A Guide For Determining The Maintenance Cost Of A Flat
Thesizeofyourapartmentandtheamenitiesofferedbyyourcomplexorsocietyhasa majorimpactonhowmuchupkeepwillcostyou.Asyouputmoneydownoverthecourse ofyourlife,owningahomeislikerealizingadream.However,youmustbringupthe maintenancecoststhroughouttheprice-negotiatingprocessinordertomakeawise purchasedecision.Additionally,youshouldbeawareofwhatisincludedinthispriceas wellasthelawsthatprotectbothbuyers'andsellers'rights.
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Thefirstadditionalcoststhatspringtomindwhenpurchasingahomearestampdutyand registrationfees.Thecostofmaintenance,whichisanongoingexpense,mustbeincluded inbeforeyoupurchaseahome,anditisanadditionalcostthatyouwillhavetobear.
Whatdoesthisupkeepcost?Thisisthepricepaidformaintainingtheexteriorofthe apartment,thewatersupplysystem,thebuilding'scommonareas,andanyotherfacilities thatwouldbeapartofthecomplexandsociety.
Factors to Consider When Calculating Maintenance Costs
Generallyspeaking,maintenancecostscoverthecostsassociatedwithmaintainingallthe commonareasyousharewithotherapartmentowners.Youmustpayafeetothe residentialwelfaresocietyforthisonamonthlyorannualbasis.Additionally,thesizesof yourapartmentaswellastheamenitiesyouuseheavilyinfluencethisprice.
Ifyoudon'tconsiderthesefeeswhenmakingyourpurchase,youcanbeforcedtopaythe pricethewelfaresocietydemandsafterobtainingyourproperty.Therefore,youmust determineandnegotiatemaintenancefeesbeforesigningthepropertydocuments.You havetherighttoaskaboutthesecosts,whichismoresignificant.
Youmustgooverthedetailsofthepropertyownershipprovisionwiththesellerifitcalls foryoutopaythemaintenancechargeinadvance.Furthermore,uptoINR7,500in propertymaintenancecharges,youareexemptfrompayingGST,accordingtogovernment regulations.OnlyifthepriceismorethanthisamountdoesGSTapply.
Thereareafewmorefactorstotakeintoconsiderationwhenpurchasingapropertythatis stillbeingbuilt,includingthetransferprocess,documentationneeds,pricingnegotiations, etc.Eventhoughtherearemanythingstoconsiderbeforebuyingafullybuiltproperty, thereismorehomeworktobedonewhenbuyingaflatorapartmentthatisstillunder constructionandfiguringoutupkeepcosts.
Understanding Accurate Maintenance Cost Calculation
Yourflatmaintenancefeeincludesavarietyofcharges.Everyhomeownerinthe communitymustpaysomeexpenses,whileeveryoneelsesharesinothersequally. Additionally,youmustdeterminethemaintenanceofanon-occupancychargeforyour apartmentifyoukeepitemptyafterthepurchase.Thisistrueevenifyoudon'treside therebecauseserviceslikesecurity,housekeeping,etc.,areofferedtokeepyourapartment maintainedandsecure.
Thefollowingtableliststhenumeroustypesoffeesusedtoestimatethecostof maintainingyourapartmentorhome:
Types of Flat Maintenance Cost
Sinkingfund
Applicability of Maintenance Cost
0.25%orhigheramountofeachflat’s constructioncost.
Non-occupancycost 10%oftheservicechargesforunoccupiedor rentedproperty.
ServiceExpenseslikesecurity, housekeeping,electricitysupplyfor commonareas,etc.
Dividedequallyamongallthepropertyowners.
Equallypaidbyalltheflatownersofabuilding. Parkingcost Numberofparkingslotsoccupiedbyflatowners. Repairingthebuilding 0.75%oftheconstructionchargeofeveryflat.
Elevatorrepairingcharges
Watercharges
Totalwaterconsumptionornumberofinlettaps ofaflat.
Sinkingfund 0.25%ofeachflat’sconstructioncost,charged annually.
Different Factors Considered in the Maintenance Cost Calculation
Nowthatyouareawareofthevariouschargekindsthataretakenintoaccountwhen determiningthemaintenancecostsofaflat,itistimetograspwhatthesetypesmean.
Tohelpyoubettercomprehendeachcategory,thefollowingdetailsareprovided:
Repair and maintenance charges: Beforeyoucalculatemaintenancecosts,youmustfirst payforserviceslikeinternalroads,drainagefacilities,apumpingsystem,anelevator, securityequipmentordevices,generatorfacilities,streetlights,andothersimilarcommon amenities.
Service charges: Theseexpensescoverthingslikeelectricityinpublicspaces,liftdrivers, parksandgardens,security,cleaners,etc.
Vehicle parking fees: Ifyouownacar&parkitinaspecifiedspace,thesefeeswillbe assessed.Thepricesfortwo-&four-wheelersalsodiffer.
Non-occupancy fee: Ifyouarenotdwellinginyourapartment,youwillbeassessedthis fee.
Water charges: Waterchargesarebasedonthenumberofwaterinletsinyourapartment.
Sinking charge: Anemergencyfundissetasideincaseofunforeseensituations.The amountofthisfeeisdeterminedbythehousingorganization'sgoverningcommittee.
Property Tax: Propertytaxesareleviedascompensationforpropertyownership.The state'sdesignatedauthorityisinchargeofcollectingthistax.
Default payment interest: Interestforlatepaymentsonlyappliestopeoplewhohave fallenbehindonavarietyofmaintenancefees.Forlatepayments,youwillbechargeda maximumpenaltyof21%annually.
Insurance premiums: Themajorityofconstructionequipmentisannuallyinsured.Asa result,eachresidentmustdividetheannualinsurancepaymentanddetermine maintenancefeesforthemindividually.
Rent fees: Youmustpaythesefeesifyouchoosetorentorleaseaunit.Typically,itis determinedusingthesquarefootsizeofthelandarea.
RERA Guidelines for Maintenance Cost Calculation
TheRealEstateRegulation&DevelopmentAct,orRERAAct,of2016mandatesthat developersclearlyexplainallfeesinthebuilder-buyeragreement.Theseincludepayment plans,servicecharges,andanaccuratedescriptionofeachtopreventmisunderstandings lateron.
Thekeyelementsthatinfluencehowmaintenancefeesaredeterminedareasfollows:
Thebuilderandtheproperty'sbuyermustagreetoamaintenanceagreement.
Boththebuilderandthebuyermustconsenttomakingpromptpaymentsofthe maintenancecosts,suchasmonthly,semi-annually,quarterly,orannually.
Thebuilderisresponsiblefordeterminingthefrequencyandcostofmaintenance feesandadequatelydisclosingthem.
Upuntiltheapartmentisturnedovertothebuyer,thebuildermustmakeevery attempttocoverthecostofupkeep.
Followingtheownershipchange,theowneroftheapartmentisresponsiblefor payingallmaintenancefees.However,therenterisinchargeofmakingpayments andfiguringoutmaintenancecostsifmaintenancecostsarementionedintherental agreement.
Dependingontheservicesofferedbysocieties,maintenanceexpensescouldrange fromRs.2toRs.25orevenmoreeachmonth.
Buildersmaydemandpaymentforthenext12to24months'worthofmaintenance feeswhentheownershipcontractissigned.