What To Do When You Don't Have An RWA?

What To Do When You Don't Have An RWA?

What To Do When You Don't Have An RWA?
Developers are a key sector stakeholder and for the faster implementation of projects, authorities must have them on board. (Advocateji)

TR Thapa purchased a newly-constructed apartment on Sohna Road in Gurgaon. He moved into his new house in the 24-storey housing complex with dreams in his eyes. But, his excitement was short-lived when he came to know that many facilities in the apartment complex were not operational. Residents used to get water from tankers and electricity from generators. Maintenance charges were high and he had to pay Rs 200 for his car parking slot despite 'buying' the space from the developer. When he thought of taking his grievance to the residents' welfare association (RWA), he was told that were no such body.

With a number of societies dotting the periphery of metros, a large number of these thinly-populated housing complexes do not have RWAs. Ideally, the formation of the RWA should be initiated by the developer. Often to retain the control of maintenance and other charges, they resist the formation of the RWA.

Although the Real Estate (Regulation and Development) Act, 2016, makes the formation of an RWA within three months after a majority of residents have booked their homes, as mandatory. Chapter 3 Section 11 of the Act says, “Provided in the absence of local laws, the association of allottees, by whatever name called, shall be formed within a period of three months of the majority of allottees having booked their plot or apartment or building, as the case may be, in the project.”

It is to be noted that the formation or registration of an RWA is not mandatory, it has to be registered if it aims to collect money from residents.

Forming a strong link

If your developer does not take steps to form an RWA, residents themselves can form a body. Once reasonable number of people have booked their flats, project maintenance can be handed to them by initiating the formation of an RWA.

An association of people who own houses in a particular society, an RWA is responsible for the day-to-day functioning of the complex. The rule says that a developer has to hand over a building to residents within a few months of getting the occupancy certificate.

How to form an RWA?

The developer and residents can mutually call for an annual general body meeting to form an RWA. The Societies Registration Act 1860 mandates that at least 10 members should give their names to the memorandum of association, who will occupy posts in the management body. If more residents are interested in becoming members, then elections have to be conducted.  

The think tank can make rules based on suggestions by residents and according to the rules. Known as society bylaws, every housing society has different set of laws governing them which are binding on each and every resident.

Once the ad-hoc committee or a management committee is in place, the next step is to verify documents, books of accounts and facilities promised by the developer. Among the important documents that the committee needs to see are occupancy certificate, fund details, books of account, property title, deposits received for different facilities such as club, gym, spa and others. 

How to manage?

The residents' body can manage its own affairs or hire an external agency. Many local as well as international property advisors provide such services. The average cost of professional residential project management varies across agencies and the type and location of the project. Even if getting an external party to manage things, members should take a keen interest in the way it works, especially books of accounts.

For maintenance, all expenses incurred are clubbed and a per-sq-ft cost is determined. House owners may be charged as per their unit size or at a uniform rate.

The real estate bill, yet to be enforced, pins the responsibility on developer for providing and maintaining essential services, as specified in the service level agreements, on reasonable charges, till the residents' association can take over. 

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