Wondering why builders ask you to pay some maintenance charge in your residency contract? Let’s find out more about it.
It is often seen that new homeowner prefers to quickly sign a long-term contract with their dream home after building it on a piece of plot for its systematic maintenance and welfare.
The responsibility to keep the home clean and safe, as well as taking care of a precious investment and maintaining it every day, be it regularly cleaning the house, replacing broken electric switches, plumbing upgrades to paint refreshing, fencing, security, and more, all lie on the homeowner.
The obligation of the upkeep and maintenance of all the ready-to-move-in facilities of community swimming pools, gyms, parking spaces, cleaning, plumbing, etc., is shared among the homeowners within the complex or society. In this case, your ideal home is an apartment complex.
The homeowners and tenants should know about the structure of society maintenance and how their contribution will be used before moving into a gated community.
Types of Society Maintenance Charges
Although the basic structure of laws is the same in India. Some states may follow the altered and combination model based on the guidelines of Maharashtra on maintenance charges as they are the most precisely detailed.
The charges can be divided category-wise as stated below:
Any charges incurred from using services and amenities include electricity in common areas, security guards, lift operators, cleaning crew, and gardeners. All the members have equally borne these service charges.
Maintenance and Repair Charge
This category consists of charges for services like taking care of all building elements, such as internal roads, pumps, drainage, lifts, tanks, generators, street lights, and security equipment, among others. The society’s governing body decides the rates, subject to a minimum of 0.75% annually, based on the total construction cost of each flat for meeting the required expenses of normal recurring repairs.
Vehicle owners pay these charges. Society fixed rates are the determiner of how much these charges are. ( Charges for two-wheeler and four-wheelers vary).
Water charges are compulsory for all residents; the basis of the total number and size of inlets provided in each flat determines the rate of these charges.
Charges for Non-Occupancy
You are required to pay the type of charges even if you are not currently residing in the house/flat; however, these charges cannot exceed more than 10% of the service charges.
The governing body of the society decides the emergency fund charges for unforeseen situations, subject to a minimum of 0.25% annually of the construction cost of each flat.
Local authorities decide the charges, as it is directly paid to the government of Maharashtra; it is not applicable outside the state.
Defaulted Payments Interest Charges
You must pay interest on defaulted dues if you are late in making payments. Different societies have different charges, subject to a maximum of 21% annually on the charges.
As part of the maintenance bill, you may have to pay ( depending on the build-up area of each flat) certain expenses for insuring the building and equipment. In case there are shops/flats used for commercial purposes by others in the building, you are not required to pay an insurance premium for them.
The built-up area of each flat/unit determines these charges.
The governing body decides these charges when required.
Methods to Access Society Maintenance Charges
There has been a severe disagreement among corporative societies among people about how the maintenance charges are calculated up to now. These corporate societies’ calculating the maintenance charge is not an illegitimate method.
They have a criterion based on rational propositions, and the law does not have any bearing on how the charges are calculated, that is, whether they are based on how large the residential facility is or the utility of service they offer.
It is a well-established proposition that a cooperative society is a collaborative space that belongs to everyone who lives there and is responsible for its safety and management.
Due to the abovementioned fact, the shortcomings faced by the people living in it should be duly addressed and resolved with a proper redressal mechanism.
Charges Based on the Per Square Foot Criterion
This method of charge evaluation is based on “how large an apartment you own.” The larger the apartment, the higher the charge will be.
The exemplar for the abovementioned criterion is that if a committee decides the per square foot charge as 3 Rs per square foot and supposes you have an apartment of 1200 square feet, then the maintenance charges applied would be 3600 Rs. Essentially, this method demonstrates that we can calculate the maintenance charges by multiplying the per-square-foot charge by the number of square feet you own.
The abovementioned proposition does have a lopsided criterion because if a person owns a larger square foot flat, he/she has to pay more as compared to a person who owns a smaller flat and has to pay less in maintenance charges even though his/her access to the facilities would be the same as that of the person who pays the larger share of maintenance based on a larger square foot area.
This method can put the people living in those apartments at ease when they have the same-sized apartment explicitly or supposedly similar.
It is another method to calculate the maintenance fee by summing up all the fees to be borne and then equally distributed among all the residents. It is a bit of a fair method, but it is not justified as the size and shape of the apartments may vary concerning the wealth associated with individuals.
This method is an amalgamation of the above methods, eliminating the need to choose between the two well-suited methods, thus providing rational treatment to all the members residing there. In this method, square foot-based charges are established to accommodate other componential charges such as repair and sinking funds. Additionally, equal fees are levied on similar charges like service fees, lift expenditures, etc.
Several guidelines must be adhered to for these maintenance charges in terms of bylaws. Still, this type of hybrid method can exhibit itself as well adopted and have a total legitimate amount of maintenance charges that are needed to be given.
Payment of Utility and Maintenance Fees
If a buyer (a person) wants to buy an apartment, then they have to enter into a builder-buyer agreement and, concerning this in Section 6 of the RERA Act of 2016, the maintenance charge is to be paid on time by the very resident residing in that locality.
Paying the maintenance charges is a benefit because if you do so, you need not be worried about several facilities you are enjoying as a resident of that locality without your involvement, e.g., water supply management, security, arrangement, and other such facilities.
Many think about whether they must pay the maintenance charges if they do not live in that apartment. The response to that question is that you should because everyone’s contribution is there for society to be maintained. It does not depend on the fact that people own individual properties, as it is a cooperative society. Everything has an exception. Supposedly, if your society follows a hybrid maintenance method, you can pay annually for necessary services only.
RERA Rules for Society Maintenance
These charges are divided into monthly, quarterly, and annually.
- The buyer should sign an agreement of maintenance in corroboration with the builder.
- The maintenance agreement accompanies the amount and frequency of maintenance payments.
- Both parties should agree on the frequency of maintenance payments, whether monthly, quarterly, semi-annually, or annually.
- As soon as the property is transferred to the buyer, the building is free from any maintenance charge.
- Because the property is transferred to the buyer, he/she will be responsible for every maintenance charge applied to the property. It should be mentioned in the rental agreement if the property is rented out.
- The builder has the authority to ask for 10–24 months of maintenance to be paid from the side of the buyer.
- The maintenance fees loaded upon us depend upon the number of facilities that society offers. However, it can range from 10–25 rupees a month.
Most gated societies offer many amenities and luxuries to their residents to keep their societies well and good. The owners of these properties have to pay the society maintenance charge regarding this. These are what can be associated with maintenance charges.
How do developers decide the society maintenance?
A society’s maintenance charges are determined based on the life cycle cost of the building and can affect the buyers’ decision. When the construction of the building is underway, builders might not discuss the maintenance nor bring it up in detail.
What is the society's maintenance in gated residents?
Maintenance is a crucial element of housing societies. To sustain the building and the common amenities and to pay the society staff (security, janitors), every resident is charged a maintenance charge.
Can a builder use maintenance charges from buyers for personal use?
The maintenance charges accumulated from the buyers belong to the community only, and builders cannot use them for personal use.
Who is liable for the resident's society maintenance?
A maintenance contract is signed by the tenant and the builder as soon as you are a registered member, making both parties legally responsible for performing their obligations.