Society Maintenance charges: Supreme Court’s Decision

Society Maintenance Charges: Supreme Court's Decision

Supreme Court Decision Regarding Society Maintenance Fees The running fees assessed to a housing society's residents are called maintenance costs. An area's widely held property is maintained at a cost to the locals or property owners that reside there. Depending on the project, it may be collected on a monthly, semi-annual, or annual basis.

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The size of the property as well as the standard of upkeep determines the maintenance costs. The renter or owner is responsible for paying the maintenance fees whether your unit is rented or vacant.

The housing society's communal areas require upkeep. The shared spaces consist of       

Commercial facilities Community facilities Basements Common exits Common entrances Staircases Swimming pool

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Fire escapes Elevators Terraces Water tanks Terraces Play areas Parks

All of these are maintained in top shape thanks to the monthly maintenance fees you pay.

Residents of gated communities pay a set monthly amount that goes toward maintaining the society's facilities.

Maintenance charge calculation Builders in our nation charge between Rs 2 and Rs 25 per square foot in maintenance fees, depending on the city and region. The number of amenities provided by the housing society is directly inversely correlated with the maintenance fees. Facilities would be minimal if the society management charged Rs 2 per square foot. If the housing society administration charges close to Rs 25 per square foot for property of a comparable size, the amenities provided would be many and opulent.

To take advantage of the services offered within the society's facilities without interruption, this payment must be paid. The maintenance fees are the only source of funding for the administration and upkeep of shared facilities and services. Maintenance fees are typically paid annually, though this can change from case to case.

Decision of the Supreme Court Regarding Apartment Maintenance Fees Section (4) (d) of RERA requires the builder to provide and sustain the services at reasonable costs, up until they are taken over by the RWA or Residents Welfare Association of the housing society. Following are some items that must be preserved: 

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The builder is responsible for maintaining the society up until the RWA is created.

The sum is paid by the homebuyers to the builder. Later, RWA will be able to charge in accordance with its policies.

The buyer receives an allotment letter that includes information about the fees.

After the deposit is paid, this letter is issued.

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The RERA Act of 2016 guarantees that homebuyers won't be required to pay the builder any ad-hoc fees.

When making a reservation, the builder should disclose these fees.

The failure to disclose such costs leads to uncertainty down the road.

Clear rules on determining the maximum amount of maintenance charges have been provided by many State governments.

No builder may charge more than what is allowed by the State government's regulations.

Most of the time, the prices or sums are determined based on the size of the apartment. Therefore, depending on the size of their land, it may differ for inhabitants.

The builder is the only one who determines how frequently maintenance fees are collected.

Homebuyers must pay GST at 18%, according to the Ministry of Finance's most recent circular. If the monthly maintenance costs are more than Rs 7500, a GST charge is assessed.

Regulations regarding Maintenance Fees The following two methods are available to builders for collecting maintenance fees: 

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The builder is responsible for the project's upkeep for a while at first. He collects maintenance fees for this, which must be paid by the owner or allottee in a single payment or in installments.

A specific sum must be paid by the owner or purchaser to maintain the structure.

These two approaches are permissible under the RERA Act's rules, but only if the following criteria are met:    

The sum received as a maintenance fee or corpus fund cannot be considered part of the builder's income.

For the purpose of depositing corpus cash and maintenance fees, the builder must open separate bank accounts.

The interest accrued on these sums cannot be credited to the builder's account. On the same account, it would accumulate.

Separate accounts or ledgers must be maintained and must be certified or audited by a Chartered Accountant.

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The builder should provide the remaining sum to RWA when premises maintenance is transferred to their care.

The accounting statement must be given to RWA by the builder. The Chartered Accountant should properly certify the statement.

The maintenance fee does not provide the builder with a source of income. He merely serves as a managing agent for the project up till the creation of RWA.

Law on Flat Maintenance charges You should be aware that there are guidelines and restrictions when a builder collects a significant sum for maintenance fees. Here, we'll talk about them:     

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In our nation, each state government has its own set of regulations that control apartment buildings and housing complexes.

Every owner has access to the project's income and expense summary. Checking whether the amount gathered is reasonable is the purpose of this.

The residents should understand that the maintenance fees they pay should be the same for all residents.

If a statute or bylaw is proposed, it can only be put into effect if all residents agree to it.

Only the necessary services offered on-site should be subject to fees. Only costs for necessary services should be included in the maintenance fees. For instance, a swimming pool that is not in use cannot be included in your maintenance.

According to RERA regulations, the developer needs OC to give the buyers possession of its properties. The developer cannot deliver the units to the buyers without OC. If the owners are unhappy with the services offered by the builder, they can also contact the consumer forum. If their complaints go unresolved for specific reasons, they can have them resolved.

Maintenance charges for Apartments Residential communities typically charge maintenance fees based on the carpet area of each apartment. If the units are the same size, other variables may occasionally be taken into account as well. A buyer should be aware of the amenities that will be offered.

Maintenance fees are paid in advance by the builders for a period of six months or a year.

RERA Regulations The RERA establishes the following provisions:  

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All housing societies with more than eight units or 500 square metres are required by the RERA Act to register with their State's RERA prior to opening.

Ongoing projects that did not have Completion Certificates (CC) as of the Act's start date may be required to submit a registration application within three months.

Within thirty days, the authority may accept or reject the application. Promoter information on the project must be provided on the RERA website when the registration request has been approved.

Failure to register with a housing society would result in a fine of 10% of the total project value or up to 3 years in prison.

Real estate brokers who assist in the sale or acquisition of real estate must register with RERA.

Supreme Court's Decision Regarding Society Maintenance charges All buyers of the units shall be responsible for paying the maintenance fees. They must pay the sum regardless of how much space they occupy. The developer is required to pay the maintenance fees for unsold apartments until they are sold. It is necessary to select a system that will charge homebuyers for maintenance. For charging the same, there is no set formula or suggestion. Every homeowner is responsible for paying the maintenance fees for their unit in the housing society, per the Real Estate Act of 2016.

Maintainance charges The following are many features of maintenance fees:  

Service fees cover equipment, security, housekeeping, and common area electricity and power backup fees.

Expenses for things like elevator maintenance and building upkeep.

Rules and Regulations Regarding Maintenance charges for Apartments According to RERA, the developer or promoter is responsible for maintaining the housing society up until the formation of the RWA. The costs must be covered by the home buyer.

The amount the builder is charging for maintenance fees should be fair. The promoter & purchaser must execute an agreement, per RERA's requirements. This agreement details the maintenance fee that would be assessed. It is important to state the cost split and the frequency of collection. Everything becomes open to the customer, and it becomes quite transparent. The RERA is the organization in charge of protecting homebuyers' rights.

How Are Flat Maintenance charges calculated?

The maintenance fees for a housing society unit can be determined in a variety of ways.

These are the methods: 

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Per square feet charge: The most popular way for builders to determine maintenance costs is to charge by the square foot. The sum fluctuates depending on the size of the project's unit.

Equal maintenance fees: This is the most straightforward and practical way to collect maintenance costs. Each home owner in the project or society is required to pay the same amount.

Hybrid approach: There are two maintenance fees. Area-based charges are included in one component, while common expenses are included in the other.

There isn't a suggested maintenance fee calculation approach that is error-free. From society to society & state to state, it differs. Ruling by the Supreme Court Society Rules for maintenance fees have been included to protect homeowners' rights. The RERA Act is very helpful in regulating the procedure. No broker website outlines the norms and guidelines that must be followed by the builders from the time the project is launched until RWA is established. The homeowners can always get information about the project and its builders from the RERA of their state.

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