In the context of Co-operative Housing Societies (CHS), Apartment Owners Associations (AOA), Residents Welfare Associations (RWA): The Corpus Fund is typically handed over by the Builder to the Society / Association.
However, the Society may contribute further and utilize this Fund by making Rules with the approval of the General Body. However, such fund cannot be taken from the person transferring flat/tenement/right to share/share capital in the society.
Utilization: As per rules made and approved by General Body. You can read more about the fund and it’s implications here.
Why Do Apartment Owners Need to Maintain a Corpus Fund?
Are you an owner of an apartment complex and wondering why it is necessary for you to maintain a corpus fund? Maintaining a corpus fund is an essential part of apartment management and can be quite beneficial over the long run.
A corpus fund is essentially a reserve of funds which can be used for various purposes. This means that all or part of it may be used by the apartment owners as and when necessary. It could be needed for regular maintenance of the complex, such as fixing plumbing leaks, repairing air conditioning systems and other similar tasks. It could also be used for onetime expenses such as replacing a roof or repainting the complex.
Maintaining a corpus fund also helps contribute to the overall stability of the apartment community. For example, if there is a sudden expense which needs to be taken care of and the owner does not have sufficient funds in the bank, having a corpus fund can help. This ensures that there are always funds available in case of an emergency.
Overall, maintaining a corpus fund is a smart decision for any apartment owner, as it provides the necessary peace of mind when dealing with unexpected expenses or repairs. It is also beneficial in the long run, as it helps ensure that the apartment complex is properly maintained and that any needed repairs or upgrades are taken care of in a timely manner.
Different Types of Corpus Fund
Corpus funds can be of two types – maintenance-based and development-based.
- Maintenance-based corpus funds are relatively smaller as compared to development-based corpus funds and are used primarily for routine maintenance activities. These funds may be required for repairs such as broken doors and windows, painting, whitewashing, plumbing, electrical repairs and so on.
- On the other hand, development-based corpus funds are larger in amount and are collected basically to fund projects such as construction of a new wing, purchase of new equipment, installation of recreational facilities and so on.
Keeping apart both these funds is extremely beneficial as it enables the members of the apartment/society to save enough money for projects that are future-oriented.
Moreover, the funds can also be used to keep up with any competitions that the neighbouring apartments or societies may come up with. In other words, these funds play a vital role in the overall prosperity of the apartments or societies.
Role of RWA/ Building Management Committees in Corpus Fund
When planning operational costs for any type of residential corpuses, it is important to plan for the establishment of a Resident Welfare Association (RWA) or Building Management Committee (BMC).
These organizations are important for efficient management and control of funds allocated to the corpuses. The RWA/BMC will serve as the governing body responsible for developing a budget approved by its members.
The budget will cover the various necessary expenses of running the corpuses such as maintenance and upkeep, security and administrative expenses. In addition to budgeting, the RWA/BMC will also be responsible for collecting the necessary funds from each living unit owner of the corpuses. This will enable the association to be able to maintain the necessary coverage of basic amenities and facilities as outlined by the budget.
Depending on the governing rules of the association, it may also be responsible for undertaking various projects in the corpuses such as new construction, painting, landscaping and the like. The RWA/BMC is critical for not only ensuring the efficient running of the corpuses, but also for ensuring healthy relationships within the community.
The involvement of all living units in the association means that decisions about the environment and facilities provided are made for the benefit of all and according to the wishes of the majority. It also means that if any disputes arise between residents, then it will be easier to come to a consensus because all the stakeholders are involved and have a clear understanding of their rights and responsibilities.
Overall, RWA/BMC is critical for enabling successful operation and management of funds in any residential corpus. The organization is responsible for not only maintaining a budget but also for carrying out necessary projects and settling disputes between members. As such, it is essential for the planning process of any residential corpus.
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