documents, drawings, CMDA/BBMP or concerned authority approvals etc. to the association.

Apartment owners association

The maintenance will be carried out by the Builders till the formation of Apartment Owners Association. Apartment owner’s association is voluntary association of apartment owners residing in apartment. All the owners of apartment complex are members of the association forming general body. General body elects members by and from general body as Management committee. Management committee represents association before all official and non-official bodies concerning building and other member’s rights and interests.

In many cases, builder keeps all income generating areas with themselves though the flat owners have paid for these areas. The builder has to handover the corpus fund and all common facilities to apartment owners association. The Act gives apartment owners alone the right to generate income from common areas and facilities in apartment. After formation of RWA or apartment owners association, builder has to handover maintenance fund or corpus fund to apartment owners association. Please contribute your knowledge of handling corpus fund at your apartment.

 

43 Responses to “Handover from builder and Corpus fund for Apartment maintenance”

  1. Aditya says:

    What action we can take if Builder has not given accounts for the funds colleced as part of maintenance advance?
    Builder has also not given any accounts for the funds collected.

  2. Dattaram Sharma. says:

    Already the builders have delayed more than 18months for handing over the apartment.What we should do now?

    • abhilasha says:

      Dear Dattaram Sharma,

      In case possession of the flat is not offered to the Buyer within a period, the Buyer shall be entitled to receive compensation.

      • Satindra Bhatia says:

        Adarsh Esplanade apartment was delivered about 18 months late; and seeking compensation for the delay is a task; as the builder’s office does not respond to questions, and make you run from one day to another and cite natural circumstances, like excessive rains, non-availablility of construction materials, and unexpected revision of govt rules and taxes, etc. It ultimately boils down to filing legal suits, with their associated hassles and expense on an individual basis. Should the HomeOwners Associaition, when formed, not take up this issue with the builder on behalf of effected apartment owners? The same applies to the various documents that ought to have been handed over, but have not been so done.

  3. at the time of booking of flats the told all faclities will be provide very soon like club house , swaning pool, etc but till no deploupment. no good maintence in building .

  4. Kumar says:

    Any discrepancies relating to money matters not fulfilled by the Builder like rendering accounts for maintenance fund collected, corpus money etc, will tantamount to misappropriation and the best route is to make a criminal complaint. Civil complaint for recovery of money from a builder is something next to impossible. Next is to post blogs on all websites about the affairs of the builder in your complex so that the builder gives some attention to solving such matters.

  5. Ramesh Dave says:

    I must appreciate for giving such type of information to the owners of flats and asociations. Most of the people knows tha th printed agreement signed by the owners and builders is the final and no such changes can be made and its as per the legal ways. Pl note that no single builders are preparing the agreement as per the MOFA ACT. so all the agreements are nul and void. Therefore this type of forum or associations’ moral duties to provide awareness of such type of games play by the builders. I m not blaiming all the builders but only fews are there which we can count by the fingers are good and and they believe to provide good ameneties and good construction. People should come forward and so some works for our members . Once again thanks to common floor to provide such type fof qwreness.

  6. Sundar says:

    Our builder has collected corpus fund from few buyers and has not mentioned it in any document. When asked he says its not collected as a separate amount and its used for ameneties in the building. Since the corpus fund is not there in any agreement, can we claim for it?

    • Rakesh HP says:

      Dear Sir,

      Builders usually collects corpus fund for the maintenance of apartment and its amenities until an apartment owners association is formed. After formation of apartment owners association, it is duty of builder to handover the documents and corpus fund to association. Corpus fund collected will not be shown in agreement or sales price of your flat. you cannot claim corpus fund from your builder individually but once apartment owners association is formed for your apartment, association can claim for the same to handover from builder.

    • Nagendra AS says:

      Dear Mr. Sundar,

      Once the Association formed with the consent of the Builder, subsequently your association can ask for the title related documetns to handover to association formerly and maintanance also been transferred to the Association in th same time after the completion of the all works in the premises as agreed upon

      Feel free to call or mail us. if there is any clarifications required

      Regards,

      Nagendra AS
      Advocate
      9164001353
      nag1250@gmail.com

      • Satindra Bhatia says:

        1. A Lump sum Maintainence charge was collected by builder prior to handing over of apartment, and is stated to form the basis of the “Corpus”. Initial maintce expenses are likely to be made by builder from this corpus fund (as sufficient interest may not have accrued as yet), but later as a An Apartment Owners association is formed, the builder is to hand over all balances in the fund to the Association. This point is clearly stated in the Sale Agreement. Individual Owners do not need to demand this fund or its accounts. Only the Association could do that.
        2. To my knowledge Adarsh Developers have not handed over any of the Official documents like Approval of the Building Plans, NOC from Electricity, Pollution control etc deptts. Nor is there any information about the Registration of the Flats and Payments of Property Taxes if applicable.
        I would welcome information from actual residents on the items at para 2 above. And about the number of actual current residents, and when can an association be formed?

