In an Indian apartment society you buy a flat and a share of everything around it. The flat is yours; the lifts, pumps, generator, clubhouse, roads and open space are held in common and paid for by a monthly charge. How that charge is split, and who controls the money, matters more than anything in the brochure.
Key facts
- Maintenance is usually billed per square foot of super built-up area, or sometimes as an equal amount per flat. The choice shifts cost between large and small flats.
- The corpus fund is a one-time deposit collected at possession and handed to the association. The sinking fund is a recurring reserve built up for future major repairs.
- Owners associations are registered under state law — most often a state apartment ownership statute, a state co-operative societies statute, or the Societies Registration Act, 1860. Which one applies depends on the state and the project.
- RERA requires the promoter to enable the formation of an association of allottees and to hand over the common areas; the exact period is set by each state's RERA rules.
- Handover is not just keys. It includes audited accounts, the corpus balance, as-built drawings, equipment warranties, utility accounts and the conveyance of common areas.
- Property tax stays with the individual owner. The association collects maintenance, not tax.
- GST law exempts maintenance contributions below a per-member monthly threshold, and exempts associations below the registration turnover threshold. Both figures have been revised before — check the current ones with the association's accountant.
- Amenities raise the sale price and the monthly bill together. A clubhouse nobody uses is a permanent cost against a one-time premium.
What you actually pay every month
The monthly maintenance bill is not a fee for a service somebody else provides. It is your share of running a small piece of civic infrastructure. A tower has lifts that need an annual maintenance contract and a periodic rope or controller replacement. It has a borewell or a water connection, a sump, pumps and the electricity to lift water up twenty floors. It has a diesel generator, usually a sewage treatment plant, security staff on three shifts, housekeeping, lighting in corridors and basements, landscaping, pest control, fire system servicing, insurance, an accountant and often a facility management contractor on top.
Those costs behave differently. Security and housekeeping rise with wages every year. Power is a tariff you do not control. Repairs are lumpy — nothing for three years, then a pump set or a lift controller. A society that budgets only for the smooth months raises a special levy the first time something expensive breaks.
| Head | What it covers | Behaviour |
|---|---|---|
| Security | Guards across shifts, supervisor, boom barriers, CCTV monitoring | Largest or second-largest head in most societies; rises with minimum wages |
| Housekeeping | Common area cleaning, garbage collection, consumables | Labour-linked, rises annually |
| Common area electricity | Lifts, pumps, corridor and basement lighting, STP, clubhouse | Tariff-driven; higher in tall towers because of pumping and lift load |
| Water | Municipal supply, tanker purchases where supply is short, borewell power | Spikes in summer and in corridors with weak piped supply |
| Lift maintenance | Annual contract, periodic part replacement | Contract is steady; replacements are lumpy and belong in the sinking fund |
| Diesel generator | Servicing plus fuel actually burnt | Varies with how bad local power supply is |
| STP and water treatment | Operator, chemicals, membrane or media replacement | Under-budgeted in many new societies |
| Clubhouse and landscaping | Gym equipment servicing, pool chemicals and filtration, gardeners | Fixed cost whether or not members use it |
| Administration and insurance | Facility manager, accounts, audit, legal, building cover | Fixed; proportionally heavier in small societies |
Per square foot or an equal split
Two methods dominate. In the per-square-foot method the total budget is divided by the total saleable or super built-up area in the project, and each owner pays that rate times their own area. In the equal-split method the budget is divided by the number of flats and everyone pays the same.
The per-square-foot method is the common default and easy to administer, but it is a rough proxy for consumption. Security, housekeeping, the clubhouse and the generator are consumed per household, not per square foot: a four-bedroom flat does not use four times the security of a one-bedroom. In a project with a wide mix of sizes, per-square-foot billing therefore moves cost from small flats to large ones. The equal split does the reverse, which is why it tends to appear only where all the flats are roughly the same size and the argument never arises.
