Residents of a large complex in north Bengaluru discovered in 2026 that their builder, four years after handing over flats, still controlled the maintenance accounts, had never transferred the land khata to their association, and was sitting on a corpus fund the buyers had paid into. It took a ruling from the state regulator, ordering the transfer within ninety days, to force the handover. The residents had paid for assets that were legally theirs, but had never actually received them, because nobody had insisted on it at the right moment.

What a builder owes an apartment association at handover is one of the least understood parts of buying a flat, and getting it wrong costs residents money and control for years. This guide explains the corpus fund, the sinking fund, the maintenance charge, and the common area handover, and how a Bengaluru buyer should think about each of them well before possession.

The short answer. At handover a builder must transfer the common areas, the corpus fund, the maintenance account balances, and the project documents to the owners' association, and under RERA the association is meant to be formed within about three months of the majority of units being booked, as a RERA handover guide explains. A proposed Karnataka Apartment Bill in 2026 seeks to tighten these duties further. The trade-off to remember: these are your assets as an owner, but you only receive them if the association is formed and insists on a proper handover.

What is the corpus fund and who does it belong to?

The corpus fund is a one time amount collected from buyers, usually at possession, meant to be held for the long term needs of the building and handed to the owners' association. It is not the builder's money to keep; it is a reserve contributed by the owners, and at handover it should pass to the association along with a clear account of what was collected. Think of it as the community's own savings pot, funded by every buyer at the start, meant to sit in reserve for large or unexpected future costs.

Because the corpus is a lump sum that sits untouched for years, it is exactly the kind of asset a builder can quietly retain if residents do not ask for it. The regulator has had to step in where builders failed to transfer the corpus fund, the maintenance accounts, and the land records to the association. So a buyer should know that this fund exists, that it belongs to the owners collectively, and that receiving it, with a full statement of the interest it has earned while parked, is one of the specific things the association must secure at handover.

How is the corpus different from the sinking fund and maintenance?

The three are often confused, but they do different jobs. The corpus fund is a one time reserve for the long term. The sinking fund is money set aside periodically, from regular contributions, to pay for major repairs and replacements down the line, such as repainting the building or replacing a lift. The maintenance charge is the recurring monthly amount that covers day to day running costs, security, housekeeping, common area electricity, and the like.

Keeping them separate matters for how a building is run. The maintenance charge funds the present, the sinking fund prepares for predictable big expenses, and the corpus is a deeper reserve for the unexpected or the long term. A well run association holds all three in clear, separate accounts, and a buyer moving into a new project should expect the builder to hand over the corpus and any maintenance balances rather than roll them into an opaque single pot.

Buyers often meet these terms for the first time on a payment demand, where the corpus and an advance maintenance deposit appear as large one time figures near possession. It is reasonable to ask the builder, in writing, how each of these amounts is calculated, where it will be held, and how it will be accounted for and transferred to the association. A builder who answers these questions clearly is one you can trust with the handover, and vague answers at this stage are a signal to watch the transfer closely later.

What must a builder hand over to the association?

A builder must hand over the common areas, the funds, and the full set of project documents to the association. The common areas include the lifts, lobbies, staircases, fire escapes, terraces, parks, and play areas, and their title should pass to the owners collectively. The financial handover covers the corpus fund and any advance maintenance balances, along with detailed financial statements showing what was collected and spent.

The documents are just as important. The builder should hand over the original title records, the sanctioned building plans and all approvals, the fire and pollution clearances, the technical drawings for the electrical, plumbing, and mechanical systems, and the equipment warranties and service contracts. Under RERA, common areas are generally to be handed over within about thirty days of the occupancy certificate in the absence of a specific local law, and the builder typically remains responsible for maintenance during an initial period under the association's supervision.

When should the association be formed?

The owners' association should be formed early, within about three months of the majority of units being booked, so it exists to receive the handover rather than scrambling afterwards. An association that is in place before possession can insist on a proper transfer of the corpus, the accounts, and the common areas, and can conduct the technical and legal due diligence that a handover deserves. Where residents leave the association until years later, the builder often continues to control assets that should already be theirs.

Karnataka is moving to strengthen these duties. A Karnataka Apartment Bill introduced in the state assembly in 2026 proposes, among other things, that builders hand over all project documents and funds to the association within sixty days of the occupancy certificate, pay maintenance on unsold flats, and not restrict owners' use of common areas. As a proposed law its final shape may change, and until it is passed the current rules under RERA and the existing apartment ownership law continue to apply, but the direction is clear: the obligations on builders at handover are tightening, and buyers should expect and demand a clean transfer.

How do these funds and assets compare?

The table below sets out the main items a builder should hand over and who they belong to.

Read down and the pattern is that almost everything on this list belongs to the owners, not the builder. The builder collects and holds some of it during construction and early occupancy, but at handover it is meant to pass to the association. Knowing this is what lets residents ask the right questions rather than accept whatever the builder chooses to transfer. The single most useful habit is to treat handover as an event to prepare for, with an active association and a checklist, not a favour to wait for.

What is the step by step for a Bengaluru buyer?

Work through this order as your project nears possession:

1. Ask the builder how much corpus fund is being collected and on what terms.
2. Push for the owners' association to be formed early, around majority booking.
3. Confirm the corpus, sinking fund, and maintenance are held in separate accounts.
4. At handover, insist on the transfer of the corpus and maintenance balances.
5. Collect the common area title, approved plans, warranties, and technical drawings.
6. Have the association do technical and legal due diligence before accepting handover.
7. If the builder withholds assets, raise it with the regulator as other residents have.

Handover connects to the wider legal picture of your building. Understand the law behind your association in our guide to the Karnataka Apartment Ownership Act and societies registration, and confirm the certificate that should trigger handover with our explainer on the occupancy and completion certificates. If you are buying into a project such as Embassy Knowledge Park Villas in Yelahanka, ask about its association and corpus handover plan early.

Frequently asked questions

What is a corpus fund in an apartment?

A corpus fund is a one time amount collected from buyers, usually at possession, and held as a long term reserve for the building's major or unexpected needs. It belongs to the owners collectively, not the builder, and should be transferred to the owners' association at handover along with a clear account. It is separate from the recurring monthly maintenance charge.

What must a builder hand over to the apartment association?

A builder must hand over the common areas such as lifts, lobbies, and parks, the corpus fund and maintenance account balances, and the project documents, including approved plans, approvals, warranties, and technical drawings. Under RERA the common areas are generally handed over within about thirty days of the occupancy certificate, and the association should conduct due diligence before accepting the handover.

What is the difference between corpus and sinking fund?

A corpus fund is a one time reserve for the long term, collected once from buyers. A sinking fund is built up periodically from regular contributions to pay for major future repairs and replacements, such as repainting or a lift overhaul. The monthly maintenance charge is separate again and covers day to day running costs. A well run association keeps all three in separate accounts.

When should an apartment owners association be formed?

The association should be formed early, within about three months of the majority of units being booked, so it exists to receive the handover of assets and funds. An association in place before possession can insist on a proper transfer and conduct due diligence. Leaving it until years later often lets the builder keep control of assets that should already belong to the owners.

Last updated 2026-08-23. PropNewz Team.