Owing a flat is not just a piece of real estate, it is an emotion and achievement for many. However, this joy is accompanied by a sense of responsibility to strive in a community. When you buy or rent a flat, you’ll encounter regular maintenance charges. These payments are essential for the upkeep and management of the property, ensuring residents enjoy a comfortable and secure living environment.
Flat owners pay for the maintenance of apartments based on their building size and the amenities offered to them. The fees charged help keep shared areas running, safeguarding the quality and safety of the building over time.
This guide delves into everything you need to know about flat maintenance charges, from their purpose and calculation methods to relevant regulations and cost-saving tips.
What is Maintenance for Flats?
Owners of residential buildings must pay regular maintenance charges for flats to keep common areas and facilities operating properly. These flat maintenance charges help to maintain different types of services and basic utilities needed to run and keep the building secure.
Standard building average maintenance charges include services like water supply and waste disposal. High-end societies often incur additional costs for maintaining swimming pools, gyms, and clubhouses.
However, disagreements often arise among residents regarding the transparency of these payments. To avoid conflicts, housing societies and Residents’ Welfare Associations (RWAs) must maintain clear records and foster open communication. This ensures everyone understands their responsibilities in maintaining the property.
How are the Maintenance Charges for a Flat Determined?
The method of determining maintenance charges for flats depends on who oversees the property—builders or housing societies. Property size, amenities, and operational costs influence these charges.
Who Determines the Charges?
Before the formation of the housing society, the builder establishes the maintenance fee rates. After obtaining registration, the community group delegates the duty of property management and maintenance to the governance committee. They review budget plans every year to determine service fees and distribute expenses equally among all house owners.
Method Of Calculation
Per Square Foot Model:
Organisations may charge members based on the floor space of their flats. For example, if a flat measures 1,000 sq ft with a maintenance rate of ₹25 per sq ft, the annual fee will be ₹25,000.
Equal Distribution Model:
Every flat owner makes the same contribution regardless of their unit’s size. This payment structure works better in simple societal setups.
Hybrid Model:
Societies divide expenses differently between members. They pay equal amounts for security and amenities but receive bills based on power usage or their flat sizes.
Usage-Based Model:
The maintenance charges for flats depend on how much water and electricity you use.
Understanding these models helps residents avoid misunderstandings and ensures transparency in maintenance payments.
Main Components of Maintenance Charges
Maintenance costs comprise fixed and variable expenses, which collectively support the upkeep of residential societies. Here’s a breakdown:
Security Services:
The building’s security team and support staff need payment for installing and maintaining CCTV cameras, lifts, and other related hardware. In case of any system breakdown or technical glitch, money is withdrawn from these security services funds for repair.
Cleaning and Sanitation:
Everyday cleaning of public spaces, staircases, lobbies, gardens, and parking spaces forms a significant part of the average maintenance charges.
Electricity:
Electricity covers shared lighting and streetlights within the property. From libraries and gyms to clubhouses, wherever electricity is used, it gets added to these charges.
Water Supply:
Maintenance fees also include paying for water service and waste disposal systems.
Repairs and Maintenance:
This component covers both routine and urgent repairs, such as elevator servicing, plumbing, electrical work, and general building maintenance. It ensures that the structure and systems of the property are always in working order.
Staff Salaries:
Residential societies pay all salaries and worker payments for their housekeeping employees as well as gardeners and electricians from the maintenance funds collected from residents.
Insurance:
Communities choose insurance policies to protect their properties from natural disasters, fire, theft, or other unforeseen events. This helps mitigate financial risks and maintain the integrity of the property.
Amenities:
High-end residential societies need budgetary support for facilities like gyms and swimming pools, plus private club spaces.
Administrative Costs:
This portion of the maintenance fee goes towards accounting services, audits, and legal consultations related to society management and governance. It ensures smooth administrative operations and legal compliance.
Sinking Fund:
A portion of the maintenance fees is allocated to the sinking fund, which is used for large-scale repairs and replacements, such as repainting the building or installing new elevators.
By understanding these components, residents can effectively monitor spending and ensure that funds are being allocated appropriately, keeping flat maintenance charges transparent and accountable.
Supreme Court Judgement on Maintenance Charges
The Supreme Court of India has made pivotal rulings to ensure the fair handling of maintenance charges for residential properties. Through multiple judgments such as Rasila S Mehta vs. Custodian, Nariman Bhavan, Mumbai (2011) and Utpal Trehan vs. DLF Home Developers Ltd. (2022), the Supreme Court of India maintains fair and transparent practices when dealing with maintenance charges for flats disputes.
Under a landmark decision, the Supreme Court mandated that maintenance fees must be levied equally among all residents without any discriminatory practices. A builder needs documented evidence when asking residents to pay fees. When the housing society starts working, the builder needs to give the society all accounting records and hand over full management control within a realistic period.
According to the Court, builders must take care of unsold flat maintenance charges because they remain responsible until the units sell. The law makes everyone who lives or stays in the building pay a share of the upkeep costs.
These rulings emphasise the necessity for developers to comply with legal obligations and maintain transparency in financial dealings. Residents who believe they have been subjected to unfair maintenance charges can seek legal recourse to ensure their rights are protected.
RERA Rules and Regulation on Flats Maintenance Charges
The Real Estate (Regulation and Development) Act (RERA) establishes clear industry standards for regulating flat maintenance payments. These rules for maintenance charges aim to safeguard homebuyers by ensuring transparency and accountability in how builders and housing associations operate.
Key Provisions under RERA
Transparency in Charges:
Developers need to state maintenance costs upfront in their sales contracts. If developers fail to do so or include ambiguous terms, RERA intervenes to address these discrepancies.