A third approach splits the budget: usage-linked heads such as water and generator fuel charged per flat or on metering, and area-linked heads such as structural repairs and insurance charged per square foot. It is fairer and more work. Where a state's apartment ownership statute or the project's declaration fixes the basis, that basis governs and a general body resolution cannot simply override it.
The corpus fund and the sinking fund
These two get used interchangeably in sales conversations and they are not the same thing.
The corpus fund is a one-time amount collected from each buyer at or near possession, usually quoted as a rupee figure per square foot. It is not meant to be spent on running costs. It is the association's opening capital: parked in deposits, with the interest cushioning the monthly budget and the principal available for genuine emergencies. The builder collects it as a trustee and is supposed to transfer the whole balance, with the interest it earned, to the association at handover. Transfers that arrive short — spent on running costs during the builder-managed period, or never credited at all — are one of the most common handover disputes.
The sinking fund is a recurring reserve. A fixed slice of every monthly bill is set aside for capital items with a long life and a large bill at the end of it: external painting, waterproofing and terrace treatment, lift modernisation, plumbing and riser replacement, repaving internal roads, STP overhaul. The point is to spread a cost that arrives once in seven or ten years across the years in between, so that the owner who happens to be in residence when the lifts need replacing is not asked for the whole thing at once. Societies that keep monthly charges artificially low usually do it by not funding this, and pay for it later through special levies that are far harder to collect.
A sinking fund only works if it is held separately — ask to see it as a distinct line in the balance sheet, not a note in the minutes. And when you buy resale you buy into whatever reserve position exists: a society with a funded reserve and no deferred painting is worth paying more for than an identical one that has not touched its facade in a decade.
How an association is formed and registered
The legal route differs by state, and this is where generic advice goes wrong. Broadly there are three families of statute. Several states have an apartment ownership Act, under which each owner holds their apartment plus an undivided share in the common areas, the builder files a declaration, and the owners constitute an association governed by the Act and that declaration. Other projects are organised as co-operative housing societies under the state's co-operative societies legislation, the dominant pattern in Maharashtra. A third route is registration under the Societies Registration Act, 1860 or its state equivalent, common where the project runs as an owners welfare association.
These are not interchangeable. They differ on who holds title to the land, what majority is needed for different decisions, how office bearers are elected, what filings and audits are compulsory, and which authority hears a dispute. Find out which statute your society is actually registered under and read that one.
Separately from state law, RERA requires the promoter to enable the formation of an association of allottees within the period prescribed by the relevant state's RERA rules, and to hand over the common areas to it. That gives allottees a route to complain if the builder stalls formation. The practical sequence is much the same everywhere: a core group of owners calls a meeting once a reasonable share of flats are occupied, by-laws are adopted, office bearers are elected, registration is applied for, and the registered association then writes to the builder asking for handover.
Two traps. An informal owners group with a WhatsApp treasurer has no legal standing to hold funds, sign contracts or sue. And a builder-nominated committee is not an association — it is the builder's facility management arrangement wearing the word.
The builder handover and what must come with it
Handover is a transfer of a going concern, not a ceremony. The items people forget to ask for are exactly the ones that cost money later.
| Item | Why it matters |
|---|---|
| Audited accounts for the builder-managed period | Shows what maintenance money was collected and what it was spent on |
| Corpus fund balance with interest | The association's opening capital; shortfalls are common and must be raised now, not later |
| As-built drawings — structural, plumbing, electrical, fire, drainage | Without them, every future repair starts with exploratory demolition |
| Equipment manuals, warranties and AMC papers | Lifts, pumps, DG, STP, fire panel — live warranties have cash value |
| Occupancy certificate and completion certificate | Needed for utility connections, resale finance and to show the building is legally occupiable |
| Approved plans, fire NOC, lift licences, STP and DG consents | To check what was approved against what was built, and the compliances that now sit with the association |
| Utility accounts transferred to the association | Electricity and water accounts left in the builder's name create billing and arrears risk |
| Conveyance of land and common areas | The step that actually moves ownership of the common property; often the last and most delayed |
| Defect liability status and open snags | The builder's repair obligation runs for a statutory period after handover; record defects in writing before it lapses |
The conveyance is the item most often left hanging. Until the land and common areas are formally conveyed, the builder remains on paper the owner of the ground your society sits on. That affects redevelopment decades later, the association's ability to deal with the property, and it occasionally resurfaces as a claim over open land everyone assumed was theirs. In an older society, ask to see the deed rather than accepting that it is in process.
