also known as ‘builder to society’ handover takeover audit process
The transfer of control and management of common areas and amenities from a builder to a Resident Welfare Association (RWA) or society is a pivotal phase for any housing society. It embodies the transition from an entity-owned structure to a self-managed community. An essential component of this transition is the handover-takeover audit (HOTO). This post aims to delve deep into the nuances of how do you takeover from a builder i.e. RWA handover takeover audit process.
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What is RWA handover takeover (HOTO) Audit?
An RWA HOTO Audit, standing for Resident Welfare Association Handover-Takeover Audit, is an essential process in the chain of the transfer of ownership and responsibility of a housing project from the builder to the Residents’ Welfare Association. This transition is governed by several legal parameters and involves a thorough series of inspections, audits, and approvals. This audit aims to ensure a seamless and error-free handover, providing a robust foundation for the RWA to manage the housing society efficiently.
Why is the RWA HOTO Audit Process Important?
The RWA HOTO Audit carries immense significance for both the builder and the RWA. For the builder, a well-conducted audit assures they’ve fulfilled their responsibilities and handed over a safe, habitable, and well-maintained project. It signifies the completion of their role in the project.
For the RWA, it serves as a thorough check to ensure that the project is delivered as promised, without any pending issues. It helps verify the quality of construction, the functioning of amenities, and the availability of necessary documents for future management of the establishment. This process offers a platform for the RWA to highlight any issues and seek redress before the full control is transferred. Overall, it equips the RWA with necessary knowledge and resources for efficient management, thereby improving the quality of living conditions for the residents.
Detailed Steps of the RWA HOTO Audit Process
Let’s delve into the key stages of the RWA HOTO Audit process, understanding each aspect in detail:
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Gathering Legal Documents and Certificates
One of the very first steps in the HOTO audit process involves the collection of all legal documents and technical documents, along with statutory documents related to the project. These may include for example the occupancy certificate, as built drawings, design brief reviews, etc., and also other permissions from local government bodies such as permission documents to operate the STP, licences related to the elevator, etc . These documents are proof of the project’s legality and compliance with all relevant regulations. Without these, the RWA may face legal complications in the future. Therefore, it’s important that these documents are obtained, carefully checked and securely stored. This equally applies to the Technical documents like “As built drawings” , Electrical circuit diagrams etc.
A builder handover checklist can be quite detailed and technical. Some of the key documents and items that should be included in such a checklist are:
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- Occupancy Certificate
- No Objection Certificate (NOC) from fire safety, water, and pollution departments.
- Building plans, including architectural, structural, plumbing, and electrical plans.
- Documents related to common facilities, such as the swimming pool, clubhouse, gym, etc.
- The list of assets, inventory, and maintenance equipment.
- Copies of all government approvals and NOCs, including those from the water supply, sewage board, electricity board, environmental clearance, fire department, etc.
- Maintenance and safety certificates for lifts, generators, and other equipment.
- As-built drawings and manuals for all installations and equipment.
- List of all vendors, contracts, and service agreements.
- Bank account details, tax receipts, and financial statements.
- The list of all apartment owners and their contact details.
- A copy of the completion certificate and any other relevant certification
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While this isn’t a comprehensive checklist, it might serve as a starting point. It’s also worth noting that the specifics of what should be included in a handover checklist can vary greatly depending on the specifics of the building and the legal requirements of the location where the building is situated.
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Inspections and Quality Checks
The next step involves the inspection of the project by the third party Quality Control team. This team conducts impartially a thorough check of the construction workmanship quality, amenities, utilities, and safety systems. If any issues or discrepancies are found, they’re reported so that they can be rectified before the handover. This step helps ensure that the RWA receives a project that is completed and up to the standard promised by the builder.
This is divided into Civil Engineering and MEP (Mechanical, Electrical and Plumbing) aspects.
Areas covered in an audit include:
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- Basements
- Lifts/Elevators
- Escalators
- Electrical rooms
- Electrical Transformers
- DG sets
- Water treatment plant
- Sewage treatment plant
- Sumps & Pumping plant
- Rain water harvesting system
- Firefighting systems
- Lobbies
- Corridors
- Parking
- Podium
- Terraces, roof tops
- Overhead water tanks
- Helipad
- Roads and pathways
- Staircases
- Basement ventilation and exhaust systems
- Dampness & damages in all common areas
- Painting work in common areas
- Shafts and ducts which are open for inspection
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Prior to this process, it may be necessary to open a bank account in the Association’s name, appoint an Estate Manager, and potentially at a later point in time appoint a Facilities management agency to handle maintenance, security, and housekeeping after takeover.
A comprehensive quality audit is critical in assessing the health of common areas, both in civil engineering aspects and MEP aspects. Experienced professionals conduct these inspections, focusing on several key areas:
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Civil Engineering audit
Basements: Basements are susceptible to water seepage, dampness, and potential structural damage. An audit will assess these, along with checking for water stagnation and incomplete works.
Lifts/Elevators: The structural integrity of lifts, lift wells, and machine rooms are crucial for safety. Audits identify unfinished works and any cracks that might compromise their functionality.
Electrical Rooms and Transformers Yard: These are examined for water seepage, dampness, cracks, and potential water stagnation, alongside the evaluation of any unfinished foundational works or fencing.