Handing Over Maintenance to Society:
Builders are responsible for maintaining the property until residents form their housing association. Once the association is established, developers must transfer full control of the maintenance fund and all related official records to the society.
Accountability:
The law compels developers to maintain a separate account for maintenance funds to prevent any misuse or diversion of funds for purposes unrelated to building upkeep.
Defect Liability:
The builder remains responsible for maintenance charges for apartments due to poor construction quality or faulty workmanship for five years after giving residents access to the property. Any damages within this period must be repaired by the developer at no additional cost to the residents.
Dispute Resolution:
Under RERA, residents can file complaints with the authority to resolve maintenance charges for flat disagreements.
By following RERA rules for maintenance charges, both builders and house owners can foster transparency, accountability, and fairness in managing the upkeep of residential properties.
Factors Affecting Maintenance Charges of a Flat
Several factors influence the flat maintenance charges, leading to noticeable differences across housing societies. Here’s an overview of the key determinants:
Size of the Flat:
Homes with larger square footage pay more maintenance fees when societies use the per-square-foot method for the calculation of maintenance charges for apartments.
Number of Residents:
Societies with a larger number of residents spread maintenance fees between residents, potentially reducing individual contributions.
Amenities Offered:
Housing societies that offer upscale amenities such as swimming pools, gyms, and clubhouses need to spend more money on upkeep.
Location:
Homes in prime locations often come with higher maintenance costs due to increased service charges and utility expenses.
Age of the Building:
Older buildings typically require more frequent repairs and upkeep, leading to higher overall average maintenance charges.
Staff Requirements:
Societies that employ a greater number of security personnel, housekeeping staff, and other workers tend to have increased staff-related expenses, contributing to the maintenance charges of flats in India.
Utility Costs:
Maintenance charges for flats factor in expenses for water, electricity, and fuel for power backups, all of which depend on usage and prevailing local rates.
Sinking Fund Contribution:
Social groups that plan for the future put more funds into their sinking account, which leads to higher monthly payments. Some people might not agree with this; therefore, prior transparency is necessary.
Government Taxes and Levies:
Property tax, GST, and other charges also impact how much money goes to building upkeep.
Management Efficiency:
Property maintenance fees decrease when managers handle expenses effectively in their society and take up necessary cost-control measures.
By understanding these factors, societies and residents can work together to implement cost-saving measures while maintaining high standards of living.
GST on Flat Maintenance Charges
The Goods and Services Tax (GST) applies to maintenance fees for flat owners in India. Here’s a concise breakdown of what you need to know:
GST Applicability:
When flat maintenance grows beyond ₹7,500 a month, owners must pay 18% GST.
Exemptions:
GST rules do not apply when monthly flat maintenance charges remain under ₹7,500 per unit or annual society revenue stays under ₹20 lakh.
Components of GST:
GST is applicable only on the taxable components of the flat maintenance charges, excluding property tax and water charges.
Input Tax Credit (ITC):
Societies can claim ITC for GST paid on eligible resources and services, which helps reduce their overall tax liability.
To avoid penalties and ensure smooth financial operations, societies must comply with GST on maintenance charges rules, maintain transparent records, and prepare accurate tax documents for residents.
The Best Way to Reduce Maintenance Charges
A teamwork approach is key to reducing maintenance fees. Here are some effective strategies:
Energy Efficiency:
Upgrade lighting fixtures to energy-efficient options and consider installing solar panels. Investing in high-efficiency elevators can also significantly lower electricity consumption.
Water Conservation:
The practice of collecting rainwater along with fast leak detection lowers water-related expenses.
Regular Maintenance:
Routine maintenance of elevator and generator systems stops unexpected breakdowns and prevents huge repair bills.
Staff Optimization:
A strategic analysis of necessary staff roles and robotic process replacements reduces overall salary payments.
Efficient Waste Management:
Any society can lower its garbage removal expenses from maintenance charges of society by adopting recycling programs or setting up composting systems for biodegradable waste.
Negotiating Contracts:
A society obtains lower service rates when you regularly revise contracts with service providers for security and housekeeping work.
Bulk Purchasing:
Ordering large volumes of cleaning supplies and everyday items helps you save money on purchasing costs.
Transparent Budgeting:
Conduct periodic audits of financial records to identify potential savings and ensure funds are used appropriately.
By adopting these measures, societies can maintain high-quality services while effectively reducing flat maintenance charges.
Bottom Line
Flat maintenance charges are vital for the smooth functioning of residential societies, ensuring well-maintained common spaces and amenities. Effective cost management and adherence to legal norms can optimise expenses while maintaining high service standards.
At AsmitA Grand Maison, we ensure transparency, comfort, and convenience in all aspects of property management. Experience hassle-free living with AsmitA India Realty’s RERA-approved property with world-class amenities and fair maintenance practices that align with all legal requirements.
Frequently Asked Questions
Do tenants also have to pay maintenance charges?
If the rental agreement mentions the payment of flat maintenance charges, then the tenants must pay that once they occupy the apartment as they use up the facilities.
Do maintenance charges remain fixed, or do they increase annually?
Yes, flat maintenance charges increase annually due to factors like inflation, more number of repairs needed, changes in labour costs or the addition of a new amenity.
What happens if any resident continuously delays or refuses to pay the maintenance charges?
If any resident refuses to pay the maintenance charges of flats in India, then the Housing Society committee can take actions against them, such as limiting access to amenities, sending reminder or caution notices, or taking legal action against defaulters.
Is GST mandatory on all components of maintenance charges?
No, GST only applies to a few expenses. To lower the tax burden on residents, monthly maintenance charges within a limit of Rs 7500 are exempted from GST.
Can I challenge unfair maintenance charges?
Yes, residents can challenge the breakdown of maintenance charges of society if they feel that it is not justified. They can either approach the housing society committee or take legal action if needed.