Builder to Association Handover – Event Takeaways

Builder to Association Handover

Last month, ADDA brought you ‘Builder to Association Handover – An Open house Discussion’ to help you better understand the nitty-gritties of a society handover.

The event held at Taj Vivanta Bengaluru, was catered towards associations and housing societies that are either undergoing or about to undergo builder handover. During a society handover, associations often overlook issues that later burn a big hole in their pockets.

An association should ensure that all apartment issues are found, fixed, and resolved to avoid this. A few critical areas that require attention during the builder handover are legal, electrical, water, finance and security. This event provided the audience with a space to share and discuss their expertise on the topic. 

Distinguished Speakers and Panel Members

Among the distinguished speakers and panelists of the event were: 

  • Uday Simha Prakash (CEO & Founder, Nemmadi)
  • Iswar Dixena (Managing Committee, Prestige Sunrise Apartments)
  • Rahul Raj (Director, RM Consultants)
  • Ajith Alex George (Director, 42 Estates)
  • Representatives from Bangalore Apartments’ Federation 
  • Meera K (Citizen Matters)

Session 1: Ishwar Dixena

For the first session, we were graced by Iswar Dixena – Managing Committee, Prestige Sunrise Apartments. He took the audience through ‘A Checklist for Associations on Builder Handover’. Being the key person during the handover of his apartment Prestige Sunrise, he drew both from his vast knowledge and personal experience. 

Key Takeaways:

The following comprises the checklist for associations:

  • Form Association (RWA) and registration as a legal entity
  • Society bank account, legal documents and corpus fund
  • A community software
  • Domain and email address
  • Snagging (auditing) and transition 

These are the various audits to be carried out:

  • Technical due diligence
  • Preview of statutory compliances
  • Soft service due diligence
  • Safety and security review
  • Asset validation
  • Financial (corpus)
  • Documents handover

The following entails the list of documents needed:

  • Project Completion Certificate & Occupancy Certificate
  • Consent for Operations Certificate for equipment like DG, Lift, STP, etc
  • Sanctioned Plan
  • Environment Clearance Certificate
  • Fire No Objection Certificate
  • Electricity Installation No Objection Certificate
  • Building insurance
  • As built drawings for all packages
  • Floor layout plans including basements and terrace
  • NOC/License from electrical inspector if a lift is installed
  • Water load calculations
  • Car parking allocation record
  • Contracts with vendors
  • All legal documents executed between builder and landowner
  • AMC documents – lift, transformer, pumps, generator and gym equipment
  • Invoices and warranties for all assets – lift, transformer, pumps, generators, gym equipment
  • For sewage treatment plants – Pollution Control Board report

A utility check as listed below is also required:

  • Water Treatment Plant Systems
  • Sewage Treatment Plant
  • Water Supply, Plumbing & Sanitation
  • OWC
  • Electrical Systems
  • Earthing Systems
  • Elevators
  • Diesel Generators
  • Common Area Lighting & Navigation Lights
  • Fire Fighting, Alarm, Detection & Suppression Systems
  • CCTV & Security Systems
  • Solar Panels and accessories
  • Mechanical Ventilation & Pressurization Systems

The speaker recommended that communities get a 12-month start on the handover plan and enlist a third-party audit for all the utilities.

QnA session

Q1. Should associations register under Karnataka Societies Registration (KSRA) Act of 1960 or Karnataka Apartment Ownership Act (KAOA) of 1972?

Ans: All housing societies should register under the Karnataka Apartment Ownership Act (KAOA) of 1972.

Q2. Who should an association consult before and during handover?

Ans: It is advised to consult the following: empanelled architect from BBMP, MEP consultants, and a legal person to look at land documents. An association should create an adhoc committee in the beginining itself to interact with the builders.

Q3: What happens in the snagging process?

Ans: A third-party specialist vendor will visit your property and based on the scope of the work they will come up with a snag list. The snag list covers the following areas: electrical, civil, fire, etc. This is then given to the builder for addressing the snags, which is followed by de-snagging. 

Session 2: Aashika Sripathi

For the next session, we had Aashika Sripathi, Chief Operating Officer at ADDA take us through the importance of having a digital platform during the builder handover.

