Apartment Associations in Chennai: Who Manages Your Flat After Possession?

Collecting the keys to a new flat makes it yours to live in. It does not settle who runs the building. On the day of possession, apartment management in Chennai still sits with the builder, which remains legally responsible for the project's essential services until the owners' association takes over. Since 6 March 2024, every apartment association in Chennai has been governed by the Tamil Nadu Apartment Ownership Act, 2022, which requires the owners of any building with four or more apartments to form one. The months between possession and that handover decide what records and money the owners inherit and whether defects in shared areas are ever formally reported. For a buyer, the practical questions are what the builder still owes, how the association is formed, how each flat's share of maintenance is worked out and what to settle before booking and after possession.

Who runs the building between possession and handover

Until the owners' association formally takes over maintenance, the builder runs a new apartment complex in Chennai. Section 11(4)(d) of the Real Estate (Regulation and Development) Act, 2016 (RERA) makes the promoter, the legal term for the builder or developer, responsible for providing and maintaining essential services at reasonable charges until the association of allottees (buyers) takes over the project's maintenance.

Apartment maintenance after possession therefore runs in two stages: the builder's, then the association's. In the second stage, the association formed under the 2022 Act takes charge of the common areas, which the Act defines to include staircases, lifts, lobbies, terraces, parking, water tanks, motors and central electrical installations. Apartment association responsibilities from then on cover maintaining, repairing and replacing those areas, collecting each owner's share of the cost and getting the accounts audited every year.

Handover does not end the builder's obligations. Under Section 14(3) of RERA, if a buyer brings a structural defect or a defect in workmanship, quality or provision of services to the builder's notice within five years of possession, the builder must rectify it within 30 days without further charge. The table sets out where each duty sits.

What the Tamil Nadu Apartment Ownership Act, 2022 requires

The 2022 Act replaced the Tamil Nadu Apartment Ownership Act, 1994 and was brought into force on 6 March 2024 by a Housing and Urban Development Department notification. It applies to any building with four or more apartments, and Section 7 says the owners "shall form an association". Together with the Tamil Nadu Apartment Ownership Rules, 2024, it sets the apartment owners association rules in Tamil Nadu. Its enforcement tools are written for the association formed under it. Unpaid maintenance becomes a charge on the defaulting flat (Section 19), and the association can go to court to recover dues, claim damages or seek an injunction (Section 9). An informal residents' committee is not the body these provisions name, which makes it a weaker substitute.

Forming the association happens in four steps:

• The promoter or a majority of owners files a declaration for the building in Form A with the competent authority and pays a fee of ₹5,000 to ₹10,000, depending on the number of apartments. A September 2024 government order named the District Registrars of the Registration Department as the competent authorities across Tamil Nadu. For a new building, the Act originally allowed 90 days from the completion certificate, which is the document a planning authority issues once a building is finished according to its sanctioned plan. A Removal of Difficulties Order dated 24 September 2024 extended that period to 365 days. Buildings that already existed when the Act came into force on 6 March 2024 count their deadline from that date instead: 180 days under the Act, raised to 365 days by the same 2024 order and to 730 days by a second order dated 7 April 2025.
• The District Registrar may make inquiries before endorsing the declaration. A declaration returned with defects has to be corrected and resubmitted within 30 days.
• Once the declaration is accepted, a majority of owners frames bye-laws, the association's internal rules. Rule 5 of the 2024 Rules requires them to be submitted for registration within 180 days of that acceptance, and the District Registrar then has 90 days from receiving the application to register them. Under Section 6(2), the bye-laws cover the board of managers, how many of its members retire each year, how owners' meetings and quorum work and how each owner's share of common expenses is collected. The 2024 Rules originally set the board at one-third of the apartment owners, with a maximum of 21 members. A September 2025 amendment replaced that rule with a minimum of three owners.
• The owners form the association under the registered bye-laws.

The gap between getting the keys and a working association

Read together, RERA and the 2022 Act run on different clocks. The builder's five-year defect liability starts on the date possession is handed over. For a new building, the Tamil Nadu process allows the declaration alone to be filed up to 365 days after the completion certificate. The bye-laws can then be submitted up to 180 days after the declaration is accepted, and registration can take another 90 days. In a new project, the defect clock can run for months before a registered body exists to speak for the building as a whole.

That gap has a cost. Defects in common areas, such as terrace waterproofing, the sewage treatment plant or the fire safety system, affect every owner but sit inside no single flat, so no individual owner is naturally responsible for reporting them. A defect raised in writing within the five-year window has to be repaired by the builder within 30 days at no charge. The same repair after the window closes is a common expense shared by all owners, since the Act defines common expenses to include the cost of maintaining, repairing and replacing common areas.