      • Girish says:

        As I have purchased an apartment its almost 2 years now and I was waiting for Builder to finish his works and collect his final settlement money biut builder was in strong argument to settle money first and take the handover .

        According to his wish I have paid the money and delay interest after several calculations and all I have given a cheque but even after the handover still lot of work Builder needs to do like .

        1.Roof leakage
        2.Door not closing properly
        3.Most Important thing is still builder is doing neighbors inside and outside work which in turn makes lot of disturbance to the guys who ant to stay in the apartment what will be the best solution to handle this kind of situations .

        Can you pls help me on this issues .

  7. kuldeep says:

    We at Ahlcon Apartment Resident Welfare Association (AARWA) facing the same problem as faced by Aditya in that”

    1. What action we can take if Builder has not given accounts for the funds colleced as part of maintenance advance?

    2. Builder has also not given any accounts for the funds collected.

    3. Building condition is very bad and there pillars (2 no.s) are badly damaged due to non-maintenance of buidling, and few accidents have also reported due to poor material used in the building.

    What we (Association) can do for the above queries. ????

    Kuldeep Kr Singh
    General Secretary – AARWA

    • Nagendra AS says:

      Dear Mr. Kuldeep,

      Firstly If you’re paid maintanance charges as advance means there your not able to get the details from the Builder and he was not bound to give the details in case if your paid as deposit along with the supporting Agreement ( Maintainence Agreement) then you can able to get the money

      In case your apartment complex damaged within 12 months you can file case against the builder on behalf of the Association in the Consumer Court for seeking the repairs for the same and compensation for the same

      Feel free to call or mail us. if there is any clarifications required

      Regards,

      Nagendra AS
      Advocate
      9164001353
      nag1250@gmail.com

  8. Caesar Pereira says:

    The Builder received the OC of the building in May 2009. He collected 6 months advance maintenance from all owners from 1st July to 31st Dec. He has not kept any corpus fund or left any money. He has submitted accounts for the said period. Now he refuses to maintain the society nor is he handing over the society to the owners, Bills are mounting and we are in a danger of our electric supply and water supply being cut off.

    WHAT DO WE DO IN SUCH CIRCUMSTANCES ?

    • Nagendra AS says:

      Dear Caesar,

      Do you have anything in writing from the builder saying that He will maintain for six months, let us know about the fact briefly so that we can advice in a better way

      Feel free to call or mail us. if there is any clarifications required

      Regards,

      Nagendra AS
      Advocate
      9164001353
      nag1250@gmail.com

  9. prashant says:

    As there are 280 flats in our apartment, how many members shall be there in the management committee and what all posts shall be there?

  10. Debjani Dutta says:

    Is anybody a part of the MetroCorp “Nirvana” project, we booked in Oct 2006 and still the project is far from being completed. Any information from any of the home owners will be appreiated as we are not in a position to communicate or go and visit the site for ourself.

    • Rahul says:

      Debjani,

      you can join the following yahoo group ortem_proc_leela. There are a bunch of other people in the same boat.

      • San says:

        Hi,
        Just noticed about metrocorp. I too have a unit in Phase 1… stuck for long time. can you pls. link me in to the group.
        thanks
        Sanjeev

  11. Arvaindh J says:

    Can someone please reply to my queries.

    1. Is there a policy on the compensation.. Like min amount per square ft. or max amount per square feet..
    2. How long can the builder keep giving compensation.
    3. The compensation our builder has mentioned in the contract does not carry a period until it is valid.. Should this contract be considered void. Otherwise it is possible that he continues just with compensation for a longer period.

  12. Gopinathan Unni A.K says:

    Pls let me know…

    1. Will the builders (ROHAN BUILERS) ever hand over the complex to the association ever and if so when?
    2. If no sign of this, it is about time we take it up with the authorities. They are going ahead and building more complexes and fooling the public. At least let us do a service to the public by advertising in the newspapers about the incompetency of the builders. On this subject give a notice to Rohan Buliders.
    3. What is happening to the Khata Transfer? Last time when I talked to one of the committee members he advised me to go slow on that since the ad-hoc committee is working on that.
    4. Pls let me know when will the owners have to start paying the Maint. Charges and approx. how much it will be. Since I have let out my flat, I need to know how much I should collect from my tenant ot adjust the rent accordingly so that the tenant pays the maint. charges directly to the association.
    5. It is about time these issues are sorted out at the earliest.

