We are under internal discussions on whether to form an RWA/association as the project is still not completed. This property is currently being maintained by the builder and the quality of upkeep is poor. We would prefer if this is managed internally by the residents but have a lot of clarifications on the liability. 1. If the construction of the project is in progress is it advisable to create rwa /association? 2. What happens to any issues, or mishaps that may happen in the process? How does an association safeguard itself from ongoing construction issues? 3. If the adjacent block gets affected (eg gets cracked due to drilling in Rocky bed for foundation), who will be held accountable? 4. In case of thefts, which may happen due to labor movement, who will be responsible? 5. If any accidents take place due to ongoing construction, who should be held accountable 6. How will Rwa share the cost with the builder for the construction-related work in adjacent blocks? Say common electricity charges 7. Also there are constructions that were not formally in the plan. eg temple, which the builder says he will get corrected in the final OC. If any issue arises, how will that be handled? 8. How will the builder ensure proper handover of the assets to the association? Will there be a legal document that will be in place which will be accepted by the association after a proper audit has been done? 9. Will there be any liability on the association if it forms the RWA with the intent of starting with the basic maintenance of the society which will include Housekeeping, Security, and green cover? We intend to take a complete handover once the project deliverables are completed to the satisfaction of the owners.
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It is not advisable to form association until construction is completed and OC is received of building
2) builder is bound to form cooperative housing society or condominium as per registered same deed executed with flat owners
3) builder is responsible for any mishaps ,damage to adjacent buildings ,thefts that may take place
4) housekeeping ,security is builder responsibility Tull construction is completed
1. It is not advisable to form the RWA before the entire project is completed.
2. It is the builder who is responsible for the mishaps at this stage.
3. 4. 5 Builder.
6. Why should RWA share the electricity charges if the builder is in charge of the maintenance, he will collect monthly maintenance.
7. The builder is responsible for the illegal construction and consequences thereof.
8 The builder has to handover the premises along with all appurtenances and the documents pertaining to building, common areas etc to the association.
9. You wait for the completion of the construction of entire project, let the builder obtain OC after that the association can take over the building from the builder
1. There is no legal bar in forming an association. In fact, it will ensure a smooth takeover of the common amenities from the promoter later.
2. The association shall in no way be responsible for the construction activities of the builder.
3., 4., and 5. The builder, without any doubt.
6. The association need not do so. It shall be solely to the builder's account.
7. Insisting on construction of an inhouse temple is not a good idea, especially when persons of many faiths live in such residential complexes.
8. Yes, the builder has to execute a deed in favour of the association handing over the common assets.
9. Yes, you may do so.
We have 11 buildings in the society out of which 10 are functional. The last block is yet to come up and might take around 2-3 years. We have received partial OC. As mentioned earlier, the quality of maintenance is poor and we are unable to push the builder to improve. The builder wants the owners to start paying maintenance. We as a whole are unable to decide on this and there are voices in favor and against it. Having the builder own the maintenance for another 2 years would prove very difficult for the residents. Hence one suggestion was: 1. To create an escrow account and have the maintenance from all sold flats deposited there on a monthly basis. The builder needs to deposit his share from the unsold inventory. 2. Form a governing body (members from the owner's group) to monitor the account and take appropriate decisions 3. Unless the contractual obligations are fulfilled, money cannot be withdrawn from the account. 4. The escrow account can be managed by a 3rd party. Would this work if we want to maintain the apartment complex? Or would this lead to any complexities while dealing with the builder?
You should issue legal notice to builder to form cooperative housing society of flat owners of buildings for which OC has been issued
2) builder should furnish audited accounts and hand over management to society
3) in the first meeting managing committee should be elected to manage affairs of society
4) there should be separate society for each building
5) open bank account in name of society
6) as far as suggestion received regarding opening of escrow account t for collecting funds from sold flats abd unsold flats is concerned it is not practical as builder would not pay for unsold flats ,flat owners may default as there is no registered housing society formed of the flat owners
Until the construction is completed, and the Occupation Certificate (OC) is obtained for the building, it is not recommended to form an association. As per the registered deed executed with the flat owners, the builder is obligated to establish either a cooperative housing society or condominium. During the construction phase, the builder bears the responsibility for any mishaps, damages to adjacent buildings, or thefts that may occur. Additionally, the builder is accountable for providing housekeeping and security services until the construction is entirely finished.
You should send a legal notice to the builder, urging them to form a cooperative housing society for the buildings where the Occupation Certificate (OC) has been issued. The builder should also provide audited accounts and hand over the management to the society. In the first meeting, a managing committee should be elected to oversee the society's affairs, and each building should have a separate society. Additionally, the society should open a bank account in its name. While there was a suggestion to open an escrow account for collecting funds from sold and unsold flats, it may not be practical as the builder may not contribute for unsold flats, and there's no registered housing society formed yet for the flat owners.
1. For any collective action a legal entity is necessary, which is your case is an association. Once formed, you can open an escrow account with a bank, deposit and manage funds.
2. Again, if an association is formed, the executive/managing committee can be entrusted with this responsibility.
3. See answer to Q 2.
4. No need for any third party role here. The authorised signatories of the association will do the job.
you can form association before completion of project and OC .
You can form association each for each building separately also.
Actually the builder is the one who has to initiate the process for formation of association.
The concept of opening of escrow account and that the members subscription to be deposited in it is not practical in the long run, you cannot run behind the members who do not pay regularly besides it is not binding on them, therefore it is always safe to form an association and collect the maintenance amount.
Once the association is formed for those buildings having OC, the builder can be demanded to handover all the documents of those particular buildings including the accounts of all the funds collected in respect of the said buildings.
Dear Client,
It is not advisable to form an association until the construction is completed and the Occupancy Certificate (OC) is received for the building. The builder is obligated to form a cooperative housing society or condominium as per the registered deed executed with the flat owners. The builder is responsible for any mishaps, damages to adjacent buildings, or thefts that may occur during the construction process.
Until the construction is completed, the builder is responsible for housekeeping and security. However, once the construction is finished and the OC is obtained, it is recommended to issue a legal notice to the builder to form a cooperative housing society consisting of the flat owners of the buildings for which the OC has been issued.
In this process, the builder should furnish audited accounts and hand over the management to the society. In the first meeting of the society, a managing committee should be elected to oversee the affairs of the society. It is important to have a separate society for each building. Additionally, it is advisable to open a bank account in the name of the society to handle financial transactions.
Regarding the suggestion to open an escrow account for collecting funds from sold and unsold flats, it may not be practical as the builder would not be responsible for the unsold flats. Furthermore, without a registered housing society formed by the flat owners, there is a risk of default from the flat owners, making the escrow account arrangement difficult to implement.
Therefore, it is crucial to follow the proper legal procedures, issue the necessary notices, and form a registered cooperative housing society before implementing financial arrangements like an escrow account.
You can make the association but only can discuss issues related to your association. It will not have any control over the builder actions
