Understanding Maintenance Charges in Gated Communities

The latest RICS – Knight Frank report revealed that almost 50% people had apprehensions regarding maintenance of property while selecting a home.

What makes someone decide to live in a high-rise gated community?

Renuka Sharma always cherished the dream of living in a gated community. A swimming pool, lavish club house, kids’ play area and other facilities attracted her, which were lacking in her builder floor apartment.

One day she decided to sell her builder floor unit and buy a flat in a gated society. She was happy shifting into a place with all modern amenities. After two years she noticed seepage of water through her bathroom wall, destroying cabinets in her kitchen. She dialed her maintenance office and told them to address the problem. Despite repeated follow-ups things remained unchanged. Such stories are common across many housing societies where maintenance remains a key concern for residents who despite paying for it are not able to enjoy good services.

In fact the latest RICS – Knight Frank report revealed that almost 50% people had apprehensions regarding maintenance of property while selecting an affordable home.

What should people like Sharma do in such cases where the Resident Welfare Association(RWA) is not maintaining the society properly?

What does RERA say?

According to Section 11 (4) (d) the promoter is responsible for providing and maintaining essential services at reasonable charges, till the taking over of the maintenance of the project by the association of allottees.

This provision clearly lays down the rule for developers to provide essential services at reasonable charges. On the other hand, residents can often be seen protesting against builders for poor maintenance services. Some builders have their own maintenance companies which take care of the society till the time it is handed over to the residents. However, there are complaints that some builders never allow residents to take over the societies due to vested interests.

In fact, many RWAs and association of allotees have taken over the societies but are not able to maintain the society and provide good services. Residents first have to fight with the resident bodies for essential services like cleanliness, repairing work, lift maintenance and other services.

As soon as you move into a society, you should form an RWA and take over the affairs of the society in your hands. Where builder is managing the society, we can ask him to furnish details of accounts to residents so there is transparency with regard to funds.

Maintenance Charges

Every society decides their own maintenance charges, depending on the facilities and requirements available to residents. On an average, one pays between Rs 1.5 to 3 per sq ft or higher as maintenance charges in a gated society.

For example, if you pay Rs 2 per sq ft as maintenance charge and live in a 1000 sq ft flat then you have to pay Rs 2,000 per month. Similarly, the amount decreases or increases as per the size of the flat and the per sq ft rate levied by the RWA. Often in new societies, a builder takes advance maintenance for 1 or 2 years.

Maintenance charges primarily includes charges towards upkeep and maintenance of common areas and facilities, security services including CCTV, etc. Common facilities include elevators, club house and generators. The buyer should keep in mind and check that in the name of maintenance charges developers do not pad up charges which relates to developers’ overhead and administrative costs.

The Ministry of Finance issued a direction that in case the maintenance charges exceed Rs 7,500 per month per member, the entire amount is subject to 18% GST. Prior to 25th Jan 2018, GST exemption was available if the charges or share of contribution did not exceed Rs 5,000/- per month per member.

Maintenance Agreement

All residents are legally bound to pay maintenance charges as this is required for the upkeep of the society. It is not only mentioned in the maintenance agreement with the builder but also incorporated in the society bylaws. Once residents take over a society, they can decide the maintenance charges in general body meetings. Residents can always check the accounts of the society to ensure funds are being used properly. They can also seek clarification from the builder or the resident’s body.

Where to file a complaint?

If the RWA is not maintaining the society despite receiving maintenance charges or not listening to your complaints then you can file a complaint with the district consumer forum. If the claim exceeds more than Rs 1 crore then the case can be directly filed in the National Consumer Disputes Redressal Commission (NCDRC). However, the consumer can also approach NCDRC where he is not happy with the decision of the district consumer forum. You can also go to the RERA of your state and file your complaint.

In the case of Renuka Sharma, if the problem is identified to originate from within her apartment she must seek the help of the Association Maintenance or Builder Maintenance to address the issue. If the problem is identified to originate in an adjacent apartment, the owner of the apartment must be asked to address the same. In most RWAs, the charges collected will not address the individual issues inside the apartment unless this is specified in the agreement

In any case the support system that exists in a gated community is far superior to the builder floor apartment under any given circumstance

. Source: ETRealty

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