What is Corpus Fund?

There are several interchangeable terminologies used for financial support in a housing society. Most of the owners must have come across terms like Corpus Fund, Sinking Fund, and so on. But, the major question that most homeowners ask is what is corpus fund in real estate. A corpus fund is a reserve set aside by a housing society or a developer of real estate. 

What is the use of corpus fund in apartments?

Typically, the corpus fund is established to cover any potential costs for the maintenance and renovation of the property. 

• It serves as a financial safety to guarantee that the community or developer can pay unforeseen charges without putting any stress on the buyers.

• These funds are mostly kept under the assumption that expenses can arise and escalate.

• Keeping the corpus fund for a housing society or real estate project is important to operate efficiently.

• A Corpus Fund must operate transparently in order to prevent misuse or theft by the builder or other parties. 

• The builder must guarantee that homeowners are aware of how the fund is being used and create precise expense accruals that are recorded in the annual balance statement.

The corpus fund in real estate offers monetary security and stability for the long-term well-being of the property and its stakeholders. This is all about what is meant by corpus fund.

I bought an apartment last year and once things got finalised, I was asked to pay Rs 30,000 as the corpus fund. I wasn’t aware of such charges before hence had to ask the owner what is corpus fund in society. I learnt that it is the amount or fund that the society charges to operate, exist and maintain itself. The buyers must pay this fund so let’s read what it includes vividly here.

What is corpus charges meaning?

In order to exist, organise and perform or maintain certain activities, the society charges this corpus fund. They use this fund during any damage to the

• Amenities

• Buildings or

• Electric/gas/ water supply.

They can also use this fund to 

• Renovate

• Develop

• Add or update things available in society

At times of crisis like floods, earthquakes or more as well this fund can be used. It is like the savings of a society that is used when absolutely necessary.

The corpus fund is based on the square footage of the building. It can start from Rs 10,000 and go up to Rs 1 lakh as per the rules and regulations of society. 

The members of a society are bound to pay this amount.

I hope you have understood what is corpus fund in society.

When my father purchased a flat I learnt the meaning of corpus fund. So, I will share the corpus amount meaning with you. Generally, the corpus fund in apartments meaning can be referred to as a capital fund, an amount kept aside for an organisation/ entity to operate, exist and maintain itself. These funds are collected for apartments purpose only and not for the attainment of any objectives and are accrued through voluntary contributions. In other words, it is the lump sum amount collected as pre-maintenance charges from the home buyer which is not included in the total sale of the property. Corpus Fund is collected by the builder however once the housing society the developer hands over the corpus fund to the managing committee. For further maintenance residents also pay a monthly/quarterly/annual maintenance charge. This is what is corpus fund in apartments means.

The corpus fund is used for facility management and supervision agencies which take care of amenities, common areas, light bill, servicing, cleaning, etc.  The interest generated on corpus funds can only be used for these purposes. 

The corpus fund is calculated on a per square feet basis. The amount can be over Rs 1 lakh. After the formation of the housing society, the corpus fund is transferred to the Sinking Fund for major repairs, reconstruction, structural addition or redevelopment. This is the corpus fund meaning in English. I hope what I have shared about the meaning of corpus fund is helpful.

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I remember my first job was working as an intern for an NGO which had a serious financial crisis. Now no one could be blamed that time as due to Covid, every household was suffering so there was no question of getting donations from anywhere. I was all new in this field and seeing me in a bit of a tense mood, my father asked me what was the matter. I explained how nothing is going quite well but he said that the NGO might now start using the corpus fund. I had not heard the term before or know anything about it so asked him, what does

corpus fund means? He said that it refers to an unrestricted permanent fund that is used in rare or critical circumstances where the survival of an organization or institution is at threat.

What is the amount of money for the Apartment Corpus Fund?

Later I got to know that there is a corpus fund for apartments as well which gets transferred by the builder to the Associate after the formation of the apartments. It can be of Rs 1.5 lakh for 2 years or more that gets collected from each apartment buyer as Building Corpus Fund. The interest that is gained from the money collected as

corpus fund in apartments

is later utilized for paying to the Facilities Management company.

I hope what corpus fund means is clear to you now

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My builder told me about the corpus fund meaning when my friend was finalizing the deal to buy an apartment in a project. He told me that it is a large amount of money that the builder collects from the buyer at the time of booking the flat. With respect to housing societies, the developer is responsible to collect the corpus fund to maintain the facilities and amenities.

The developer utilizes the dividend or interest generated from the Corpus Fund to pay a supervision agency and facility management that takes care of cleaning, servicing, light bill, common areas, amenities, etc. I want you to know that the builder can’t utilize the interest generated from this fund for any other purposes.

While selling the property, every buyer of the home/apartment contributes his share of a predetermined amount that collectively forms the Corpus Fund. The builder delivers the built property to the buyer generally within 2 years in case the property is under construction. This is why this amount is collected from the buyer for taking care of expenses over a long period of time.

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I hope now you know what is corpus fund meaning in real estate.