Builder Delays Maintenance Transfer: A Worked Takeover, Step by Step

Reviewed on: 2026-06-12.

Take a real-shaped example. A Bengaluru project, 180 flats averaging 1,200 sq ft, so 2,16,000 sq ft in all. At possession in 2024 the builder collected 24 months of advance maintenance at Rs 3 per sq ft per month: Rs 86,400 per flat, roughly Rs 1.56 crore in total. The owners registered their association under the Karnataka Societies Registration Act in month 14 and asked to take over. The builder stalled for four more months, then offered a “handover” with a single sheet showing a nil balance.

The association refused to sign and instead demanded a reconciliation. The arithmetic looked like this: 18 months of collections held, Rs 1.56 crore received in advance, plus actuals billed to late possessions. Audited expense statements showed average running costs of Rs 5.9 lakh per month, about Rs 1.06 crore over 18 months. That left roughly Rs 50 lakh of unspent advance plus bank interest that had to move to the association's account, along with six months of advance still unexpired for most flats. The “nil balance” sheet had quietly absorbed the surplus into unexplained “admin charges”. A written demand for the bank statements settled the question in the association's favour.

The lesson: maintenance transfer is an accounting event, not a key ceremony. Never accept a closing figure you cannot recompute from collections minus audited expenses.

• Under Section 11(4)(d) of the RERA Act, 2016, the promoter must provide and maintain essential services, on reasonable charges, until maintenance is taken over by the association of allottees.
• Under Section 11(4)(g), the promoter pays all outgoings, including municipal taxes, water and electricity charges, until he transfers physical possession. Amounts he collected from allottees for outgoings but did not pay remain his liability, with interest.
• Advance maintenance collected from buyers is purpose-tied money. On takeover, the usual position is that the unspent balance and unexpired advance transfer to the association, supported by audited accounts.

So the builder cannot keep running maintenance indefinitely against the association's wishes, and he cannot exit while keeping the surplus.

1. Fix a takeover date in writing. The association resolves to take over maintenance from a named date, typically the start of a month, and notifies the builder by email and registered post with 30 days notice.
2. Demand the reconciliation pack: flat-wise collection register, audited income and expenditure for the builder-run period, bank statements of the maintenance account, list of defaulting flats with amounts, and the unexpired advance position per flat.
3. Map the transferables: staff list with wage records and EPF/ESI registrations where applicable, vendor and AMC contracts (lifts, DG sets, STP, fire systems, housekeeping, security), utility connections and meters with security deposits, common-area keys and access systems.
4. Joint verification. Walk the property and the books together. Record meter readings and diesel stock on the takeover date. Sign an item-wise handover memo; put disputed figures in a disagreement annexure rather than holding up the takeover.
5. Switch the money flows. Open the association's bank account early, tell all owners in writing to pay maintenance only to the association from the takeover date, and ask the builder to stop billing from that date.
6. Post-takeover claims. Pursue the unspent balance, interest and unpaid outgoings as a money claim: first a demand, then RERA for a registered project, or the consumer or civil route otherwise.

Some builders keep billing through their facility agency because maintenance is profitable and control delays other handovers. Then:

• File a complaint with your state RERA authority (K-RERA in the example) citing Section 11(4)(d): the association has taken over or is ready to, and the promoter is obstructing. Ask for a direction to hand over maintenance, accounts and the surplus, with penalty.
• Where RERA does not apply, the association can move the consumer commission for deficiency in service, or the registrar under the state act where the dispute is with a society organ.
• Keep paying nothing to two parallel billers. Owners should pay the association once it lawfully takes over; document that instruction, because the builder's agency may threaten service cuts. Disconnection threats over disputed control are worth recording and raising in the complaint, and if essential supply is actually cut, see electricity connection problems at possession.

The builder's books are private, but takeover disputes touch public records:

• BESCOM or your DISCOM, and the water board: in whose name the common-area connections stand, arrears on those meters, and security deposits. Builders sometimes leave lakhs of unpaid common-meter bills behind; an RTI reply showing arrears on the takeover date is strong evidence for your money claim.
• Municipal corporation (BBMP in the example): property tax payment status for unsold flats and common areas during the builder-run period, which Section 11(4)(g) keeps on the builder.
• Registrar of Societies and the state RERA: your association's filed records, and the promoter's project filings.

Use RTI online or the state RTI portal, and a first appeal for silence.

No. The trigger is the association's readiness to take over, not his sales. For unsold flats the builder pays maintenance to the association like any other member.

Get the flat-wise defaulter list in the handover pack. Arrears for the builder-run period are generally the builder's to recover unless assigned to the association in writing; do not let an unverified arrears figure inflate the closing settlement either way.

No legal compulsion in most cases; the staff usually belong to the builder's agency. Decide on merit, but verify EPF and ESI compliance before taking anyone on the association's rolls.

Possible but provable only with audited statements and bank records. Demand them, recompute, and treat unsupported deficit claims as a negotiating tactic. RERA complaints have a way of shrinking such deficits.

The corpus or IFMS is a separate reserve and follows its own handover with interest. That dispute has its own guide: corpus and accounts handover.

Risky. Services still cost money and non-payment hurts the association's case. Pay the lawful biller, in most takeovers the association from the notified date, and keep receipts.

• Corpus fund and audited accounts not handed over
• Common areas handover under RERA Section 17
• Maintenance demanded before possession or OC
• Builder not forming the society
• All practical guides

Download the maintenance takeover checklist (PDF).