Builders Delay Transferring Control to Residents Welfare Associations in Hyderabad
In Hyderabad, builders are delaying the transfer of control to Residents Welfare Associations (RWAs) even after residents have moved in, raising concerns among homeowners. RERA mandates that this process should be completed within three months, but many builders are intentionally prolonging it to maintain control over common areas and amenities.
ReraReal EstateResidents Welfare AssociationBuildersHyderabadReal EstateJun 29, 2025
As per the Real Estate (Regulation and Development) Act (RERA), 2016, the builder is responsible for providing and maintaining essential services such as water supply, power backup, sanitation, and lifts until the RWA takes over. According to the RERA Rules, this process should be initiated within three months from the date the majority of allottees have booked their flats.
In most projects, the builder does take the initial steps to form the RWA. However, the actual handover of responsibilities is often delayed, and in some cases, the association is only formed on paper without any transfer of powers or assets.
“In most cases, the developer takes the initiative to form the RWA and hand over control,” said Nandi Rami Reddy, founder and CEO of Realtor Oxygen, a real estate expert. “But there are instances where the process is intentionally delayed so the builder can continue controlling the amenities and use common areas for commercial purposes. This is usually done by upcoming and small builders who want to hold on to revenue-generating facilities for as long as possible,” he added.
This delay impacts residents in several ways. Without a fully functional RWA, homeowners cannot take independent decisions on maintenance, budgeting, or common area upgrades. In several gated communities, developers continue to manage common facilities, collect maintenance fees, and operate commercial elements like clubhouses and retail spaces.
Some RWAs have also approached RERA on this issue. In a recent case, RERA directed a builder and its partners to register an association of allottees within 45 days, following a complaint by a villa owner. He alleged that the builder collected ₹3.41 lakh towards corpus and maintenance in 2022 without forming the promised society. Despite multiple assurances and meetings, the RWA was never registered, and the builder continued to demand further payments. After reviewing the complaint, RERA directed the builder to comply with the provisions of the Act and take necessary steps to register the RWA.
This issue highlights the need for stricter enforcement of RERA regulations to ensure that builders adhere to the guidelines and transfer control to RWAs in a timely manner. Homeowners should be aware of their rights and take proactive steps to form and register their RWAs to gain control over their living environments.
Frequently Asked Questions
What is the RERA Act?
The Real Estate (Regulation and Development) Act, 2016, is a law in India that regulates the real estate sector to ensure transparency, accountability, and timely delivery of projects. It mandates that builders provide and maintain essential services until the Residents Welfare Association (RWA) takes over.
Why do builders delay transferring control to RWAs?
Builders often delay transferring control to RWAs to maintain control over common areas and amenities, which can generate revenue. This is particularly common among small and upcoming builders who want to hold on to these facilities for as long as possible.
What are the consequences of a delayed RWA handover?
A delayed RWA handover impacts residents by preventing them from making independent decisions on maintenance, budgeting, and common area upgrades. It also allows builders to continue managing common facilities and collecting maintenance fees.
How can residents ensure timely RWA formation?
Residents can ensure timely RWA formation by being aware of their rights under RERA, staying informed about the progress, and taking proactive steps to form and register their RWA. If necessary, they can also approach RERA for assistance.
What actions can RERA take against non-compliant builders?
RERA can take several actions against non-compliant builders, including directing them to register the RWA within a specified period, imposing penalties, and taking legal action if they fail to comply with the Act's provisions.
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