Section 14(3) lets each buyer report defects individually, so owners do not have to wait for the association to be registered. A residents' group can keep a dated, written defect list and send it to the builder, signed by the buyers raising each defect. That puts the defects on record within the window and gives the future association a record to follow up on.

Money collected in this period needs the same attention. The 2022 Act has no provision on the advance maintenance deposit or corpus fund (a one-time lump sum towards the building's upkeep) that a builder may collect at registration, so the amount, what it pays for and when the unspent balance and its accounts move to the association largely depend on what the agreement for sale says. RERA's Section 11(4)(g) does require the builder to pay the outgoings it has collected from buyers, including maintenance charges, until physical possession passes to the buyers or their association.

How each flat's share of maintenance is calculated

Under the Tamil Nadu Apartment Ownership Act, 2022, each owner pays common expenses in line with their undivided interest, the share of the common areas that comes attached to a flat and cannot be separated from it. Section 8(1) sets that share in proportion to the flat's carpet area against the project's total carpet area, and Section 18 uses that share to split the building's running costs.

The Act sets no rate for apartment maintenance charges in Chennai, which are commonly quoted per square foot of built-up or super built-up area. Both measures add walls to the carpet area, and super built-up area also adds a share of common spaces. That is why the difference between carpet, built-up and super built-up area shows up in the monthly bill. Two rate quotes can be compared only when they are applied to the same area figure. Loading is the percentage added to carpet area to reach super built-up area. Where it differs between flat types in one project, a super built-up basis shifts part of the cost from one group of owners to another, compared with the carpet-area shares the Act uses.

Section 18 says common expenses "shall be charged" according to each owner's percentage of undivided interest, and neither the Act nor the 2024 Rules provide an equal per-flat basis. Owners asked to pay any cost that way can ask the association which registered bye-law allows it. The same section also keeps an owner liable for common expenses even if they give up the use of common areas. Not using the gym or pool does not reduce the share. Under Rule 18 of the 2024 Rules, late payments carry interest at the State Bank of India's highest marginal cost of lending rate plus two per cent.

The size of the total depends on what the building runs. Gated community maintenance in Chennai can cover security staff, lifts, generators, water and sewage treatment plants and a clubhouse or pool. Each of these adds to the total that the percentages are applied to. Because this cost recurs every month alongside the home loan, it belongs in the same calculation as choosing a home loan EMI that does not stretch the monthly budget.

GST on maintenance dues in Tamil Nadu

Members' contributions to a resident welfare association (the term CBIC's GST circular uses for an apartment association) are exempt up to ₹7,500 per month per member. An association whose aggregate turnover stays within ₹20 lakh in a financial year need not register for GST. Above ₹7,500, a CBIC circular issued on 22 July 2019 (No. 109/28/2019-GST) stated that the entire amount is taxable, not just the excess.

In a judgment dated 1 July 2021 in Greenwood Owners Association v. Union of India, a single judge of the Madras High Court held that GST applies only to the part of the monthly charge above ₹7,500 and quashed the circular on that point. On 9 September 2021, a Division Bench of the same court stayed that portion of the ruling on the tax department's appeal. Because the outcome of that appeal decides which reading applies, an association collecting more than ₹7,500 a month per member should ask its auditor, who under the 2024 Rules must be a practising chartered accountant, to confirm the appeal's current status before deciding how to bill. Owners can ask how GST on their bills has been worked out.

Apartment sinking fund: what the Act leaves to owners

An apartment sinking fund is money set aside from regular collections for large, infrequent costs such as repainting the exterior, overhauling lifts and generators, replacing major pumps or redoing terrace waterproofing. Neither the 2022 Act nor the 2024 Rules require a sinking fund or set a contribution rate, so any percentage a builder or maintenance agency quotes does not come from the law.

Without a reserve, those costs still arrive. Replacing common areas and facilities falls within the Act's definition of common expenses, so when a lift needs replacing and there is no fund, owners pay through a one-time levy. Whether a reserve is built, how much goes into it and what it can be spent on are questions to put to the builder before booking and to the owners' general body after handover. A buyer can ask whether part of each month's dues will be set aside from the first year.

Insurance is also an owners' decision. Under Section 14, the association insures the building against fire, flood, cyclone or similar hazards only if a majority of owners requires it, and the premium is a common expense. Owners can still insure their own flats, which is why it helps to know what a building policy leaves to an owner's own home insurance.

