Society formation charges

chaman srivastava (Querist) 25 February 2021 This query is : Resolved
Hi,

I bought an 2000 sqft NA plot in a gated community spanning over 33 acres. There are amenities being provided by the builder/promoter of the said land. They will be starting to ask for maintenance charges for 1 year at 1rs /sqft once all the work is done from their side( as per RERA, scheduled to be completed by June 2021).

They are also asking us to pay 35000 rs as a charge from all the plot owners to form a society after a period of 1 year (most likely by June 2022) once the maintenance period is over.
There are a total of 400 plots, which means builder would be collecting around 1.4 cr from us in the name of society formation charges. Is this legal to ask this much amount for the formation of society? If no, what are the actual charges for this?

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A homeowner in a new gated community is questioning the legality of the builder's demand for a substantial 'society formation charge' of Rs. 35,000 per plot owner. With 400 plots, this amounts to a significant sum, and the homeowner suspects it's excessive. Advice suggests that forming a society doesn't require such high fees, and owners can initiate the process themselves, potentially costing much less. It's recommended to request a breakdown of expenses or refuse the charges, as an association can be formed independently of the builder.

Guest (Expert) 25 February 2021
You need not wait for Builders to form an Society. In many States including Delhi and Maharashtra 10 Plot/Flat owners are Enough to form an Society

chaman srivastava (Querist) 25 February 2021
Hi Sir,

Which is fine, but he is mentioning in the sale deed that we would have to pay 35,000 and asking us to sign it.

chaman srivastava (Querist) 25 February 2021
Also what is the legal charges to form a society? Is it a fixed cost or varies as per number of plots / flats etc.?

Guest (Expert) 25 February 2021
Once you Sign you have to follow that.

chaman srivastava (Querist) 25 February 2021
And that is why I am asking what are the charges to form a society? 1.4 cr seems like too much

kavksatyanarayana (Expert) 27 February 2021
To form a society, to my best, it will cost a maximum of Rs.5000/-. The charges of registration of housing society vary from one State to another State.

chaman srivastava (Querist) 27 February 2021
Thank you for the information - I believe 1.4 cr is not needed then

chaman srivastava (Querist) 27 February 2021
I have asked to changed the text and sentence as “to give the share as pro rata basis”

T. Kalaiselvan, Advocate (Expert) 27 May 2021
You can refuse to pay the exorbitant charges demanded by the builder to form the society or association.
You can ask for the break up of the expenses to form the association.
If he is not willing to disclose the expenses or to reduce the charges, you can inform other members to not to pay the formation charges, because an association can be formed by members themselves without the help of the builder.
You need not wait for the builder to handover the apartments to form a R W association.

Once an association is formed you will be a legal entity which will enable you to demand all that which are incomplete from the builder and can even drag him to the consumer court for delay in completion of the incomplete amenities.

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