Shyamal Banerjee/Mint
Shyamal Banerjee/Mint

The post-possession trauma

Seeking complete clarity and documentary proof on all critical matters should not be compromised

If you thought that all the pain and strain of buying a house ceases once you receive possession of your apartment, you may want to think again. You drew a checklist to select the right project, the location and social infrastructure in the vicinity, amenities (both internal and external), and the paperwork at the time of purchase, the registration and handover of your apartment. Well, now there’s another checklist you need to refer to after you have moved in to your new home. Taking over the common area maintenance functions from the developer and forming your own residential society is a tough task in the current scenario and so, warrants a separate checklist.

Forming a residential society

Typically, a builder is supposed to form a housing society after he has sold 60% of the flats in a project, within a four-month time frame. If the builder does not initiate the required proceedings, residents are free to form the society on their own. Given that flats in any project are handed over to buyers in a staggered manner, it takes 1-2 years for all buyers to either move into the new apartments or lease them out.

Once a building is largely occupied, residents need to come together and take stock of key issues, which need to be resolved prior to a complete takeover from the developer. First, they need to identify and appoint representatives from different wings or buildings of the same project to form the core society.

Next, they need to take stock of key issues awaiting immediate resolution from the developer’s end. These could include non-functioning of external or internal amenities, an incomplete clubhouse/gymnasium, leakages during monsoons, faulty electronic gadgets or sanitary fittings, etc. The society can also draw up a final checklist wherein they could highlight all these issues and hand the list over to the builder as a formal record.

Getting vital documents

Members need to draw up a list of the important documents that they need from the developer. These include property documents executed between the original landowners of the building site and the developer, an approved construction plan, the completion and occupancy certificates, and others. In addition, the developer must be asked to furnish the no-objection certificates from the fire and electricity departments.

The newly formed society should insist upon the developer to share the final plans and layouts of electrical wiring, water pipelines, sewage treatment plants and waste disposal systems, along with a certification from the architect concerned and the pollution control board.

The society must also seek a copy of the annual maintenance contracts, warranties and invoices for assets such as generators, transformers and elevators, equipment installed in the swimming pool, gymnasium and clubhouse, etc. Contracts with local vendors or facility management service providers must also form part of documents handed over finally.

Other key documents include copies of tax payments, sale deeds, share certificates, records of car parking allocations and a copy of the certificate exempting the project from the Urban Land Ceiling Act, issued by a competent authority. Finally, builders also need to submit a list of sold and unsold flats with the stamp of the firm or on company letter head. As a final confirmation, the residential society can also appoint a legal expert to ascertain the veracity and validity of these legal documents.

Managing maintenance

Even after the project is handed over to respective buyers, the developer manages the maintenance activities either through local vendors or jointly with a facility management service provider. Once the society is formed, it is the prerogative of residents whether to continue with the same service provider or seek the services of external agencies for functions such as security, housekeeping, garbage collection, maintenance of common amenities, etc. Alternatively, residents can also work out the cost economics of managing maintenance functions on their own or availing facility management services from the existing agency.

Developers typically obtain advance payments from buyers towards maintenance charges for the first few years, after the handover of the apartment. While it is a common practice where residents pick fault with maintenance activities carried out by the developer or the service provider during the initial phases, after the handover, it becomes a back-bending task to assume the full range of roles and responsibilities.

Of late, another area of ambiguity for several residential societies has been the concept of “common area maintenance" charges payable by residents from the date of handover.

Forming a society is definitely one of the most important milestones of any residential project. Nevertheless, seeking complete clarity and documentary proof on all critical matters is something that society members should never compromise upon. Practising thorough scrutiny and due diligence would alone ensure a smooth takeover of the project from the developer, leaving less room for repentance later.

Binaifer Jehani is director, Crisil Research.