Apartment Association & Maintenance Disputes in Hyderabad: Corpus Fund, Sinking Fund, Builder Handover and Resident Rights

Hyderabad | October 17, 2026

Moving into a new apartment is supposed to be the end of the buying process.

For many Hyderabad homeowners, it is when a completely different set of problems begins.

Who controls the maintenance account?

Why is the builder still collecting maintenance after hundreds of families have moved in?

Where did the ₹1 lakh or ₹2 lakh corpus contribution collected at purchase go?

Can an apartment association suddenly demand a large “sinking fund”?

Should a 1,200-sq-ft flat and a 3,000-sq-ft flat pay the same monthly maintenance?

Who owns the clubhouse, terrace, parking areas and other common facilities after handover?

And what can residents actually do if the builder refuses to transfer money, documents or control?

These are no longer theoretical questions.

Recent Telangana Real Estate Regulatory Authority orders have dealt directly with disputes over corpus funds, maintenance control and transfer of common areas to resident associations. In one recent matter, TGRERA stated that corpus collected from buyers is intended for the project's long-term common benefit and, after handover, must be transferred to the registered association rather than retained for unrelated purposes.

Another TGRERA order directed that common amenities and common areas be conveyed to the association and dealt specifically with transfer of corpus contributions collected from villa buyers.

For apartment owners in Hyderabad, Gachibowli, Kondapur, Kokapet, Narsingi, Tellapur, Financial District, Miyapur, Bachupally, Kompally and other fast-growing residential corridors, understanding these rules can prevent disputes worth lakhs of rupees.

Here is a practical guide.

Quick Answer: Who Controls What?

Issue	Practical position
Routine maintenance before association takeover	Promoter generally maintains essential services on reasonable charges until the association takes over
Association formation	Promoter has a RERA obligation to enable formation of an association/legal entity
Corpus collected from buyers	Should ultimately belong to the project/community and be transferred to the duly constituted association
Common areas	Cannot simply remain the builder's private property where they legally form part of project common areas
Monthly maintenance	Must follow applicable law, declaration, bye-laws and valid association decisions
Sinking/reserve fund	Used for future major expenditure; method and contribution should be supported by applicable bye-laws/valid resolutions rather than arbitrary collection
Accounts	Residents should expect transparent records, invoices and financial statements
Builder-versus-allottee RERA dispute	TGRERA may be an appropriate forum for a registered project
Committee-versus-member dispute	Depends on association's registration structure, bye-laws and nature of dispute
Unpaid maintenance	Can have serious consequences and should not simply be ignored because an owner disagrees with the bill

First Understand the Three Different Pots of Money

One reason apartment disputes become confusing is that residents use maintenance fund, corpus fund and sinking fund as though they are the same thing.

They are not.

1. Monthly Maintenance

This is operational money.

It generally pays for recurring expenses such as:

security;
housekeeping;
lift maintenance;
common-area electricity;
DG operation;
sewage-treatment plant operation;
water systems;
landscaping;
facility-management staff;
waste handling;
minor repairs;
common-area cleaning.

It is meant to keep the apartment community functioning today.

2. Corpus Fund

A corpus is typically a larger one-time contribution collected from buyers for the long-term financial stability and common welfare of the project.

Recent TGRERA decisions provide unusually clear guidance on this issue.

In one 2026 order involving a project with a ₹1.60 crore corpus dispute, the Authority described the corpus as a critical reserve intended for long-term maintenance, repair and future capital expenditure and said it had to be transferred to the duly constituted association once project management was handed over.

Another order concerning ₹1.30 crore held that corpus was a collective community asset rather than something individual buyers could simply demand back personally once it formed part of the project fund; TGRERA directed completion of transfer to the registered association.

So the useful principle is:

Corpus money collected for the community is not supposed to disappear when the builder exits.

3. Sinking or Major-Repair Fund

A sinking fund is intended for large future costs rather than this month's electricity bill.

Typical future expenditure could include:

major lift replacement;
exterior painting;
waterproofing;
replacement of pumps;
fire-system upgrades;
major STP equipment;
DG overhaul;
structural/common-area rehabilitation.

In Telangana, do not blindly apply a sinking-fund percentage copied from Maharashtra, Karnataka or another state.

The Telangana Apartments Act expressly deals with common expenses, common-area repairs and association bye-laws, but homeowners should check their own registered declaration, association bye-laws and valid General Body resolutions for how a separate reserve or sinking fund is created and collected.

That is important because websites often quote a universal “0.25% sinking fund rule” without explaining that the rule may come from another state's housing-society framework.

