Creation of Other Funds

In a Cooperative Housing Society (CHS), "creation of other funds" refers to establishing separate financial pools beyond the standard maintenance fund, typically used to save for large, infrequent expenses like major repairs, renovations, or replacements of key infrastructure components, often including a "sinking fund" and sometimes additional funds for specific purposes like landscaping or future development projects, all requiring approval from the society's general body. 

Key points about creating other funds in a CHS:

Purpose:

To proactively manage future costs by setting aside dedicated funds for specific needs, ensuring the society has enough money to cover large expenditures without putting undue burden on members through sudden special assessments. 

Common types of "other funds":

Sinking fund: The most common additional fund, primarily used for major repairs or replacements like roof replacements, elevator upgrades, or structural maintenance. 

Reserve fund: A general contingency fund for unforeseen expenses. 

Development fund: For future expansion projects or amenities like adding new parking spaces or community facilities. 

Landscaping fund: To maintain and enhance the society's common green spaces. 

Establishing the fund:

General body resolution: The decision to create a new fund, including its purpose and contribution rates, must be approved by the society's general body. 

Contribution mechanism: Members typically contribute to these funds through a fixed monthly or annual charge added to their maintenance fees. 

Management and utilization:

Fund management: The CHS committee is responsible for managing these funds, ensuring they are invested appropriately and used only for their intended purpose. 

Withdrawal process: Strict guidelines are usually in place for withdrawing funds from these accounts, often requiring further approval from the general body for significant expenditures.