Maintenance Charges in Housing Societies

By Investoxpert | 19 Jan 2024 | Real Estate

Maintenance Charges In Housing Societies

Living in a gated community and buying a property may be costly undertakings. The price of purchasing a home is only the start of the costs. It is everyone's duty to maintain extra facilities and amenities. Maintenance fees are levied in residential societies and are used to fund upkeep of the community.

Developers seldom ever tell purchasers of these costs at the time of sale. However, these charges have a significant effect on total living costs. Thus, before you sign the contract, be sure you know what you are getting into. This page will teach you about the precise meaning, computation method, etc. This will give you a better understanding of the maintenance costs.

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What Does Maintenance Charges Include?

There are several components to the maintenance fees. These factors allow the costs to vary from property to property. Thus, these are the fundamental components of the maintenance fees:

The building’s maintenance and repair costs
Service fees (equipment, electricity for common areas, security, and housekeeping)
The price of maintenance and repairs for elevators
Water bills and property taxes
Charges for non-occupancy
Parking fees

What Is The Importance Of Maintenance Charges In Housing Societies?

One of the mandatory payments that has to be provided on a regular basis according to the builder-buyer agreement is flat charges. Tenants who participate in a builder-buyer agreement are required by Section 6 of the RERA Act 2016 to make sure that these payments are paid on time.

The fact that there are several advantages to paying these costs down adds even more weight to the maintenance fees agreement. You won't have to handle things all by yourself, which is one of these advantages. For instance, you won't have to worry about maintaining things like motors, water tanks, security systems, problems with the power supply, etc. provided you, the buyer, pay the charge.

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How To Calculate Maintenance Charges?

It is imperative that buyers understand how maintenance expenses are calculated. In this way, buyers can easily understand the exact price they should pay. There are three major procedures based on which the maintenance charges are calculated in every society. Let’s have a look at these procedures.

Equitable maintenance charge: In communities where all apartments or flats are the same size, this method of calculating annual maintenance expenses is used. The majority of societies compute these fees at the conclusion of every month. Therefore, the inhabitants pay the maintenance fees on a regular basis.

Area-based charges or the per-square-foot technique: Societies with varying unit sizes are more likely to employ this way of calculating these costs.

Hybrid maintenance charge: Some societies use a hybrid approach to compute these costs, using the equal maintenance and area calculation methodologies. The costs for shared amenities must be paid by residents under a partially equal maintenance scheme. Common amenities include gardens, cleaning services, a kid's area, a swimming pool, and elevators.

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What Are The RERA Guidelines For Maintenance Charges?

Some of the rules that both parties need to be aware of while working with a real estate property have been outlined by the Real Estate Regulatory Authority (Rera) . These rules are as follows.

To prevent any disputes, the maintenance charge contract should be signed by both the buyer and the builder.
The maintenance fees should be paid on a monthly, yearly, or occasionally quarterly basis by both parties.
The property's maintenance agreement should include all the information on costs, extra fees, special circumstances, length of agreement validity, etc.
The builder will continue to cover the maintenance costs until the property is fully turned over.
The builder may negotiate and demand maintenance costs for a maximum of 12 or 24 months while the building is in possession.

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Maintenance Charges: GST

The GST amount on real estate maintenance fees has changed. Although consumers may not always be fully aware of this GST amount, it is their job to research the amount before moving forward. There are two situations in which GST is required.

GST would be charged if the total annual revenue for maintenance costs exceeds Rs 20 lakh.

Additionally, 18% GST will be added to the cost if the housing association pays the maintenance service provider more than Rs 7500 for each member.

What Are The Things To Remember When Considering Maintenance Charges?

Any real estate property's residents are entitled to a comprehensive summary of the maintenance costs. It might be paid on a yearly, quarterly, or monthly basis.

Both the service providers and the inhabitants are required to employ a variety of payment methods for maintenance fees.

It is the resident's obligation to pay the maintenance fees on time each and every time. In addition, obtaining a receipt is crucial for further evidence.

In general, maintenance costs for commercial real estate buildings are higher than those for residential ones.

Maintenance Charges in Housing Societies