East Bengaluru buyer answers

Corpus fund vs maintenance deposit: what am I paying for and who holds it?

By , acre&key · Published · Updated

Direct answer: A corpus (or sinking) fund is usually a long-horizon reserve for major repairs and replacements. A maintenance deposit or advance funds day-to-day operations. Until the association takes over, the promoter often holds both. RERA sections 11 and 17 push formation of the association and handover of common areas and documents. Get a written account of unspent balances.

Disclosure: acre&key’s advice is free to buyers; we are an authorised sales partner for some projects and may be paid by the developer.

Verify with your lawyer: Cost-sheet labels, agreement clauses on refunds, interest, and who may spend corpus money are contract-specific. Have a property lawyer read your project's papers before you pay large "deposit" lines at possession.

Cost sheets in East Bengaluru projects often list both a corpus / sinking fund and advance maintenance (sometimes called a maintenance deposit). Buyers lump them as "society money". They are not the same purpose, and the person who holds the cheque before association handover is not always the person who should spend it years later.

What is a corpus fund usually for?

In apartment practice, corpus (also called sinking fund in many bye-laws) is meant as a capital reserve: roof waterproofing cycles, lift replacement, major STP or DG overhauls, façade work, and similar infrequent, high-ticket items. The idea is that monthly maintenance alone should not be raided every time a capital asset dies.

There's no official standard rupee-per-sq-ft corpus for Bengaluru. Treat any "typical corpus" figure on a blog with caution. What counts is your project's cost sheet and agreement, and the association bye-laws that say how the fund may be used and who can authorise withdrawals.

What is a maintenance deposit or advance for?

Advance maintenance (or a maintenance deposit) is usually prepaid operating money: security, housekeeping, common-area power, AMC contracts, gardening, and association admin. Builders often collect it for a fixed period stated in the agreement, at or near possession, so the building can run while the association forms. Once the association bills members monthly, GST may apply above a set limit; see GST on apartment maintenance.

Again, do not treat any period or rate on this page as a market standard. Read your cost sheet. Ask whether unused advance maintenance is:

  • adjusted against future dues,
  • refundable,
  • or treated as non-refundable under a specific clause

Those answers live in the agreement, not in a blog template.

Who holds the money, builder or association?

Until the association of allottees is functioning and common areas are handed over, the promoter commonly collects and holds corpus and maintenance advances. After handover, the association should hold the unspent balances and run both the operating account and the corpus account under its bye-laws.

RERA does not create a single national "corpus schedule" with rupee amounts. What the Act does say, in substance:

  • Section 11(4)(e): the promoter must enable formation of an association of allottees under applicable laws; where local law is silent, formation within three months of a majority of bookings (RERA Act PDF on K-RERA).
  • Section 11(4)(d): the promoter must provide and maintain essential services on reasonable charges until the maintenance of the project is taken over by the association.
  • Section 11(4)(g): outgoings collected from allottees must be paid until possession is transferred; the promoter remains liable for collected outgoings that were not paid.
  • Section 17: registered conveyance of apartment title with undivided proportionate common-area title to the association, physical possession, and handover of necessary documents and plans (with Act timelines where local law is silent).

Those sections are why owners ask for a handover pack that includes fund balances, not only keys and an OC copy. The steps are covered in our guide to apartment association handover in Karnataka, and the OC side in why OC and CC matter.

What should you demand in writing at possession?

Ask the promoter (and later the association committee) for:

  1. Separate ledgers for corpus and for maintenance advance, opening balances, receipts by flat, spends with invoices, closing balances
  2. Bank account names, IFSC and statements for the periods the promoter held the money
  3. A written statement of what remains unspent on the day of association takeover
  4. Bye-law clauses (or draft bye-laws) on who may spend corpus and what majority is needed
  5. Clarity on whether "maintenance deposit" is refundable on resale or only transferable to the next owner

If the promoter will not produce ledgers, treat that as a red flag before you sign a full-and-final handover acknowledgement that waives accounting.

What should East Bengaluru buyers watch for?

In Whitefield, Sarjapur Road, ORR and Old Madras Road towers, capital assets (lifts, STPs, DG sets, water treatment) age differently by project quality. A thin corpus with heavy monthly maintenance can look cheap at possession and expensive five years later. Compare the structure of the two lines on the cost sheet, not only the headline total. Also check civic jurisdiction early (BBMP or panchayat), because property-tax and local body fees are separate from corpus and maintenance.

Corpus and maintenance sit among the wider hidden costs beyond base price. They are not stamp duty, registration or GST on the flat purchase; those are separate charges.

Which labels appear on Bengaluru cost sheets?

Projects use inconsistent names for the same ideas:

  • Corpus / sinking fund / reserve fund
  • Advance maintenance / maintenance deposit / CAM advance
  • Infrastructure deposit / utility deposit (sometimes mixed with BESCOM or water, ask which utility)

If two lines look similar, ask which bank account each cheque enters and who signs on that account after association handover. A single "society charges" demand without a breakup is not enough for your records or for a later resale buyer who asks what was paid.

On possession day, photograph receipts and note cheque numbers against flat number. Associations that inherit messy books spend the first year reconstructing history instead of fixing lifts.

What order should I do things in?

  1. At booking: list corpus and maintenance advance as separate cost-sheet lines with due dates.
  2. Before agreement: lawyer review of spend rights, refund, interest, and association formation clauses (sale agreement checks).
  3. Near possession: refuse to treat "society charges" as one blurry cheque without a breakup.
  4. At association formation: demand transfer of unspent corpus and maintenance balances with bank proof.
  5. After takeover: put corpus spending rules in the minutes; do not let operating deficits silently eat the sinking fund.

Frequently asked questions

Is corpus the same as advance maintenance?

No. Corpus is usually a capital reserve. Advance maintenance funds day-to-day operations. Your agreement and bye-laws control the labels and uses. Read those, not a generic glossary.

Can the builder spend my corpus on finishing construction?

Corpus is collected as a reserve for the association, not as construction money. Section 11(4)(g) keeps the promoter liable for outgoings it collected but did not pay, and section 17 requires handover to the association. Ask for ledgers, and get a lawyer's reading for your facts.

When should the association hold the funds?

Once the association is formed and common areas / maintenance are taken over under the project's documents and RERA handover duties. Until then, insist on transparent ledgers even if the promoter still holds the bank accounts.

Are there official rupee caps for corpus in Karnataka?

We haven't found an official cap in public sources. Go by your cost sheet, agreement and association bye-laws.

What if the builder delays association handover?

RERA sections 11 and 17 create duties around association formation and common-area conveyance / document handover. Complaint and lawyer options are fact-specific. See also check the project on Karnataka RERA.

References

  1. Real Estate (Regulation and Development) Act, 2016, K-RERA hosted PDF (ss.11, 17 themes cited above): https://rera.karnataka.gov.in/resources/staticpage/Real_Estate_Act.pdf, accessed 16 Oct 2026
  2. Karnataka RERA portal: https://rera.karnataka.gov.in/, accessed 16 Oct 2026
  3. Karnataka RERA FAQs: https://rera.karnataka.gov.in/resources/staticpage/KARNATKA_FAQs.pdf, accessed 17 Oct 2026

This page explains public rules and processes. It isn't legal or tax advice. acre&key gives buyers advice for free. We are an authorised sales partner for some projects and may be paid by the developer.

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