Buying a resale flat: ask the association for a statement of dues

Resale buyers take on a specific risk. Section 22 of the 2022 Act makes the buyer of a flat jointly and severally liable with the seller for common expenses left unpaid up to the sale, although the buyer can recover what they pay from the seller.

The same section gives the buyer a way to cap that exposure. A buyer is entitled to a statement from the association showing the unpaid amount against the seller and is not liable for arrears beyond what that statement shows. Getting the statement before the sale deed is registered lets any dues be settled as part of the transaction instead of surfacing afterwards.

Questions to settle before you book

The questions below add to the broader questions to ask before buying a flat in Chennai, such as the full cost of ownership and the builder's delivery record. They are easiest to settle before an agreement for sale is signed, and the answers belong in that agreement or in a written statement from the builder:

• Who will run maintenance from possession until the association takes over, at what monthly rate and on which area figure?
• How much advance maintenance deposit or corpus will be collected, what will it pay for and when will the unspent balance and accounts be handed to the association?
• By when will the builder file the building's declaration with the District Registrar, given that the law allows a new building up to 365 days from its completion certificate?
• Which systems, such as the sewage treatment plant, lifts, generators and fire safety equipment, come with warranties or annual maintenance contracts (service agreements with the supplier), and will those contracts transfer to the association?
• Will part of the monthly maintenance go into a sinking fund from the start?
• In a project built in phases, how will facilities shared across phases be managed? The Act provides for a federation of associations where needed.

A builder that will not share these answers or the draft agreement before booking is showing one of the early warning signs in a Chennai project.

What to do after possession

After the keys are handed over, these steps follow the two timelines described above:

• Inspect the common areas early and send any defects to the builder in writing, dated and signed by the buyers raising them, within the five-year window under Section 14(3) of RERA.
• Ask the builder whether the building's declaration has been filed with the District Registrar. An apartment association in Chennai can be formed only after that declaration is accepted, and until the association takes over, maintenance stays with the builder under RERA.
• Ask for a statement of the advance maintenance deposit or corpus collected, what has been spent from it and what will move to the association.
• Once the association is registered, ask to see its accounts. The Act requires them to be audited within three months of each financial year's end, and Rule 16 of the 2024 Rules requires them to be filed with the District Registrar within six months after 31 March. The general body is also where owners decide on building insurance and a sinking fund.

The filing of the declaration is the date to watch in any new project. Until it is filed and accepted, owners may not yet have a registered association to oversee the handover, while the five-year defect window keeps running.

Frequently asked questions

Is it mandatory to form an apartment association in Chennai?

Yes, for any building with four or more apartments. Section 7 of the Tamil Nadu Apartment Ownership Act, 2022, in force since 6 March 2024, requires the owners to form an association under registered bye-laws. The process starts when the promoter or a majority of owners files the building's declaration with the District Registrar.

How long does a builder have to file the declaration for a new building?

For a new building, the period is 365 days from the date of the completion certificate. The Act originally set 90 days, and the Tamil Nadu Apartment Ownership (Removal of Difficulties) Order, 2024, dated 24 September 2024, extended it. Buildings that already existed when the Act came into force have a separate deadline counted from 6 March 2024. Either the promoter or a majority of the apartment owners can file the declaration.

Can an owner refuse to pay for amenities they do not use?

No. Section 18 of the 2022 Act keeps an owner liable for their share of common expenses even if they waive the use of common areas and facilities. The share follows the owner's percentage of undivided interest, which the Act ties to the flat's carpet area.

What can an association do if an owner does not pay maintenance?

The Act lets the association charge interest on late payments at the rate set by Rule 18 of the 2024 Rules, recover dues from the occupant when the owner does not live in the flat and take court action. Unpaid dues also become a charge on the flat, subject to prior claims such as government dues and mortgages.

Does an apartment association have to get its accounts audited?

Yes. Section 21 requires every association to prepare a receipts and expenditure account and a balance sheet at the end of each financial year, have them audited within three months and file authenticated copies with the competent authority along with the auditor's report. Under Rule 16 of the 2024 Rules, the auditor must be a practising chartered accountant, and the papers are due within six months after 31 March.

What happens to associations in older buildings?

Where a building that existed when the Act came into force has a single association, Section 7 treats it as the association under the 2022 Act. Such buildings had 180 days from the Act's commencement on 6 March 2024 to file their declaration. A September 2024 order raised this to 365 days, and an order dated 7 April 2025 raised it to 730 days, a window that ran to March 2026. Owners of an older building that has not filed should check the current position with their District Registrar.