    Rgds.. Gopinathan Unni, Owner of E-10-01, Rohan Vasanta

  13. thameem says:

    We have formed a residential society as builder was not inetrested in the same. we got teh society registered. its almost 4 years and builder hasnt handed over any documents to association. Now we want to give the terrace space for advertising. do we need to contact builder for the same ? As per our sale agrrement terrace will be under ownerhsip of builder & land owner. Can he come and claim for the revenue which society is getting? please let us know.

  14. Indra Mohan Jha says:

    I am located at Balasore, Orissa. Balasore is a district head quarter town. I have bought an apartment constructed by a builder. The building is having four floors excluding Ground Floor which is sold as parking place. the building has been provided with a lift which does not have any BIS marking (it appears) or standard. No fire safety plan has been incorporated in the building. There is no road constructed around the building for movement of fire tenders in emergency. Fire Hydrants are also not in place. Till date no official power supply has been provided to the building as transformer and switch room is not in place. There does seem to be any power back up plan in place. The sanitation of the building is a real cocern, as proper drainage sewarage system has not been created. The builder appears to have hand in gloves with the local civic authorities.
    I have bought one of the apartment at fourth floor(top floor) under lucarative promishes of the builder. Now it is observed that material ans fitting of the building are also substandard. Please avice what to do? and whome to report my grievances.

    • Ahindra says:

      dear mr Jha
      It appears that you are not satisfied with the construction and the amenities provided by the builder.Pl. let me know at what price you have purchased this flat? Are you living in the same flat?If so,since when? How many people are already living in the building?Since i am also badly looking for purchasing a flat in balasore.Pl. let me know if you are interested to sell your flat. I would like to see the flat personally to finalise the deal with you.If you sell the flat to me I can handle the builder and fix up the problem with my influance.

      Thank you
      Ahindra

  15. K.R.Chandrashekar says:

    I want to know what all the documents a apartment owner should get from builder. Also I want know what all the documents the owners association should get from builder.

  16. NCL Homes Pvt. Ltd – builder based at Hyderabad has constructed 341 flats in NCL LB Godavari. The project started in 2003 and completed in 2010. The builder has collected around 50 lacs towards corpus fund and was also collecting common maintenance fees till March 2010. The corpus fund was used for the company investments in the project, but has not deposited in any bank account as fixed deposits. The maintenance accounts or audited accounts were never published till now.

    Please advice on what legal action can be taken on the builder.

  17. Anjali Ranade says:

    If the builder has conveyed the building to all flat owners and then builder wants to construct more as TDR is available. In such a case are the flat owners eligible for some compensation? If the builder is ready to contribute Corpus fund for the proposed association of flat holders, what does it mean?

    Thank you
    Anjali

  18. Kirit19_57 says:

    as a flat owner to receive Corpus fund against redevlopment is it  taxable ? 

  19. rajesh says:

    we are going to take over the appartment from the builder this month end…. he had earlier taken 50/ sq ft. as sinking fund from all the residents…our sale deed is silent on interest part…
    Now the builder is ready to give us the sf but is refusing to give the interest accrued there on…. whats the legal standing of his refusal…?

  20. sangita chatterjee says:

    i have paid the amount of 25000/-as maintenance,co has given me the handover , and i am staying there ,now hoe could i pay my proportionate electrical charge which i am using from common meter of the company/

  21. sachin says:

    Hi sir pls reply meurg ,our builder is handovering the society to us.. We have 360 flats pls advice, what documents we should demand frm him? Also, he has taken 2yrs maintence in advance..pls guide me …thr is a 5 wing in our society and builder already registerd the society in 2 parts is this good or bad….?

  22. Sachin says:

    Hi,
    My Builder has given a possession 3yrs back but still he has not made sale dead and not transferred the society to the peoples who are living in the buildings. Could you please let me know how we can stress the builder for sales dead and society transfer?

    Thank you.

  23. Manasi says:

    We bought a resale flat in a fully formed society. At the time of purchase, the owner told us that she has paid some amount to the builder which she is suppose to get back through society. She is giving up that money and had asked us to bear all the transfer charges in return. From the letter to the builder, the amount previous owner paid has following charges: water and electric supply connection charges, formation and incorporation of the corporate body, formation and incorporation of the apex body, purchase of shears of the corporate body, legal charges, consultancy charges for finalization of rate able/other values of the said land, deposit for provisional outgoings for yr paid in advance, corpus fund for the complex and the apex body. Can anybody tel me which of the charges mentioned above is refundable?

