Krishnan lakshminarayanan (None) 30 October 2014

Memorandum of understanding (mou)

I am staying in a complex which is presently under the care of the builder. He now wants to hand over the maintenance of the flats by signing an MOU with the committee which was not elected by the flat owners. Can this committee members sign the MOU on behalf of the residents. Is the MOU required in the first place since the sale agreement says that the builder will have to form the society for which he had collected money. Normally Sale agreement is one sided agreement and the clauses of MOU are also favouring the builder. What is the legal remedy to solve this issue..... Narayanan

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S R SHETTY (MANAGER - LEGAL) 30 October 2014

The Builder should form the Society and till then look after the Maintenance. The Members may form an Ad-hoc Committee to deal with Builder. I feel MOU should not be entered, by which the Builder will pass on his responsibility on the Committee. Normally the Builders do not form the Society even though they collect money and later on they do not give the money to the Society. Hence the Members / Adhoc Committee should pursuade the Builder to form the Society, failing which you will have to form/register your own Society and collect the money from the Builder.

Suveera Patil 29 June 2022

Here is the answer for the query: Builders should form societies and look after maintenance until then. A special committee may be formed to deal with the Builder. The MOU by which the Builder will transfer his responsibility to the Committee should not be entered. The Builders do not normally form the Society despite collecting money, and later they do not donate the money to the Society. Due to this, it is the duty of the Members/ Committee to persuade the Builder to form the Society, otherwise you will have to register your own Society and collect the money from him.