DG Sets Room, Sewage Treatment Plant (STP) Room, Water Treatment Plant (WTP) Room, Fire Fighting Pump Rooms, Pump Rooms for Water Pumps, and Underground Water Sumps: Each of these spaces are examined for water-related issues (seepage, drainage, water stagnation), structural issues (cracks, damages), and any incomplete works.
Swimming Pool, Roofs/Terraces, Shafts and Ducts, External Plastering, and Car Parking Area: These areas are also inspected for similar problems, along with the uniformity of painting shades and potential waterproofing issues.
Moreover, root cause analysis is conducted for any identified dampness or cracks, using advanced scientific tools such as moisture metres and Thermographic Imagers. Appropriate recommendations are then provided for rectification.
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MEP Audit
MEP Quality audits incorporate various elements:
Electrical Aspects: Includes audits of HT(High Tension) Yard/Transformer Yard, LT (Low Tension) Electrical Works, Basement Electrical Works, Electrical Panel Boards, and D.G. Sets. All light fixtures, switch boxes, street light poles, and cable trays are inspected to ensure safe and effective earthing.
Plumbing and Fire Fighting: Plumbing works and fire fighting installations are assessed, including sewage treatment plants (STP), water treatment plants (WTP), and fire alarm systems.
MEP Design Audit
Design audits ensure that all the installations are adequate in capacity to cater to the requirements of the project and align with the necessary codes and standards:
Electrical Works Design Audit: This involves checking the electrical load calculation, sizing of transformers and D.G. sets, illumination level, size of cable, the earthing system, and adequacy of power backup.
Fire Fighting & Fire Alarm works Design Audit: Ensures that the design of the fire fighting system including hydrant, sprinkler, and fire alarm system comply with NBC 2016 standards.
Plumbing Works Design Audit: Covers the checking of water requirement, storage requirement, source of water, and the distribution system, including pipe considerations for water supply. Also includes checking the capacity & type of STP and the rainwater harvesting scheme.
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Documentation Audit
Technical Documentation
Verifying essential documents is part of the comprehensive HOTO process. This ensures that the builder is handing over all the necessary documents, encompassing design schematics, compliances, standards, and AMCs (Annual Maintenance Contracts) for various components like Electrical, Plumbing, Firefighting, STP, WTP, Lift, and D.G. Set maintenance.
These documents were referred to in an earlier paragraph here,
Legal Documentation
This audit involves the verification of land extent, review of all title documents, litigation history, revenue records relevant to the boundary, sanction plans, and compliance documents. The legal audit is crucial to establish the ownership legality and transparency of the property.
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Performance Audit
Performance audits assess the functionality of various systems, like Transformers, DG Sets, Lifts/Elevators, Electrical Rooms, Pump rooms for fire fighting pumps, Water Treatment Plant, Sewage Treatment Plant, Solar water heaters, Solar Electric Panels, and Organic Waste Composter (OWC) etc..
After all snags are rectified, as reported in the snag list, a second ‘De-snag Inspection’ is conducted to assess the status of rectification of snags. This ensures that all previously identified problems have been effectively addressed.
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Transfer of Utilities and Services
The builder is also responsible for transferring all utility connections and services to the RWA or the society. This includes electricity, water, gas, waste management, and any other utilities that the project uses. This transfer is usually done through local utility providers and should be validated by the RWA.
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Detailed List of Amenities and Common Areas
The builder is expected to provide a comprehensive list of the amenities and common areas within the project. This list serves as a reference for the RWA to understand their maintenance responsibilities. It might include gardens, parks, clubhouses, sports facilities, parking areas, etc. The list should be checked against the actual amenities in the project to ensure nothing is left out.
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Training for Maintenance of Equipment
In most modern housing societies, several complex systems and equipment require regular maintenance and operation. The builder should provide training and instructions to the RWA members and the Facility management team headed by an Estate manager on how to operate and maintain these equipment. This training can be crucial for the smooth functioning of the all amenities of the society and preventing future breakdowns.
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Complying with RERA Guidelines*
(*The following advice is provided as a broad guideline for informational purposes only. We do not claim to have legal expertise, and the information herein is intended to help our readers understand their potential options. It is crucial that any legal matters be discussed with a qualified legal professional for accurate advice)
The Real Estate Regulation and Development Act (RERA) provides a framework for the handover process. It mandates that the builder must transfer the ownership of the completed apartments and common areas to the RWA or the competent authority within a specified period as per local laws. The builder must also hand over necessary documents and plans, including common areas, to the RWA or the competent authority within thirty days after obtaining the completion certificate.
RERA further stipulates that if the builder hasn’t initiated the formation of the RWA during the specified time period, the residing owners can come together to form the association. It’s typically recommended to have 7-10 volunteers to represent the owners’ welfare, although this varies based on state laws. The association should then draft the bylaws with reference to established associations’ bylaws and register with the Registrar of Society.
This transfer of title can also be referred to as handover. The conveyance deed must be executed and the physical possession of the property must be given to the allottees and the common areas to the RWA or the competent authority within three months from the date of the occupancy certificate. Additionally, the builder must handover necessary documents and plans, including common areas, to the RWA or the competent authority within thirty days after obtaining the completion certificate
Despite the complexities, it’s worth remembering that the RWA HOTO audit process is essential for upholding the rights of the residents and ensuring that their homes are safe, secure, and well-maintained. It truly marks the beginning of a community’s journey towards self-management, fostering a sense of ownership and pride among the residents.