Maintenance, Corpus and Sinking Fund: What Your Bengaluru Builder Owes at Handover

Two years after moving into a gleaming tower off Sarjapur Road, the residents we heard from were still not in control of their own building. The owners' association had never been properly formed, the corpus fund they had each paid at handover had no clear accounting, and the builder still ran the maintenance, and the lifts, on his own terms. When a major repair came up, no one could say how much money was in the kitty or who was supposed to sign the cheque. The flats were lovely. The handover had never really happened.

The short answer. The corpus fund and sinking fund a builder collects from flat buyers are the buyers' money, meant to run and repair the building through an owners' association. Under the Real Estate Act, the promoter must maintain the project until that association is formed, and then transfer the maintenance and corpus balances to it with an audited statement. A Bill introduced in Karnataka in August 2026 would go further, proposing handover of documents and funds within sixty days of the occupancy certificate and requiring builders to pay maintenance on unsold flats. The trade off is that a clean handover needs buyers to organise early, because a delayed one quietly drains the very fund you paid into.

What you actually pay: maintenance, sinking fund and corpus

A new flat comes with more than a price, it comes with a set of recurring and one time charges that fund the life of the building. Monthly maintenance covers the day to day running, such as security, housekeeping, common area power, water and lift upkeep, and is usually charged per square foot of your flat or as a flat rate. On top of that, buyers typically pay a corpus fund and contribute to a sinking fund, which are reserves rather than running costs.

Understanding what each charge is for matters, because it tells you whether you are paying a fair operating cost or quietly handing the builder a large reserve with no accounting. A buyer who reads the maintenance and handover terms in the agreement before signing is far better placed than one who discovers the numbers only when the first demand note arrives.

Whose money is it, and what the builder owes

The crucial principle is that these funds belong to the buyers collectively, not to the builder. The corpus and sinking funds are collected to secure the building's future, and the law treats them as the owners' money held in trust until the community can manage it. Under the Real Estate Act, the promoter is required to maintain the project until the owners' association is formed, and then to transfer the balance in the maintenance and corpus accounts to that association, accompanied by an audited statement of what was collected and spent.

That audited statement is the part buyers most often forget to demand, and it is the part that protects them. Without it, there is no way to know whether the corpus you paid still exists in full. When you buy, treat the promise of a clean, audited handover of funds as a term of the deal, not a courtesy you hope for later.

It also helps to know roughly what you are handing over. In a large Bengaluru project, the corpus and sinking contributions collected across hundreds of flats can add up to a very substantial pool, often running well into crores. That scale is exactly why the accounting matters. A fund that would be trivial to track for a single owner becomes, across a whole tower, a serious sum whose safekeeping decides whether the building can afford a new lift or a fresh coat of paint a decade from now. Treating it casually at handover is how communities end up levying sudden, painful special charges later.

The handover: documents, funds and the association

A real handover is more than handing over the keys to the clubhouse. It means forming the owners' association, executing the necessary transfer deeds, and passing on the full set of project documents, from approved plans and warranties to maintenance agreements and the fund accounts. It also means transferring the actual money, the maintenance balance, the security deposits and the corpus, with accounts that add up.

Buyers have more power here than they realise, but only if they organise. The sooner residents come together to form the association and formally ask for the handover, the harder it is for a builder to keep control by default. Our guide on the law behind your Bengaluru apartment association explains how these associations are constituted, which is the first step to claiming what the community is owed.

The current law and the 2026 Bill

Today, apartment ownership and management in Karnataka is governed mainly by the older Karnataka Apartment Ownership Act and related law, alongside the Real Estate Act's duties on promoters. That framework is now under reform. A Karnataka Apartment Ownership and Management Bill was introduced in the state Assembly in August 2026, and if passed it would replace the decades old apartment laws with a more modern regime.

Two proposed changes matter most to buyers. The Bill would require builders to hand over documents, warranties and funds to the association within sixty days of receiving the occupancy certificate, and it would make builders pay maintenance charges on flats that remain unsold rather than leaving paying owners to subsidise them. Because the Bill was still moving through the legislature, confirm its current status before you rely on any specific timeline, but the direction of travel clearly favours the buyer. To understand why the occupancy certificate is the trigger point, see our guide on the occupancy certificate and completion certificate.

What each charge is for

Because the charges blur together on a demand note, it helps to separate them. The table below sets out the common items a Bengaluru buyer meets, what each is for, and what to watch.

Red flags at handover

A few warning signs tell you a handover is going wrong. The association has not been formed years after occupation, or the builder resists forming it. There is no audited statement of the corpus and sinking funds, or the numbers do not reconcile with what residents actually paid. The builder continues to control maintenance contracts and vendors long after most flats are sold and occupied. And the security deposits or corpus simply cannot be traced.

Any one of these is a reason to push, together and in writing, for a proper handover. For a flat still under consideration, a well run project such as Sattva Lumina is the kind of development where you should ask, up front, exactly how and when the association and the funds will be handed over.

Your maintenance and handover checklist

Run these seven checks around maintenance, funds and handover before and after you buy.

1. Read the maintenance, corpus and sinking fund terms in the agreement before signing.
2. Confirm how monthly maintenance is calculated and what it does and does not cover.
3. Get in writing that the corpus and funds will be transferred with an audited statement.
4. Join or help form the owners' association as early as residents reasonably can.
5. Ask for the full handover set: plans, warranties, agreements and fund accounts.
6. Check whether the builder is paying maintenance on any unsold flats they hold.
7. Have a lawyer review the handover terms and the audited fund statement.

The bottom line for a Bengaluru buyer is that the corpus and sinking funds are yours, and a proper handover is a right, not a favour. Read the fund terms before you sign, insist on an audited transfer of funds to a properly formed association, and organise early with your neighbours. The building runs on money you paid, so make sure that you and your neighbours, and not the builder, end up holding the accounts and the keys to your own home.

Frequently asked questions

Whose money is the corpus and sinking fund I pay the builder?

It is yours, collected from buyers to run and repair the building. Under the Real Estate Act, the promoter maintains the project until the owners' association is formed, and must then transfer the balance in the maintenance and corpus accounts to that association, along with an audited statement. It is not the builder's income to keep or spend freely.

When must a builder hand over the building to the association?

Under current practice the promoter maintains the project until the association is formed and then transfers the funds and records. A Bill introduced in Karnataka in August 2026 would tighten this, proposing that builders hand over documents, warranties and funds within sixty days of receiving the occupancy certificate. Confirm the current position before you rely on it.

What is the difference between corpus fund and sinking fund?

A corpus fund is a one time amount collected at handover, meant as a long term reserve for the building. A sinking fund is built up over time from regular contributions, set aside for major future repairs like lifts, painting or plumbing. Both belong to the owners collectively, and both should be transferred to the association with clear, audited accounts.

Do builders have to pay maintenance on unsold flats?

Under existing practice this is often disputed, with builders reluctant to pay for flats they still hold. A Bill introduced in Karnataka in August 2026 proposes to make builders pay maintenance charges on unsold units, which would relieve paying owners of subsidising the developer. Until it is in force, check what your agreement and association rules say.

Last updated 2026-09-28. PropNewz Team.