Can the Builder Keep the Corpus Fund?

Recent Telangana RERA orders strongly indicate that a promoter cannot simply retain buyer-collected corpus after the association has legitimately taken over responsibility.

In a recent case, TGRERA said a promoter remains responsible for essential services until maintenance is lawfully taken over by the Association of Allottees, and that the corpus should be transferred for the residents' common benefit after handover.

Another recent order required landowners who had collected corpus from buyers to transfer those amounts, with interest, rather than retain them after association handover.

This distinction matters in joint-development projects.

Sometimes:

developer sells one set of apartments;
landowner sells another;
both collect corpus separately.

Residents later discover that the association received only the developer's portion.

The fact that a different project partner collected the money does not automatically convert that money into the partner's private asset.

What Should Residents Receive During Builder Handover?

A proper apartment handover is much more than giving the association the security-office keys.

Before accepting final management control, the resident body should build a detailed handover inventory.

At minimum, examine whether it has received or verified:

Financial records

maintenance collections;
unpaid owner dues;
supplier liabilities;
corpus collected;
corpus transferred;
bank balances;
deposits;
vendor advances;
audited or independently reconcilable accounts.

Legal and approval records

sanctioned building plans;
Occupancy Certificate;
fire approvals where applicable;
RERA documentation;
conveyance-related documents;
project declaration and relevant registered documents.

Technical records

lift documents and AMC details;
DG manuals;
STP/WTP documents;
fire-system drawings;
electrical single-line diagrams where available;
transformer/substation documentation;
pump specifications;
warranties;
equipment invoices;
service contracts.

Vendor information

security contract;
housekeeping contract;
lift AMC;
landscaping;
pest control;
waste management;
facility-management agreement.

Physical assets

common-area keys;
access-control administration;
CCTV system credentials;
facility software access;
spare equipment;
maintenance stores.

A handover without documents can leave the association responsible for infrastructure it does not properly understand.

When Must the Builder Form the Association?

RERA makes formation of the association or legal entity a promoter responsibility.

TGRERA's current FAQ states that the promoter has to ensure formation of the Association of Allottees within two months once 60% of purchasers have taken possession and the promoter has received full consideration from those allottees.

Another TGRERA citizen summary refers to the Occupancy Certificate together with the 60% possession threshold when describing formation obligations.

Because project facts can differ, buyers dealing with a delayed handover should check the project's RERA registration, possession/OC status and the exact applicable obligation rather than relying on a salesperson's interpretation.

What is clear is that a promoter cannot indefinitely postpone formation of the owners' body simply because retaining control is convenient.

How Long Can the Builder Continue Collecting Maintenance?

RERA places responsibility on the promoter to provide and maintain essential services on reasonable charges until maintenance is taken over by the Association of Allottees.

TGRERA has relied on this obligation in recent disputes.

Therefore, the relevant question is not merely:

“Has the association been registered?”

It is:

“Has maintenance responsibility actually been lawfully and practically handed over?”

A transition period may be necessary.

For example, the association may exist legally but still not possess:

bank balances;
technical documents;
vendor contracts;
access systems.

Residents should therefore insist on a documented transition date and reconciled accounts.

Can the Builder Charge Any Maintenance Amount It Wants?

No reasonable reading of the system supports unlimited, unexplained charges.

The promoter's RERA obligation is to provide essential services on reasonable charges before takeover.

If a builder is collecting ₹5,000, ₹8,000 or ₹12,000 per month, residents should ask for the cost basis.

Request a breakdown covering:

common electricity;
water;
security;
housekeeping;
staff;
facility management;
equipment maintenance;
repairs;
taxes where applicable.

The correct question is not:

“Is ₹5 per sq ft legal?”

There is no single universal maintenance rate suitable for every Hyderabad project.

A 100-flat building with a basic lift and security service is very different from a 2,000-unit township with multiple clubhouses, swimming pools, STPs and large landscaped areas.

Transparency matters more than comparing one headline rate.

How Should Maintenance Be Divided Between Flats?

This is one of Hyderabad's most common apartment disputes.

Should every flat pay equally?

Or should a 3BHK pay more than a 2BHK?

The Telangana Apartments (Promotion of Construction and Ownership) Act says common expenses are chargeable according to an apartment owner's percentage of undivided interest in the common areas and facilities.

The Declaration identifies each apartment's percentage of undivided interest.

This makes the project's registered Declaration and bye-laws extremely important.

Owners should therefore avoid importing another community's formula simply because it appears fair.

Check:

the Declaration;
UDS percentage;
registered bye-laws;
General Body resolutions;
nature of the particular expense.

