The apartment owners association plays a vital role in maintaining the apartment and its amenities. But before the formation of apartment owners association, it is the duty of the builder to maintain the apartment and its amenities. Most developers provide a corpus fund for the maintenance of the 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 owner is deposited as a 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 the body. It is also known as the capital of the organization. Normally corpus fund or maintenance fund denotes a permanent fund kept for the basic expenditure needed for the survival of the 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.
For example, an amount of say 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 funds to manage the maintenance fund till the society is formed. The Builder shall transfer the corpus fund to the Association after its formation.
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 the project within 24 moths or 2 yrs from the date of booking or allotment of apartment. The buyer pays the apartment price in installments depending on the progress of the project. When the contractual obligations of the builder have been completed, the 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 the period specified by the builder, 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, the builder has to get a completion certificate and No objection certificate from the 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, the complete list of fittings & fixtures shall be handed over to the buyer. Once the payment has been made, the builder will give the client possession together with the keys and warranties.
Documents required for handover from builder
Following are a list of important documents required for handover from the builder to the Apartment Owners Association
- Copy of the Building plan and approval plan
- NOC from the pollution board, electricity, water and fire department
- Completion certificate
- Proof of approved floor plans
- Transfer of 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 the Apartment Owners Association. Apartment owners association is a voluntary association of apartment owners residing in the apartment. All the owners of the apartment complex are members of the association forming general body. General body elects members by and from the general body as the Management committee. Management committee represents the association before all official and non-official bodies concerning the building and other member’s rights and interests.
In many cases, the builder keeps all income generating areas with them though the flat owners have paid for these areas. The builder has to handover the corpus fund and all common facilities to the apartment owners association. The Act gives apartment owners alone the right to generate income from common areas and facilities in the apartment. After the formation of the RWA or apartment owners association, the builder has to handover the maintenance fund or corpus fund to the apartment owners association. Please contribute your knowledge of handling corpus fund at your apartment.
