The association of apartment owners will naturally have a key role to play in maintenance of the property post handover from the developer. This is where the creation of a corpus fund is really important.
Wondering about a corpus fund for apartment maintenance ? While the owners’ association will have the leading role in keep apartment complexes well-maintained along with taking care of amenities, prior to the establishment of the same, the real estate developer/builder is supposed to take responsibility for maintenance. Most realty players offer these funds for maintaining all amenities and apartment units. A fund for maintenance is collected from every buyer and this will not be displayed in the sales price for an apartment. The fund that is collected from every home owner will then be deposited into this corpus fund.
You should keep in mind that corpus equates to the key organ/part of the human body or the capital of any entity/organization. This fund indicates a permanently established fund for maintaining real estate projects and covering all necessary expenses for the same. Suppose Rs. 1 lakh is collected from every home buyer in the residential complex for a period of two years for the corpus fund. The interest that is earned by this fund will be tapped for paying the company that takes care of facility management. Several developers collect these funds for covering maintenance until the formation of the housing society. Post this, the fund will be transferred by the developer to the society/association.
Handovers from real estate developers
Apart from the corpus fund, you should also make a point of the handovers of real estate projects from developers. Developers will finish the project within the stipulated number of months and years from the booking/allotment date of the apartment unit in question. In this period, homebuyers will be paying the prices of their units in installments on the basis of how the project is progressing. Upon completion of the builder’s contractual responsibilities, buyers will get the final payment and completion notice. Buyers will be getting compensation in case possession is not given within the stipulated time period given by the builder previously.
If the homebuyer cannot clear the final payment and receive possession, he/she will have the liability to shell out holding costs/charges. Prior to the handover of the project, developers are required to obtain the NOC (no objection certificate) and completion certificate from authorities. The municipal authorities will only issue the clearance if the project adheres to the plans that have been approved previously. The certificate of completion is mandatory for getting the housing units registered along with obtaining connections for water, power, etc. and also for resale of apartment units. During handover of the unit by the builder, the buyer should get the full list of fixtures and fittings along with warranties and keys.
There are several documents which are needed for the handover procedure by the builder which you should keep in mind prior to learning about the corpus fund. These documents include the following:
- NOC from electricity, fire and water departments and from pollution control board
- Building and approval plan copy
- Approved floor plan proof
- Certificate of completion
- Utility connection transfer to apartment owners’ association from developer
- Handover of departmental stores/office rooms/banquet halls and other amenities to association
- Handover of original documents of registration, drawings, parental documents, approvals from statutory bodies and other papers to the association
Association of apartment owners- Key things worth knowing
Coming back to the corpus fund for maintenance, it is vital to say that the developers will only collect money for the same and use it for various tasks until handover and establishment of the association. The formation of the owners’ association of apartments is a vital process. This is a voluntary organization of owners who live in the residential society/complex in question. All owners will be members of the body by default. The general body of the association will be electing members from within itself for setting up a committee for management. This committee will be the association’s representative before all the non-official and official authorities/bodies related to the buildings and interests and rights of the members.
In some projects, developers retain areas that generate income solely with themselves although owners of apartments have already forked out payments for the same. Developers should handover the specific corpus fund and other common amenities to the association of apartment owners. The owners of the apartments have the sole right to generate income from any of their common amenities and areas within the project. After the establishment of the association or residents’ welfare association (RWA), the developer should be handing over the corpus fund or maintenance fund accordingly. Buyers should make sure that this is done within the stipulated time period.