A committee cannot safely treat the governing documents as optional.

Can an Association Suddenly Demand ₹50,000 or ₹1 Lakh as a Special Fund?

A large special collection should never appear as a WhatsApp message with no supporting calculation.

Ask:

What work is proposed?
Is it routine maintenance or capital expenditure?
What is the estimated project cost?
Were competing quotations obtained?
Which bye-law permits the levy?
Was General Body approval required?
Was that approval actually obtained?
How has each flat's share been calculated?
Where will the money be held?

For example, a ₹1 crore façade-repair project may genuinely require a major collection.

That does not mean the committee should collect ₹1 crore without:

scope;
estimates;
approval;
accounting controls.

Who Owns the Clubhouse, Terrace and Common Amenities?

This is another frequent handover dispute.

The Telangana Apartments Act defines common areas broadly and includes, depending on the project's Declaration and approved configuration, features such as:

underlying land;
structural elements;
roofs and terraces;
corridors;
stairs;
gardens;
parking areas;
playgrounds;
central services;
lifts;
pumps;
common-use installations.

RERA also imposes obligations concerning transfer of common areas.

A recent Telangana RERA order held that an amenity block forming part of the project's common areas could not be appropriated as the promoter's exclusive property and directed its conveyance to the association.

However, the exact legal position for a particular clubhouse, shop, commercial facility or parking arrangement depends on:

sanctioned plan;
Declaration;
sale agreements;
RERA disclosures;
conveyance documents.

Never decide ownership based only on who currently possesses the key.

Can a Builder Sell or Retain Common Areas?

The Telangana Apartments Act expressly prohibits promoters or apartment owners from selling, leasing or misusing common areas and facilities covered by the statutory framework.

That does not mean every room inside a gated project is automatically a common area.

The approved plans and project documents matter.

For instance:

a separately sanctioned commercial shop may be private property;
a facility represented and conveyed as a common amenity may stand on a very different footing.

That distinction is exactly why residents should obtain the original project documentation during handover.

Can Owners Demand Association Accounts?

An apartment association manages other people's money.

That means financial transparency should be treated as basic governance, not a favour from the treasurer.

The Telangana Apartments Act requires association bye-laws to address financial records, collection of common expenses and maintenance of common areas. It specifically provides for a treasurer who keeps financial records and books of account.

Residents should expect organised records such as:

bank statements;
income and expense statements;
vendor invoices;
maintenance collection reports;
outstanding dues;
corpus/reserve statements;
major work approvals.

The exact inspection and audit mechanism can depend on the association's governing statute and bye-laws.

Corpus Fund Should Not Be Used as an Everyday Current Account

A ₹2 crore corpus can disappear quickly if it is casually used to cover routine monthly deficits.

Associations should clearly separate:

operating income

from

long-term reserves.

If maintenance collections are insufficient to meet routine costs every month, residents should address the real maintenance budget instead of quietly draining long-term reserves.

Otherwise, when the community later needs:

₹40 lakh for lifts;
₹30 lakh for painting;
₹20 lakh for waterproofing;

the reserve may be gone.

How Is a Sinking Fund Different From a Corpus?

In everyday community use:

Corpus fund: long-term capital reserve, often initially collected during purchase.

Sinking fund: reserve accumulated specifically toward predictable major future replacement or rehabilitation.

The labels can overlap in practice.

What matters legally and financially is:

why the money was collected;
what the sale agreement says;
what the association's bye-laws say;
what the General Body approved;
whether the money is separately accounted for.

A committee should not rename money whenever convenient.

Should the Association Keep Corpus in a Fixed Deposit?

Many associations choose relatively conservative instruments for long-term reserves because they do not want essential community money exposed to unnecessary risk.

The exact investment authority should come from:

association bye-laws;
governing statute;
General Body approval.

The committee should avoid turning apartment-reserve management into speculative investing.

Residents should know:

bank name;
deposit amount;
maturity;
interest earned;
authorised signatories.

A reserve is meaningful only if it still exists when the building needs it.

What Happens if a Flat Owner Refuses to Pay Maintenance?

Disagreeing with the committee does not automatically erase a legitimate maintenance liability.

Under the Telangana Apartments Act, lawful common expenses assessed against owners can constitute a charge on the apartment. The Act also makes a purchaser potentially jointly liable with the seller for unpaid common-expense assessments relating to the period before sale, although the purchaser may have recovery rights against the seller.

This creates an important lesson for resale buyers:

ask for a current association no-dues statement before completing the purchase.

