Residents vs builders: A tale of two 'societies'

In most NCR residential apartments, residents wage a running as builders refuse to ‘cede power’ and hand over building maintenance


Puja Bhattacharjee | June 6, 2013

While the real estate (regulation and development) bill, cleared by the union cabinet on June 4, is a welcome step for home buyers who are perennial victims of builders’ whims, a major section of consumers still awaiting deliverance is existing buyers, who might have moved into their dream flats in apartment complexes but say they are still being bulldozed by builders.

One major complaint for this section is the builder’s, or his representatives’, refusal to leave maintenance of housing societies even after the flats have been allotted and a residents’ welfare association (RWA), or a variant on similar lines, have been formed. The reasons, residents and RWA office-bearers allege, are many: from builders’ aim to retain some control over the property right down to control over the one-time fund pool collected from residents that might run into lakhs, if not crores, and monthly payment of maintenance fee.

The builder versus resident battle over maintenance is a menace prevalent deep and wide in the NCR. Governance Now visited two housing societies to find out the fight, and how it might be won:


Now 67, RK Patney never imagined the troubles that awaited him at his upscale apartment building in Gurgaon. Retiring from his job at a tea plantation, Patney bought an apartment in Uniworld Gardens in 2007 and moved in the same year.

“The facilities were inspiring: a swimming pool, tennis and squash courts, party hall, green lawns and a club house,” he says. It looked just perfect for a post-retirement life.

But things started going awry after the honeymoon period of three years. The board members (RWA) have been trying to take over maintenance of the society from the builders since then, but to no avail. 

Alleging a “total breakdown” of maintenance, Patney counts the woes: “Security is abysmal due to non-payment of dues. The guards leave at regular interval and there have been several thefts. None of the security cameras installed at the lobbies, apartment gate and parking spaces works. The boom barriers have been out of order for long, meaning anybody can drive in and out. A fourth of the elevators in the eight towers do not work.

“As per government guidelines an automatic retrieving device (ADR) has to be installed in elevators to enable a person reach the next floor in the event of power cut, or an emergency.  But ADRs here are non-functional due to lack of batteries and maintenance – people have remained stuck in the elevator for nearly half an hour at times.”

Patney, a member of the compliance committee of RWA, says the staff for maintenance is far less than required. “We pay for 10 people but only four have been hired. The remaining money is siphoned off by the builder. Besides, the few who are employed are not even paid minimum wages,” he claims.

Stressing that Unitech had “agreed to hand over maintenance to us (RWA)” following a meeting with top company officials, Patney says each resident paid them an interest bearing maintenance security, called sinking fund, of about Rs 50,000 for use in emergency. With an 8.5-percent interest, the prevalent bank interest, for a period of six years the amount stands at Rs 9 crore.

As per norms, the sinking fund has to be handed over to residents once they take over.

“Unitech had agreed to give us the sum through post-dated cheques. But we refused since they were not providing any bank guarantee,” Patney says. “Thereafter, they proposed to give us the fund in three equal instalments starting March 2013. The agreements had been drawn up but they (Unitech) stalled at the last moment.

“They have been stalling ever since.”

Pointing out the maintenance snags, Patney says: “The building has got severe seepage problems from the beginning, and that has not been fixed. Power supply is also a problem. Our sanctioned load is 5 MW but we get only 2.5 MW. As a result, we are paying Rs 1.50 extra per unit from the day we moved in. The builder has cut the load to save money.”

He says only 1.5 MW was installed initially, with 1 MW added a few months ago after protest by the residents.

With the builder not ready to yield, Patney says the only option left with them is to ask residents to pay maintenance to the board instead of the builder: “We will propose in the annual general meeting that residents should give the board six months maintenance in advance so that we can take over.”
The members are also contemplating legal action, he adds.


Residents of Gateway Towers in Vaishali Sector-4 in Ghaziabad have a similar story to tell but with a twist. An RWA spokesperson who spoke to Governance Now on the condition of anonymity says according to an agreement they had with the builder, Suneja Builders Pvt Ltd, the residents were supposed to take charge of maintenance from 2009.

“The builder was making profits from the maintenance charges and refused to hand over on the pretext that the RWA was not competent,” the spokesperson says.

Beginning their protest from August 2009, the residents took legal recourse after a negotiation attempt through the district magistrate failed to clear the deadlock.

After almost a year long legal battle, and much muck-raking, the builder and the residents came to an understanding. “He (builder) handed over the maintenance but in return we had to give him a part of the community hall which he wanted to use for commercial purposes. He also retained the building’s basement,” the spokesperson says.

Three years on, he says the builder now wants to sell both the basement and the shops constructed in the space for the community hall to the residents. “It was an illogical idea to begin with: who will buy shops inside a residential complex? But that is the builder’s headache now; we do not have the fund to buy the shops and the basement,” he says.

A resident (name withheld on request) says it was easy for them to wrestle control as Suneja is a relatively small builder. But the problem is increasingly becoming gigantic in scope for residents in most localities in NCR, he adds.

But the shadow of the builder still lurks over Gateway Towers. “He has put towers on rent on the roof illegally and has sold illegal parking spaces,” the spokesperson says. Besides, he adds, the residents are yet to get completion certificate from Ghaziabad Development Authority.



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