What is the Corpus Fund and What are the Rules in the Cooperative Housing Society?
A corpus fund, often known as a capital fund, is the money set aside to ensure an organization or entity can continue to operate, exist, and sustain itself. These funds are not used to achieve specific objectives but are built up through voluntary contributions.
What is the Society Corpus Fund?
The corpus fund serves as a financial reservoir for the upkeep, maintenance, and redevelopment of shared amenities and infrastructure within housing societies.
The corpus fund’s financial reservoir for the upkeep to manage amenities, common areas, utility bills, maintenance, and cleaning. The developer mainly collects this fund to maintain the amenities and facilities. The developer must hand it over to the managing committee once the committee is formed.
Benefits of Corpus Fund in Housing Societies
The benefits of society corpus funds are:
Increasing Property Values
This fund is mainly used to maintain and upkeep the society. Any well-maintained society will attract buyers and tenants.
Promotion of Social Cohesion
Societies might use this fund to organize welfare programmes, community events, and social initiatives.
Financial Stability
Society Corpus funds can also be used during emergencies or any unforeseen circumstances. Developers can use this fund to maintain financial stability independently without relying on external financial sources.
Formation of Corpus Fund in Cooperative Housing Societies
Creating a society corpus fund is essential for maintaining the shared amenities and infrastructure in a residential community. This fund is created through contributions from property owners, which can be collected in various ways—annually, quarterly, or monthly. It can also be a percentage of the property’s sale price, required from the buyer at the time of purchase. In the case of under-construction projects, developers sometimes attract buyers with schemes that offer maintenance-free periods, delaying the need for immediate contributions to the corpus fund.
Uses of Corpus Fund in a Housing Society
The corpus fund in a housing society is used for many purposes:
Maintenance and Repairs
Society Corpus Fund is used to repair and maintain shared facilities such as elevators, lobbies, swimming pools, gardens, and community halls.
Latest Developments
This fund can help in any expansion or new construction projects within the community, such as building a temple or other facilities. It also provides the necessary capital to initiate these developments without any external funds or loans.
Upgradation of Infrastructure
The corpus amount can be used to install energy-efficient systems, improve security measures and upgrade amenities.
Rules and Regulations Governing Corpus Fund in Housing Societies
According to the model bye-laws of Maharashtra, a premium ranging from Rs 10,000 to Rs 25,000 can be charged for the transfer of property rights, applicable once the society is established. Builders calculate the society corpus fund based on the square foot, often amounting to over Rs 1 lakh. After the housing society is officially formed, this corpus fund can be transferred to the Sinking Fund, which covers major repairs, reconstruction, structural additions, or redevelopment.
Many societies choose to collect a substantial corpus fund from each owner, using the generated interest to maintain amenities for years, only charging for additional repairs and replacements. The society’s general body has the authority to set its own rules regarding the amount, investment, and utilization of the fund. Homeowners seeking clarity on the fund’s specifics can request a copy of the bye-laws from the society’s office and review the annual financial report.
Society Related Article:
| Housing Society Fund Utilisation |
| Franking Charge |
| Automatic Boom Barrier |
| Common Area Maintenance Charges |
| Gated Community |
Note: Also you check the the details of society accounting system here.
FAQs
Q. How is the amount of corpus funds decided by the society?
A: The society corpus fund is decided by the society based on the property size and planned improvements.
Q: Who decides how the corpus fund is to be spent?
A: The general body of the housing society decides on the use of the corpus fund.
Q: Is the corpus fund refundable if I move out?
A: No, the society corpus fund is not refundable even if you move out but rules may vary from society to society.
Q: Can the corpus fund be used for daily maintenance?
A: No, the corpus funds are used for significant repairs and improvements.
Q: Where can I find information about how the corpus fund is used?
A: You can request a copy of the society’s bye-laws and review the annual financial report for detailed information.