Key Takeaways:

The following are the benefits of using a digital platform:

  • A robust platform for collecting and gathering owners’ data in one place
  • Gathering information for all units and all accounts including owners and tenants
  • Documents and compliances
  • Easy for owners that are not present at the place physically to know everything
  • Required for conducting elections online so that all owners can do it remotely without being present physically
  • Financial governance with automated billing and collection
  • Security of a community is also taken care of

Why you should choose ADDA for your community:

  • ADDA completes a decade in 2019 with offices across India, Dubai & Singapore
  • ADDA is spread across 3000+ communities with 1.2 million users
  • Fully compliant with Real Estate Regulatory Authority (RERA) across multiple countries
  • The world’s 2nd tallest residential building – The Princess Tower, Dubai and India’s 2nd tallest residential building – The Imperial is hosted on ADDA

Session 3: Uday Simha Prakash

The third session was conducted by Uday Simha Prakash – Founder of Nemmadi. He took the audience through a ‘Guide to Handover Audit’.

Key Takeaways:

The Audit has 5 layers as follows:

  • MEP Quality Audit (Mechanical, Electrical & Plumbing)
  • MEP Design Audit
  • Civil Workmanship Audit
  • Documentation Audit
  • AMC Audit

The speaker also provided unique case studies from the communities they had come across during audits. 

Panel Discussion 1: Operational Aspects of Handover

1) As the building is nearing completion, what does the builder start planning for?

Ans: A team of property management and services start auditing on facilities (right from entry point such as STP, WTP, elevators, fire system, etc.). They interact with project teams, create their own snag list, and get them rectified. This is followed by QA certification and pre-inspection. They also request the head architect to incorporate customer feedback from previous projects.

2) Why is documentation a big challenge for all RWAs, and what should builders do to fix this issue?

Ans: Compile documents from all teams- legal, electrical, engineers, etc. Ensure that in 15-20 days it is handed over to the association. Testing of lines has to be done prior to handover.

3) How do you put together a group to form an association?

Ans: Put together an adhoc committee based on skill sets. During registration, get an election done. If not competent enough, get a lawyer to check documents such as fire, lift, STP, CIG, and elevators, as OC is given based on these. Make a sub-committee for each system such as water, electrical, etc. Get an auditor. Ensure that a benchmark is set by the first associaiton.

4) How do you take over financials from the builder?

Ans: A team of residents should be working with the builders from the beginning to monitor the expenditure. If any leftover is there, it will come back to the association. The next step is to work on a budget, and keep a 5-10% margin. 

5) What is the role of the builder in setting up the first association?

Ans: First, the builder pushes the residents to form an adhoc commitee and makes them understand the importance of it. This empowers the residents in taking decisions right from budget to expenditure, and even the selection of vendors. Some of the challenges builders face in this process are: generation gap between members and the considerable time taken to educate and win the trust of the association.

Panel Discussion 1: Legal Aspects of Handover

1) How does one determine whether an apartment needs to be registered? Or What is the benchmark for an apartment to register itself?

Ans: Karnataka Apartment Ownership Act (KAOA) of 1972 promulgates the rules and regulations for the promoter. The benchmark would correlate to the association. An association would be registered by virtue of their respective sale deeds. However, right now, most apartments are registered under the 1960 Act, where the minimum requirement is 7 persons.

In the 1972 Act, under Section 11, it says that the builder should hand over the documents for registration, although there are no specific timelines mentioned in the statutes.

2) When should the association be formed?

Ans: RERA (Real Estate Regulatory Authority) clearly states that after the sale deed is executed, within one year, the association has to be formed by the builder. 

3)  Some apartments are registered under the Karnataka Societies Registration (KSRA) Act of 1960. Can they continue under that?

Ans: Many apartments are running under the 1960 Act, which is against the law. Since 2018, the Karnataka High Court has affirmed that the KSRA Act does not apply to associations. 

4) How does an apartment switch to the Karnataka Apartment Ownership Act (KAOA) of 1972?

Ans: The first step is to call an AGM and get a sanction to register under the 1972 Act. Ensure you have 21 days’ notice, so your meetings are not invalidated. Adopt the Deed of Declaration (DOD) received from the builder and get the byelaws registered at the sub-registrar office. The entire process takes around 3 months.

Event Recordings

On behalf of the entire ADDA team, we thank all the speakers, panelists and attendees for attending ‘Builder to Association Handover: An Openhouse Discussion’ and making the event a huge success.

To relive the magic, you can check out the event’s recordings whenever you’d like: 

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