Before accepting handover, a sensible association commissions an independent engineer to list defects and an independent accountant to examine the builder's maintenance accounts. Both cost a fraction of what they typically find. For project status the state RERA portal is the first place to check; our RERA project check explains what the entries mean, and the RERA guide for homebuyers covers the complaint route when a promoter stalls.
How budgets and common area disputes actually work
The association's financial year runs on a budget approved by the general body. The committee prepares an estimate head by head, proposes a rate, and the general body votes. Good practice is boring and recognisable: last year's actuals next to this year's estimate, a capital plan funded by the sinking fund, an auditor appointed by the general body rather than the committee, and quarterly circulation of collections and arrears. If a society cannot show you last year's audited accounts, that is information about the society.
Arrears are the usual pressure point. A society with a tenth of its flats not paying is asking the rest to subsidise them, and the standard responses — interest, a defaulters list, denying discretionary amenities, eventually recovery before the authority named in the governing statute — all take time. Cutting off water or electricity is frequently attempted and legally risky: courts and consumer forums have taken a dim view of an association disconnecting essential services to recover money.
Common area disputes follow a short list of patterns. Someone encloses a balcony or extends into a common terrace. A ground floor owner treats the adjoining garden as private. Someone parks in two slots. Someone runs a paying guest operation and twelve people now use amenities sized for four. The resolution comes back to two documents: the sanctioned plan, which says what is common area, and the by-laws, which say what the association can do about it. Where the by-laws are silent, the governing statute fills the gap.
Parking allocation
Parking is the most-litigated square footage in Indian apartments. The important principle is that open and stilt parking spaces are generally part of the common areas and not independently saleable property — the Supreme Court held as much in a 2010 decision arising under Maharashtra's flat ownership legislation, and the reasoning has been widely cited since. RERA is consistent in treating open parking as part of the common areas, while allowing a garage as defined in the Act to be dealt with separately. A builder's sale agreement is usually drafted to maximise what it can charge for, so read what you are actually being sold.
In practice parking reaches owners one of three ways: allotment by the builder at the time of sale, allotment by the association after handover, or an inherited mess where the builder allotted more slots than exist. The third is commoner than it should be, and it is worth counting. Compare the sanctioned parking spaces on the approved plan against the number of flats and the slots promised in writing. A deficit found after handover becomes the association's problem.
Sensible associations fix the method once and stop relitigating it: one slot per flat as the baseline, a draw for the better locations, a published charge for a second slot, and a rule that an allotment travels with the flat rather than the person. Visitor parking must be ring-fenced on paper or it disappears within a year. What the builder charges for parking is a separate question from who owns it, and we cover the cost side in what buying a home really costs.
When the builder keeps control of the clubhouse
In large phased townships, builders sometimes retain the clubhouse rather than hand it over. The arrangement is presented as professional management, and sometimes it is. The structural problem is that the clubhouse has been paid for by buyers — through the price, through club charges, or both — and is then run as the builder's asset, with a fee the builder sets, access extended to later phases the existing owners did not agree to, and no accounts shown to anyone.
Before buying into such a project, get three things in writing: whether the clubhouse land and structure form part of the common areas being conveyed; what the recurring charge is and who can revise it; and how many future phases will share the facility. Where it is retained, treat the club fee as a permanent addition to your monthly cost.
Gated community, standalone building, independent house, villa
The format argument is usually conducted on feel. It is more useful on cost, land, privacy, security, resale and tenant pool, because those differ in ways you cannot change after buying.