Do not discover ₹2 lakh of old maintenance arrears after registration.

Can an Association Cut Water or Lift Access for Maintenance Dues?

This is a high-risk area where residents should avoid casual assumptions.

The Telangana Apartments Act contains a provision allowing the manager or board, after at least seven days' notice and for just and sufficient cause, to curtail certain essential supplies or services.

But using such a power can create serious factual and legal disputes, especially where:

elderly residents are involved;
medical needs exist;
water supply is affected;
the debt itself is disputed;
procedure was not properly followed.

Associations should obtain legal advice before taking coercive action rather than treating service disconnection as an ordinary collection tool.

Owners should likewise not assume non-payment has no consequences.

What Rights Does an Apartment Owner Have in Common Areas?

Each owner has rights connected with his or her undivided interest in common areas.

Under the Telangana Apartments Act, owners may use common areas for their intended purpose without hindering the lawful rights of other owners.

That means no individual owner should normally be able to appropriate:

a common corridor;
fire exit;
terrace area;
common parking space;
shared garden

for exclusive private use where the governing documents designate it as common.

The same principle works in the other direction:

an association should not casually convert a common facility into something entirely different without proper authority.

What Should a Builder Handover Audit Include?

Before residents sign a broad statement saying:

“All facilities received in satisfactory condition,”

carry out a proper audit.

Financial audit

Reconcile:

maintenance received;
corpus collected;
deposits;
dues;
vendor payments;
unpaid liabilities.

Technical audit

Inspect:

lifts;
fire systems;
electrical rooms;
waterproofing;
STP;
WTP;
plumbing;
DG sets;
pumps;
common-area civil work.

Documentation audit

Verify:

approvals;
warranties;
AMCs;
drawings;
certificates;
sanctioned plans.

Asset audit

Create an inventory.

A community taking control of assets worth crores of rupees should not complete handover through a two-page checklist prepared by the builder.

What if Major Defects Appear After Handover?

RERA contains a statutory defect-liability mechanism for qualifying defects reported within the applicable period after possession.

A handover to the association does not necessarily wipe out every promoter obligation.

Residents should document defects properly.

Use:

photographs;
videos;
engineering reports;
written complaints;
meeting minutes.

Do not depend entirely on hundreds of messages in a resident WhatsApp group.

A documented complaint trail becomes extremely important if the dispute reaches TGRERA or court.

Where Should Residents Complain?

The answer depends on who the dispute is against and what relief is required.

Builder or promoter dispute

For a RERA-registered project, TGRERA may be appropriate where the complaint concerns violations of the Real Estate Act or rules.

TGRERA states that an aggrieved person with an interest in a registered project may file an online complaint regarding violations of the Act, Rules or Regulations.

Issues can include matters such as:

association formation;
builder maintenance obligations;
corpus transfer;
common-area conveyance;
unfulfilled project obligations.

Association committee dispute

A dispute purely between residents and their elected association committee can fall under a different framework depending on whether the body is registered as:

a society;
co-operative society;
mutually aided co-operative society;
another permitted legal structure.

The association's certificate and bye-laws therefore matter.

Do not file blindly at TGRERA simply because the word “apartment” appears in the dispute.

Before Filing Any Case, Build a Document File

Keep copies of:

Sale deed
Agreement for Sale
RERA project details
Occupancy Certificate
Maintenance agreement
Corpus payment receipt
Association registration certificate
Association bye-laws
Declaration
Maintenance invoices
Corpus/sinking-fund statements
Bank/payment proof
General Body notices
Meeting minutes
Email correspondence with builder/association

A strong documentary record often resolves disputes faster than emotional arguments.

A 15-Point Builder-to-Association Handover Checklist

Before residents accept control, confirm:

Association legally constituted
Bank account operational
Complete owner database received
Corpus amount reconciled
Corpus transferred
Maintenance balance transferred
Vendor dues disclosed
Common-area documents received
Sanctioned plans received
OC and statutory approvals checked
Lift/fire/equipment documents received
Warranties transferred
Digital access/passwords transferred
Common-area assets physically inventoried
Handover deficiencies recorded in writing

If even five or six of these are missing, calling the transition “complete” may be premature.

What Resale Buyers Should Ask Before Buying a Flat

A resale buyer usually spends most of the legal effort checking the seller's title.

Association finances deserve attention too.

Ask:

What is the current monthly maintenance?

Not last year's rate.

Are special assessments pending?

A ₹5 lakh façade levy after purchase can change the economics of the deal.

What is the corpus balance?

A 10-year-old community with almost no reserve deserves investigation.

