Builder or buyers: Who is responsible for facility management?

Who bears the responsibility for maintenance, in a newly-constructed housing complex? We examine this issue and explore how a smooth transition can be achieved from the builder to the residents’ welfare association

The residents of a housing society in Noida were taken aback one morning, when they found that the office of the facility management was locked. The builder had abandoned the maintenance of the society overnight, after having a tussle with the residents’ welfare association (RWA). The residents complained that they had been left in a lurch, as there was no proper handover of maintenance to the RWA. However, in this case, the builder alleged that the residents had not paid the maintenance for months and the residents in turn, were asking for the transfer of the maintenance fund, including the IFMS (interest-free maintenance service) and sinking fund.

Relinquishing maintenance through a proper handover to the RWA and ensuring that the basic services, like water and electricity, do not get affected, are the responsibility of the builder. Analysts point out that the handover of maintenance entails a formal process, where various factors that come under maintenance, like power backup, water supply, etc., need to be ironed out. A developer should, ideally, hand over the facility management to the RWA, within 12 months of obtaining the Occupancy Certificate.

 

The role of facility management companies

To smoothen the handover process, the developer can employ a facility management services company, once the project nears completion, so that a systematic maintenance process can be established during the handover/possession phase, which will enable the RWA to take charge sooner and more efficiently.

The facility management company would be solely responsible for the maintenance of the property and would adopt a process-driven handover of the flats to the buyers, ensuring complete transparency and enhancing the value of the property, as well as that of the developer’s brand name.

Kunal Lala, vice-president, SILA (a property consultant with facility management at its core), maintains that buyers desire transparency and accountability from developers. This can be easily showcased through facility management. “A strategic partnership and clarity, vis-à-vis the guidelines and processes that need to be followed, as per the contract that has been mutually agreed upon, will help with fewer conflicts between the buyer and the facility management services company. The contract between both, should be drawn in a way that their interests are aligned and it is a win-win situation, for the buyer as well as the service provider,” says Lala.

See also: IFMS and sinking fund: Can a builder rightfully charge both?

 

Dealing with disputes over maintenance

Nikhil Hawelia, managing director of the Hawelia Group, nevertheless points out that the onus of having a seamless transition from the builder to the buyers’ association, lies on both parties. According to him, the lack of trust and understanding between the parties, should not be allowed to escalate to the extent of the builder leaving the maintenance overnight.

“Yes, it is a loss of brand identity for the builder. Being responsible for the maintenance, the duty to reach reconciliation lies with him, first. However, there are situations, when the builder finds it tough to deal with a group of vested interests, whose only aim is to take over the facility management, even when majority of buyers are against it. In such a case, the builder cannot afford to ruin his brand reputation and may have no choice but to leave. Even in such cases, the handover should be thorough and process-driven. If there is a need, the builder can hire a professional arbitrator for the same,” says Hawelia.

Residents need to be encouraged, to become a part of the maintenance process, while the property is being handed over. Buyers who stop paying monthly maintenance charges, usually have grievances which are unattended for a long time and this leads to resentment. A dialogue should be encouraged between the buyer, the developer and the facility management company that is maintaining the property, to arrive at a mutual understanding.

 

Ways to reduce conflicts over facility management

  • A professional facility management company, rather than the builder’s in-house team, can be asked to take over the maintenance of the project.
  • Buyers should be made a part of decision making in facility services.
  • Transfer of maintenance to the RWA, must be process-driven and not ad hoc.
  • In case of conflict, a professional arbitrator should be appointed, to arrive at an amicable solution.

(The writer is CEO, Track2Realty)

 

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