  24. utsav says:

    our builder is now demanding service tax on maintenance fund / depsoit taken at the time of hand over of flat on the pretext that in maintenance agareemnt it is written that if due to any unforseen reason , builder is required to incurr additional capital expenditure after possestion of unit ,to give maintenace service continusly , like for purchase of DG Sets , cleaning equipment , lifts ( as these are to replace due to sudden failure or life is over ) and this cost has to be incurred as surplus from maintenace activity is not sufficent to meet these huge capital expenses at a time .As per them fund is not in true sence refundable and can be appropriate for this expenses as well if any resident do not pay maintenance bill , then this fund can also be adjusted to that extent

    pl clarify whether service tax @ 10.30 % on maintenace fund can be demanded leaglly even though builder is also paying interest @ 8 % on such deposit annually .

    pl clarify with legal provision to fight

  25. yogesh pandya says:

    Dear Sir, i want to know from last 10 years we are running Ad-hoc Society we approached to builder , we all members several time visit to his office for formation of the Society but nothing is happen as on today so what to do last he has given one advocate address there also we went 2 to 3 times he is very busy & for small society 11 members he is not willing to do work kindly advice us if shop’s owner sell their shop then Builder NOC required? flat owners sell flat so NOC from builders required?

  26. rahul says:

    Already the builders have delayed more than 18months for handing over the apartment.What we should do now?

  27. Puja says:

    A Crap country having crap rules….
    —–No universal law for builder, owner, tenant————-

  28. Jith says:

    Hi,

    The builder ahnded over the apartment to the owners in Feb 2010 and handed over to association in Feb 2011 and handed over some corpus fund in Aug 2011. Builder has collected Rs.25,000/- from each owner as Corpus fund – Rs. 15,00,000 (60*25,000).
    They have delayed the project by 12 months and did not provide water connection, rainwater harvesting (which is mandatory as per Kerala Govt building rule 2004 chapter XVIA) and ground water also not provided.
    We are depending upon the tanker water supply and a huge amount of money already spent for water purchase.
    1. When we asked builder about this he replied – Ground water is not possible as water is consumable due to heavy metal content like Iron and all. But builder did not inform us while buying the aprtment.
    2. Delay in Kerala Water Authority water connection – They did not submit thet application in time and in between rule got changed and hence a new line should be taken form the main pumping like not from the piple line whihc is already there near to the apartment. The cost for the new line we have to bear. If they could have submit the appilcation in time the situation should have not been like this. Builder forced us and we paid extra 1.5L in addition to the 4.8L that we have already paid at the time buying the apartment.
    3. We asked builder to refund all the amount that paid for purchasing water and electricity as they delayed the project and also not provided ground water and rain water harvesting. Theya re not agreeing to this.
    4. There are lots of defects in the aprtment like leakage, tile alignement issues etc. Still not rectified even after 2 years also.

    What should we do now? Shall we approach Consumer court and also file a criminal case against builder for cheating us? Please advice.

    Thanks,
    Jai

  29. Shelly says:

    Hi. I have following queries:
    1. Is the builder rightful in asking for maintainence charges before he has obtained completion certificate.
    2. Can the flat owners forced to get registry done before the project is complete.
    3. How about the flats being handed over and common facilites promised not made available. How can one get compensated for the same.

  30. Dear Friend,
    I want to get the answers of following questions.
    1.How will a purchaser of a flat conferred the title of the land and attached building.
    2.After getting the individual sale deed, whether a separate conveyance deed will be given to the flat owners or their co-operative society.
    3.By which document the title of the land & attached flats of building will go to the hands of the purchser.
    4.Are sale deed and conveyance deed are two separate documents ,if so their difference.
    5. In re-sale /2nd purchase of a flat what are the title documents required to be asked from the 2nd seller.
    6-How vital a conveyance deed is in case of apartment sale/ purchase ?Without this can mortgage be created in case of 2nd sale.

  31. moosa says:

    Hi i was purchased a flat at panvel in maharashtra i have paid 30% amount by cash or chq & Balamce amount by Bank loan now builder asked for development charges and maintainance charges pls give some prpper way to aske builder about above problems

  32. Srinivas says:

    Ours is a new apartment of 40 flats and about to take hand over from the builder. We already registered our association and We don’t have any earnings apart from the owners contribution for maintenance. For handover (both fund & amenities) the builder is asking to provide PAN and TAN of the association. Is it really required to have a PAN and TAN for getting the funds transferred? Without this he cant handover? Also for running the association, PAN and TAN are required?

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