In a significant ruling clarifying the financial responsibilities of promoters and housing societies, the Gujarat Real Estate Regulatory Authority (GUJRERA) has held that builders are not required to pay the lifetime maintenance deposit for unsold units. The authority clarified that such one-time deposits must be collected from the eventual buyers of those units.
The order was passed by Dr. M.D. Modia and M.A. Gandhi while hearing a dispute related to the Shivay residential apartment project near Amitnagar Circle in Vadodara.
Dispute Over Maintenance Deposits
The case arose after the society’s vice president filed a petition seeking relief on several issues, including a demand that the builder deposit ₹4 lakh as lifetime maintenance charges for two semi-finished and unsold flats.
The society argued that since the units remained unsold, the promoter should contribute the lifetime maintenance corpus to the association.
Clear Distinction Between Running Maintenance and Maintenance Deposit
While deciding the matter, GUJRERA made an important distinction between:
1) Running Maintenance Charges
These are monthly expenses required for the functioning of the society, such as security, cleaning, electricity for common areas, and repairs.
The authority held that builders are liable to pay running maintenance charges for all unsold units until those flats are sold and handed over.
2) Lifetime Maintenance Deposit
This is a one-time corpus amount collected from each buyer at the time of purchase for long-term maintenance.
GUJRERA ruled that this liability rests with the future buyer, not the promoter.
The authority noted that this interpretation is consistent with earlier rulings, including the Casa Vyoma project in Vastrapur, Ahmedabad, where developers were directed to bear operational costs for unsold flats but not the one-time corpus deposit.
Ruling on Shivay Apartment Dispute
In the specific case, the promoter explained that the project originally consisted of 52 flats, of which two remained semi-finished and unsold.
The GUJRERA bench ruled that:
-
The society cannot demand lifetime maintenance deposits from the promoter for these units.
-
The deposit must be collected from the buyers when the flats are eventually sold.
Maintenance Corpus Shortfall Issue
Another dispute involved an alleged ₹10 lakh shortfall in the maintenance corpus handed over to the society.
The builder submitted that:
-
₹4.35 lakh had already been spent on maintenance works with proper bills.
-
The remaining ₹5.65 lakh represented unpaid dues from individual members.
Since the society’s president and secretary had signed a handover agreement acknowledging these arrears, the authority ruled that:
-
The builder was entitled to deduct the amounts already spent.
-
The society must recover the balance from defaulting members.
Construction Quality and Amenities Dispute
The society also raised issues related to:
-
Leakage and dampness
-
Alleged poor construction quality
-
Absence of promised amenities such as:
-
Children’s play area
-
Landscaped garden
-
In its final order, GUJRERA directed the builder to:
-
Install playground equipment in the children’s area
-
Lay paver blocks in the garden
-
Complete these works within three months
-
Provide property documents to any member requesting them
However, the authority rejected the society’s broader claims seeking compensation for construction quality issues and refund of the alleged maintenance shortfall.
This decision provides clarity on a frequently disputed issue between promoters and housing societies. It establishes that:
-
Builders must bear running maintenance costs for unsold units.
-
But lifetime maintenance deposits remain the responsibility of future buyers.
-
Societies must recover arrears from defaulting members instead of shifting the burden to the promoter.
The ruling is expected to reduce disputes over maintenance corpus contributions and bring greater clarity to financial obligations in housing societies.
