Corpus fund distribution: flat-wise or carpet-area-wise split?

One of the most common disputes in a redevelopment is not how much corpus, but how it is divided.

Corpus can be split equally per flat or in proportion to each member's carpet area. Carpet-area-wise is the more common and more defensible basis, because corpus is meant to support future maintenance, which is itself charged on area. Whichever method the society picks must be recorded in writing.

What is the difference between the two methods?

Under a flat-wise split, the total corpus is divided by the number of members and everyone receives the same amount, whether they hold a 300 sq.ft flat or a 700 sq.ft one. Under a carpet-area-wise split, each member receives corpus in proportion to their existing carpet area, so larger flats receive more.

Naturally, small-flat holders tend to prefer the equal split, and large-flat holders prefer the area-linked one. In older Mumbai buildings, where flat sizes vary widely on the same floor, this single choice can change a member's receipt substantially.

Which method is easier to defend?

Carpet-area-wise is the more common practice and generally the easier one to justify. The purpose of corpus is to help members meet the higher outgoings of a new building, chiefly maintenance, which societies almost always charge per sq.ft. If your future maintenance bill is area-linked, a corpus that is also area-linked keeps the arithmetic consistent. An equal split can leave large-flat holders short and small-flat holders with a surplus.

Work out your society's corpus per sq.ft and whether the interest realistically covers maintenance using the corpus fund calculator.
Confirm the areas you are dividing by, since carpet, built-up and super built-up are not the same. The carpet and built-up converter helps you compare like with like.

How should the society record the decision?

Decide the method before signing anything, not afterwards. The chosen basis should be stated plainly in the Special General Body Meeting resolution, held under the Section 79A framework that requires a two-thirds quorum and approval by at least 51% of total members, and then carried into the registered Development Agreement and each member's PAAA, along with the payment schedule.

A corpus promised verbally, or split by an informal understanding, is where disputes begin. If it is not in the documents, it is not settled. Our guide on possession and corpus covers the timing and safeguards in more detail.

Work it out for your own society

It shows your corpus per sq.ft and whether the interest it earns would actually cover maintenance in your new building.

Open the Corpus Fund Calculator

Common questions

Can a society use a mix of both methods?

Yes. Some societies award a fixed base amount to every member and then distribute the balance in proportion to carpet area. This can reduce friction where flat sizes vary sharply. It is perfectly valid, but it must be spelt out clearly in the SGM resolution and in the agreements, with the formula and worked figures attached so no member is left guessing.

Should corpus be based on existing carpet area or the new carpet area?

Most societies use the existing carpet area, since corpus is compensation linked to what the member already owns. Some use the new area instead. Neither is wrong, but the two produce different results, so the society must state which one applies and then apply it uniformly to every member without exception.

What if a member disagrees with the split after signing?

Once the basis is recorded in a registered Development Agreement and the member's PAAA, reopening it is difficult and usually needs everyone's consent. That is precisely why the method should be debated and settled at the SGM stage, when members can still ask questions and the terms are not yet binding on anyone.