Flat Maintenance Charges: A Comprehensive Overview
Living in a gated community or apartment complex often comes with a range of amenities designed to ensure a comfortable lifestyle. However, these benefits come at a cost in the form of maintenance charges, which are collected regularly (monthly, quarterly, or annually). Understanding how these charges are calculated, what they cover, and the regulations surrounding them is crucial for any flat owner or prospective buyer.
Methods of Calculating Maintenance Charges
1. Equal Maintenance Charge:
This technique of calculating annual maintenance fees is used when all the flats or apartments in a community are roughly the same size. The majority of societies compute these fees at the end of each month, and they are paid monthly.
2. Based on Area:
Societies with flats in various sizes mostly utilise this technique of calculating these charges. For instance, if a certain society charges Rs 6 in maintenance fees each month, the monthly maintenance fee for a 1,000-square-foot flat will be Rs 6,000.
3. Hybrid Maintenance Charges:
Some societies calculate these fees using a hybrid approach – amalgamating both the equal maintenance and the area calculation methodologies. Residents that use a partly equal maintenance system must pay the same fees for shared services like lifts, housekeeping, etc. The other aspect would be the charge calculated in the area of the flat owned.
Components of Maintenance Charges
| Type of Maintenance Charge | Applicability |
|---|---|
| Repair and maintenance of the building | 0.75% per annum of construction cost per flat |
| Service charges (housekeeping, security, common area electricity) | Equally divided among flats |
| Elevator maintenance | Equally divided among flats |
| Sinking fund | Minimum 0.25% per annum of construction cost per flat |
| Non-occupancy charges (for rented flats) | 10% of service charges |
| Parking charges | Based on number of parking slots |
| Property tax and water charges | Based on actual consumption or number of inlets |
Importance of Maintenance Charges
Maintenance charges are a mandatory part of the builder-buyer agreement, ensuring the upkeep of the property and its services. Section 6 of the RERA Act 2016 mandates timely payment of these fees. Even if the owner does not reside in the flat, the charges are still applicable to cover ongoing services.
Consequences of Non-Payment
Non-payment can lead to various penalties:
- Disqualification from society elections.
- Potential expulsion from the society.
- Inability to sell the flat without clearing dues.
- Society can withhold No Objection Certificates (NOCs).
Factors Influencing Maintenance Charges
Several factors can influence the amount charged, including:
- Repair Costs: For drainage, sewage systems, lifts, security equipment, generators, streetlights, etc.
- Service Fees: For lighting, park and garden upkeep, security, cleaners, etc.
- Parking Costs: Vary based on vehicle type and parking slot.
- Non-occupancy Fees: Charged for vacant flats.
- Sinking Fund: Reserved for emergencies, amount decided by the housing society’s governing committee.
Transparency and Accountability
- Maintenance charges should not be a profit source for builders.
- Interest from these charges must go into the maintenance account.
- A separate bank account, managed by a chartered accountant, should be created for these fees.
- Builders must provide a detailed income and expenditure account when handing over to the Residents Welfare Association (RWA).
GST on Maintenance Charges
- GST is applicable if annual maintenance charges exceed Rs. 20 lakh.
- Housing societies must follow specific guidelines to collect GST.
RERA Regulations
The Real Estate Regulatory Authority (RERA) mandates:
- A detailed agreement specifying maintenance charges and their frequency.
- Builders to maintain the project for a few years before handing over to RWA.
- Builders to collect charges in installments or lump sums as agreed.
- No ad hoc charges allowed post-implementation of the RERA Act of 2016.
Final Thoughts
Maintenance charges are essential for the smooth functioning and upkeep of residential communities. Being aware of these charges, their calculation methods, and legal requirements can help residents manage their responsibilities and avoid disputes.
FAQ
1. How are flat maintenance charges calculated?
Here are a few common approaches to figuring it out: per-square-foot calculations, equal apartment calculations, and hybrid calculations.
2. How much maintenance should I pay for the apartment?
In India, property developers impose a maintenance fee that can range from Rs 2 to Rs 25 per square foot (per square foot).
3. Is paying the annual maintenance fees required?
Your contract with the builder includes these fees, making them one of the costs you must pay in full.
4. Why is maintenance calculated based on square feet?
Charges for the upkeep of common spaces are often established based on a per-square-foot tariff so that maintenance costs are distributed equally among the flat sizes.
5. How can we reduce society’s maintenance charges?
All owners and tenants are liable to pay maintenance fees. If necessary, the general body may decide to reduce or request a concession on it for vacant or unsold apartments and put that decision into effect.
6. Is GST applicable on apartment maintenance charges?
If the maintenance charges exceed Rs. 7,500 per month or Rs. 20 lakh per year, they must pay GST at a rate of 18%.
7. How often are maintenance charges levied?
The invoicing schedule for this fee structure varies according to the builder/RWA, the cycle of society’s bill payments, etc.
8. Who pays the maintenance fees?
The owner is liable for all maintenance fee payments following the transfer of ownership. If they are included in the lease (owner-tenant agreement), the renter is liable for paying them.