A gated community buys you shared infrastructure at shared cost: perimeter security, backup power and water, amenities, maintained open space. It also buys you a committee, a monthly bill that rises every year, rules about what you can do to your own flat, and an exit that depends on how well the society is run. A standalone building of twenty or forty flats has a much lower monthly charge because there is almost nothing to maintain, but administration and major repairs are spread across far fewer owners, so a lift replacement is a visible levy rather than a line in a budget. It also tends to have no backup water.
An independent house on its own plot gives you the land, which is the part of residential property that appreciates, and freedom to build, extend and let out floor by floor. It also gives you every maintenance problem personally, security that depends on the street, and a buyer pool that is smaller and slower than for flats. A villa in a gated scheme is the hybrid: a land share and a private structure inside a managed community, at a higher price per square foot of built space and a maintenance charge that is usually higher per unit than an apartment's because the shared infrastructure is spread across fewer households.
| Factor | Gated community flat | Standalone building flat | Independent house | Villa in gated scheme |
|---|---|---|---|---|
| Monthly outgo | Highest among flats; scales with amenities | Low; little to maintain | Lowest recurring, but repairs are yours | High per household; shared infrastructure, fewer payers |
| Land share | Small undivided share | Small undivided share, sometimes larger per flat | Whole plot | Defined plot or a larger undivided share |
| Privacy | Lowest; shared walls, lifts, corridors | Moderate; fewer neighbours | Highest | High within the unit |
| Security | Strongest by default | Depends on the building; often a single guard | Your own responsibility | Strong; community perimeter |
| Water and power backup | Usually built in | Frequently absent | Whatever you install | Usually built in |
| Resale liquidity | Highest; many comparable units and a visible price | Moderate; fewer comparables | Slowest; valuation is plot-specific | Moderate; a narrower, wealthier buyer pool |
| Tenant pool | Widest; amenities and security sell to families and to company leases | Narrower; price-sensitive tenants | Good if it can be let floor by floor | Narrow but high-paying |
| Main risk | A badly run association, or amenities you pay for and never use | A lumpy repair with no reserve behind it | Title and encroachment issues; everything is on you | Promoter retaining the club or common land |
Two observations cut through most of this. Amenities support the price at sale but are a permanent cost, so the question is which of them your household will use weekly — a lift, water backup and security, almost always; a pool and a mini-theatre, often not. And a well-run society with modest amenities beats a lavish one with a dysfunctional committee, because the committee decides whether the building is maintained and your resale price holds. On the rental side, renting out your property and our rental ROI calculator handle the yield arithmetic, and where to buy property in India the location question.
Checking a society before you buy resale
When you buy resale, you inherit the society's finances and its disputes along with the flat. The seller will not volunteer either. Ask for these in writing, from the association and not only from the broker.
- Last two years of audited accounts and the current year's approved budget. Look at the arrears figure and whether the sinking fund is a real, separately held balance.
- A no-dues certificate for the specific flat. Unpaid maintenance attaches to the flat in practice, whatever the sale agreement says.
- The maintenance rate, its basis, and the last three revisions. A rate that has not moved in five years means either exceptional management or deferred spending.
- Whether handover from the builder is complete, and whether the land and common areas have been conveyed. Ask to see the deed.
- Which statute the association is registered under, plus a copy of the by-laws and the transfer procedure and fee for a new owner.
- Pending litigation or authority proceedings involving the association, the builder or the land.
- The capital works history and plan: when the building was last painted and waterproofed, the age of the lifts, and whether any special levy is proposed.
- Parking: how many slots come with this flat, in writing, and whether the allotment transfers to you.
- Occupancy certificate for the building, and any deviation from the sanctioned plan in the flat you are buying.
- Water and power: source, supply hours, tanker dependence in summer, and whether the generator backs up individual flats or only common areas.
- Rules you will live with: letting restrictions, pet rules, interior work timings.
