Rwa formation in housing society

BN (Querist) 07 September 2021 This query is : Open
I am a flat owner cum resident of a gated community in Hyderabad, the society having nearly 750 flats. Currently the project is not fully completed but builder has started collecting maintenance which it is maintaining through 3rd Party (external agency) by 2 years advance funds collected from flat owners. Even though people have been residing in their flats since more than 2 years and registration of 90% of the flats completed, the builder has been deferring / postponing the RWA formation citing various reasons. Their main idea is to enjoy the huge amount of Corpus Fund and its interest for a maximum possible period. Builder is also earning money from the clubhouse, renting out the facilities to outside parties, etc without sharing the details of income and expenses with the flat owners. I have a doubt that this money will be pocketed by the builder.
I have the following queries:
1. What the law says on rules and conditions of RWA formation, what percentage of registrations to be completed to be eligible to form RWA, etc.
2. What are the remedies available in case RWA formation / transfer of corpus fund and other income to RWA is deliberately delayed by builder.
Request the experts on this platform to please give their valuable suggestions.
Thanks in advance

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Quick Summary

Flat owners in a Hyderabad gated community are facing delays in the formation of their Residents' Welfare Association (RWA) by the builder, who is allegedly withholding the corpus fund and other income for financial gain. Despite most registrations being complete, the builder continues to postpone RWA formation, citing various excuses. The owners are seeking legal guidance on RWA formation rules and remedies to ensure the transfer of funds and control of the society.

kavksatyanarayana (Expert) 10 September 2021
All the owners of the gated apartment shall form an association of RWA. Some owners have to take steps that all owners have to come forward for forming association and then make rules with aims and objects of the bylaws. At least 7 members are required for the Executive Body. The remaining are general members. Get the format in the Dharani portal (Telangana registration portal) to know the remaining required and format bylaw.

BN (Querist) 11 September 2021
Thanks for your response Sir.
The Bylaws are drafted by builder and circulated to owners. There were some points of dispute and were discussed with builder to modify them. Orally they have agreed but they have not shared final copy. This is continuing since 2 years, builder want to pass time and keep control of society for financial gains and promoting their new project. Flat owners want the builder to initiate the RWA process because if the flat owners do it on their own, builder will not recognize it and transfer of corpus fund will be delayed on that pretext. Corpus fund is a huge amount nearly 7.5 cr and owners fear that they may have to run around courts to get the amount if owners form association on their own.
Of late, it came to our knowledge that builder along with some flat owners (who are builder's relatives and friends) without informing all the owners has already registered a association for power and water connection purpose.
Please advise how to resolve the above issues.
Thanks & regards

kavksatyanarayana (Expert) 12 September 2021
If you want to amend/modify the bylaws, call for the meeting of all the members. If not agreed, complain to RERA.

BN (Querist) 16 September 2021
Dear Mr. Satyanarayana,
You did not get my point what I wanted to convey.
Builder deferring the RWA formation process since 2 years on various pretexts. builder want to pass time and keep control of society for financial gains and promoting their new project. Flat owners want the builder to initiate the RWA process because if the flat owners do it on their own, builder will not recognize it and transfer of corpus fund will be delayed on that pretext. Corpus fund is a huge amount nearly 7.5 cr and owners fear that they may have to run around courts to get the amount if owners form association on their own.
Our project is not RERA approved. It is pre RERA project.
Request to please suggest suitable options / solutions based on above information.
Thanks in advance.

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