Does the seller have outstanding dues?

Get written confirmation.

Is litigation pending between residents and builder?

A dispute over a clubhouse, common land or major structural issue may affect the community for years.

Has the builder completed final handover?

A project can look fully occupied while financial and legal handover remains unfinished.

Red Flags Residents Should Not Ignore

Be cautious when you hear:

“The corpus calculation is confidential.”

or:

“The builder will transfer it later.”

or:

“There are no invoices because the developer handled everything.”

or:

“The association is registered, so handover is automatically complete.”

or:

“Every flat must pay the same because that is how all Hyderabad societies work.”

or:

“We can spend the corpus because the committee approved it.”

Each may have a legitimate explanation.

None should be accepted without documentation.

What Good Apartment Governance Looks Like

A professionally managed association should not depend on personalities.

It should depend on systems.

Good governance usually means:

approved annual budget;
transparent maintenance rate;
separate identification of long-term reserves;
regular financial reporting;
competitive vendor quotations;
recorded committee decisions;
General Body approval for major expenses where required;
independent audit/review where applicable;
accessible governing documents;
proper reserve planning.

This protects both residents and volunteer committee members.

The less transparent the system, the more every maintenance decision turns into a personal argument.

Why This Matters More as Hyderabad Builds Larger Communities

A 20-flat apartment may have a maintenance budget of only a few lakhs per year.

A 2,000-unit gated project can operate like a small municipality.

Its annual expenditure can include:

dozens of staff;
millions of litres of water;
major power consumption;
multiple STPs;
clubhouses;
fire infrastructure;
landscaping;
hundreds of CCTV cameras;
large equipment contracts.

Corpus funds can run into crores.

That scale requires professional accounting and governance.

A committee controlling ₹5 crore should not operate with the financial systems of an informal neighbourhood club.

The Bottom Line for Hyderabad Apartment Owners

The most important distinction is simple:

The builder's money, association money and residents' money are not interchangeable.

Once buyers have paid money for a specific community purpose, there must be accounting for it.

When maintenance moves from the promoter to the owners' association, residents should know:

how much was collected;
how much was spent;
how much remains;
what assets exist;
what liabilities exist;
what documents have been transferred.

A registered association without control of the money, records and common assets is only half a handover.

And a committee that later takes control assumes its own responsibility to account transparently to members.

FREQUENTLY ASKED QUESTIONS

1. Can a builder keep the corpus fund after the apartment association takes over?

Recent TGRERA decisions indicate that corpus collected from buyers for project/community purposes should be transferred to the duly constituted association when maintenance and project responsibilities are handed over. TGRERA has ordered transfer of corpus amounts in recent disputes.

2. Can an apartment association charge any maintenance amount it wants?

An association must act under applicable law, the project's Declaration, its bye-laws and valid decisions. The Telangana Apartments Act provides that common expenses are charged according to owners' percentage of undivided interest in common areas. Owners can therefore ask for the legal basis, budget and calculation behind a maintenance demand.

3. Where can Hyderabad residents complain if a builder refuses association handover or corpus transfer?

For a RERA-registered project, an aggrieved allottee or association can consider filing a complaint with TGRERA where the issue involves a violation of the Real Estate Act, Rules or Regulations. TGRERA provides an online complaints process. Internal association-versus-member disputes may require a different forum depending on how the association is registered and what relief is sought.

Final Takeaway

Many apartment disputes begin with one seemingly simple sentence:

“Maintenance is now being handed over to residents.”

That sentence should trigger due diligence, not celebration alone.

Before taking control, the association needs to know:

what money exists

what expenses are pending

what common assets belong to residents

what defects remain

what contracts are active

what the builder still owes

what legal documents support the handover.

Corpus money should be traceable.

Maintenance bills should be explainable.

Major reserve collections should have a documented purpose.

Common areas should not disappear into private control merely because residents failed to ask questions during handover.

And owners should remember that rights come with obligations: legitimate common expenses still have to be paid.

For Hyderabad's increasingly large apartment communities, transparent association governance is not a minor administrative issue.

It directly affects property value, monthly ownership cost, safety, long-term maintenance and the quality of life inside the project.

The smartest time to examine these matters is not after a ₹2 crore corpus dispute begins.

It is before the association signs the handover papers.

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Excerpt: Hyderabad apartment owners often face disputes over maintenance charges, corpus funds, sinking funds and builder handover. This guide explains current Telangana rules, resident rights and what documents an association should demand.

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Apartment Association Rules Hyderabad 2026: Maintenance, Corpus & Builder Handover