Walk the basement and the terrace, not just the flat. Basements show seepage, drainage, how parking really works and whether the STP smells. Terraces show waterproofing, tank condition and unauthorised structures. Then talk to two owners who are not on the committee.
For the wider process, see how to buy a home in India; for builder track record on handover and defect repair, builder reviews and project data; and among our calculators, a property tax calculator for the one recurring cost the association does not collect for you.
Frequently asked questions
Is maintenance charged per square foot or per flat?
Both methods are used, and per square foot of super built-up area is the more common default. Per-square-foot billing shifts cost towards larger flats because much of the budget — security, housekeeping, the clubhouse — is consumed per household rather than per square foot. Where the declaration or the governing statute fixes the basis, that basis prevails over a general body preference.
What is the difference between a corpus fund and a sinking fund?
The corpus fund is a one-time amount collected around possession and transferred to the association as its opening capital, normally kept in deposits and not spent on running costs. The sinking fund is a recurring reserve built from a slice of every monthly bill, set aside for large periodic works such as painting, waterproofing and lift replacement.
Can the builder keep the corpus fund?
No. The builder collects it as a trustee and should transfer the full balance with accrued interest to the registered association at handover, supported by audited accounts for the period it was held. Shortfalls are a frequent handover dispute, and the association should get an independent accountant to examine the builder's maintenance accounts before signing off.
Which law governs an apartment owners association in India?
It depends on the state and how the project was set up. The three usual routes are a state apartment ownership Act, the state co-operative societies legislation, or the Societies Registration Act, 1860 or its state equivalent. They differ on majorities, elections, filings and which authority hears disputes, so find out which one your society is registered under.
Can a society cut off water or electricity for unpaid maintenance?
It is often attempted and it is legally risky. Courts and consumer forums have generally been unsympathetic to associations disconnecting essential services as a recovery tactic. The safer route is interest on arrears, withdrawal of discretionary amenities, and recovery before the authority named in the governing statute. Check your by-laws and statute before acting.
Can a builder sell parking spaces separately?
Open and stilt parking is generally part of the common areas rather than independently saleable property; the Supreme Court held so in a 2010 decision arising under Maharashtra's flat ownership legislation. RERA treats open parking as a common area while allowing a garage as defined in the Act to be dealt with separately, so read exactly what the sale agreement says you are buying.
Is a flat or an independent house the better buy?
They answer different questions. A house gives you the land, which is the appreciating part, plus freedom to build and let floor by floor, at the cost of doing all maintenance and security yourself and a slower resale. A flat gives you shared infrastructure, security and liquidity, at the cost of a permanent monthly charge and little control.
Why is villa maintenance higher than apartment maintenance?
Because the shared infrastructure — roads, perimeter security, water treatment, clubhouse, landscaping — is spread across far fewer households than in a tower-based community. The per-unit share of the same facilities is simply larger, and villa schemes also tend to maintain more open space per home.
What should I check about a society before buying a resale flat?
Audited accounts for two years, the arrears figure, whether the sinking fund is separately held, a no-dues certificate for that flat, whether builder handover and the conveyance of common areas are complete, the by-laws and transfer fee, pending litigation, the capital works history, and the parking allotment in writing.
Does the association pay my property tax?
No. Property tax is the individual owner's liability to the local body and is assessed on your flat, not on the association. Maintenance charges cover the running of the common areas only. Budget for the two separately.
Do amenities increase a flat's resale value?
They support the asking price and widen the tenant pool, especially for family and company-lease tenants, but they also raise the monthly charge permanently. The useful test is which amenities your household will use weekly. A well-run society with modest amenities generally holds value better than a lavish one with a dysfunctional committee.
What is the defect liability period?
It is the period after handover during which the promoter must rectify structural defects and defects in workmanship or services at its own cost, on being notified by the allottee or the association. RERA prescribes a period for projects within its scope. Record every defect in writing well before the period lapses, because an undocumented complaint is hard to pursue afterwards.
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