Give back corpus fund to owners’ assn, TNREAT tells promoter

CHENNAI: Ruling in favour of apartment owners’ association, the TN Real Estate Appellate Tribunal (TNREAT) has dismissed filed a promoter’s appeal and directed the association to withdraw 70% of the Corpus Fund as the association is maintaining their residential tower.

Hiranandani Amalfi Owners Association in Egattur filed a complaint against Hiranandani Realtors with the Tamil Nadu Real Estate Regulatory Authority (TNRERA) seeking directions to hand over of documents, 70% of corpus fund and other reliefs.

While hearing the case, TNRERA observed that the project comprises 6 towers in phase-1 and 7 towers in phase-2, while Amalfi tower is part of phase-2. The promoter contended that the corpus fund was created for the maintenance of the entire township project that spread over 120 acres comprising various common amenities, commercial spaces, schools and others. Promoter also stated that they have an inherent and manifest discretion to decide as to whom they should nominate to receive the remaining corpus fund. “There is no agreement or privity of contract between the promoter and association for refund of the corpus fund,” the promoter contended.

After hearing both sides, TNRERA observed that as per the construction agreement, allottees of Amalfi building should handover Rs 98,500 each to the promoter as corpus fund. After utilising the corpus fund towards major infrastructure maintenance, the promoter should transfer the residual amounts after deducting the expenses incurred without any interest, according to the agreement.

However, the association of allottees in Amalfi is maintaining the common areas from January 1. TNRERA directed the promoter to transfer 70% of the corpus fund after deductions to the Amalfi association, and the remaining to the apex body of individual towers association after completing the project.

Aggrieved by the order, the promoter preferred an appeal in front of TNREAT. The Tribunal observed that 70% of corpus fund amounts to Rs 1.23 crore. “The appellant/promoter had admitted that the Amalfi tower forms part of the entire township project. Simply because the Amalfi tower was registered as a standalone project with TNRERA by suppression of facts, it cannot be held as a standalone project,” Tribunal observed. Apart from dismissing the appeal, the Tribunal said that the association is entitled to withdraw the entire amount deposited by the promoter as 70% corpus fund with accrued interest as the promoter deposited it before filing the appeal.