Real Estate(Regulation and Development) Act(RERA), 2016 makes it mandatory for the developers to be responsible to deliver and maintaining the basic service at a fair price until the association of allottees takes the possession. As per RERA rules maintenance charges, a builder is required by the buyer for signing a maintenance agreement which specifies an amount and the frequency of maintenance. RERA has mandated that maintenance expenses to be mentioned in the agreement. After which the social organisation could figure out and pay the buyer for necessary requirement.
Maintenance Fees refers as an annual charge by the owner of building owner or tenant for maintenance, repairs, operations and service. RERA acts as a fence between the customers and voracious builders it provides the consumers access to a forum known as RERA complaint.
According to the RERA rules for maintenance charges for some of real estate developments. In it the builder agrees for maintaining the project upto a certain number of years and collect a maintenance fee from purchasee/allottee which could be paid one flat payment or installments.
Provisions under RERA
Section 6 of RERA provides whosoever has agreed to have an apartment, plot or building as it could be under the Section 13 shall be responsible to make necessary payments in the manner and the time specified in the agreement for sale and shall pay the share of registration charge, municipal tax, charge for water and power, maintenance, ground rent and all these fees shall be paid on time and in proper location.
So, buyer is responsible for paying the maintenance fee after taking the ownership of the property. The owner is also liable for paying maintenance fee until a tenant is found for the property. After which the tenant could pay the maintenance fee if it is specified in the owner tenant agreement.
Points to keep in mind regarding RERA rules for maintenance charges:
Till founding of The Resident Welfare Association, the promoter is responsible for society’s upkeep and collecting the fees from the home buyers. The Resident Welfare Association wil place fees by usually including in allotment letter, which is provided by the customer once the booking fee is paid.
RERA Act, 2016 provides that the residents are not required for paying any ad hoc costs at builder discretion. It shall be disclosed by builder at booking time; failing to reveal such kind of charges can cause the occupants to suffer as a consequence.
State government have formed clear rules for maximum amount of the maintenance fee which a builder collects an appropriate contractual arrangement is in place. As, not all the cultures have same charging structure. Area of the property is also used sometimes to calculate this.
The Frequency at which the maintenance fee is collected is to be determined by the builder. At the time of possession an advance of 12 or 24 months could be demanded. In a recent circular of the Finance ministry in case a flat owner’s monthly contribution to Resident Welfare Association exceeds Rs. 7500 a GST at rate of 18% will be incurred.
Responsibility on builder
Increase in demand for the residential and commercial has increased a hoard of new builders and developers who promise or deliver unique amenities for enticing the potential buyers. This results in a never ending dispute between the homebuyers and builder over the wrong practices which delays in handing the possession to the allottees, for which the allottee is getting affected both mentally or financially. As maintenance fee are regular monthly payment, its much advisable for having a better concept while leasing an apartment.
As per RERA maintenance charges law, it is the responsibility of the developer to pay the maintenance charges till the day he provides the control to the buyers. Builders shall hand over it to the association after validating that the building is leak free. Builders generally demand a one or two year maintenance fee upfront as part of the sale agreement and it shall disclose all expected cost to the buyers at time of sale.
These practices are not in violation of RERA Act and are acceptable, but shall meet the following criteria:-
The Builder shall not receive any income from the amount charged to purchaser/allottee as a contribution to a security fund for building maintenance. The builder is unable for depositing the funds into his business account as a result of this. The builder shall open separate bank account for building maintenance corpus. The building’s maintenance costs and these funds shall be deposited in these accounts. An interest earned on these will be credited to same accounts rather than the builder.
Builders shall keep separate accounts which shall be certified by a Chartered Accountant. This demonstrates the annual expenses from all these bank accounts which ensures that the money is used solely for the intended purpose. If builder provides possession to the allottees without arranging a domestic electricity connection and then agrees for paying the difference between the higher rate and normal rate for the connection, the difference shall not be charged to the maintenance account and shall be paid out of the builder’ pocket.
Builder shall also move over balance in all maintenance bank account as well as copy of Income and Expenditure Statement. Formally certified by a Chartered Accountant, when the Resident Welfare Association take over the maintenance. The key is that the builder manages the maintenance accounts intrust of the Residents Welfare Association for limited time and they do not provide a Source of Income for the builder.
RERA rules for maintenance charge:-
All the new apartment come with a set of maintenance fee. Its an essential component of Builder Buyer Agreement. Builder issues an assignment letter after the buyer pays the booking fee. Though the exact cost is not disclosed, if questioned during purchase, the builder could provide an estimate maintenance rate. If builder has not told buyer about age estimate of maintenance charges, homebuyer has rights to demand that from builder.
Calculation of maintenance charges
The RERA rules for the maintenance charges are structured differently in all society. Depending on the city and location, the maintenance fee can range from Rs.2 to more. Builder is required to pay maintenance charge for 12 to 24 months or till society is handed over to Resident Welfare Association. When you take the possession. The resident welfare association selects whether to collect the maintenance placed on a monthly or annual basis after taking over the society. The maintenance fee includes the housekeeping and cleaning, also the upkeep of the communal areas, equipment usage and other costs.
Additional Price for repair service and upkeep of common utilities such as lobby lighting, lift maintenance is split among flats. Electricity and Water Tariff are based on the per flat usage. His charge is higher in commercial properties than residential ones. These maintenance cost could be related to any cost of managing and maintaining the commercial property.
Buyers who get forced to take possession of homes in delayed housing projects. That do not have a clarence from the civic authority. They cannot be forced for paying monthly maintenance charges according to Apex consumer panel.
Types of Maintenance Charges
Maintenance charge includes the expenditure which are necessary for regular maintenance, repair and operation of residential complex. All these charge include a variety of services and facilities including but limit to :-
– Upkeep of common areas such as gardens, lobby, and corridors
– Provision of security services
– Cleaning and sanitation services
– Covering water and electricity expenses for common areas
– Maintenance of elevators
– Pest control services
– Landscaping and gardening
– Upkeep of amenities like gymnasiums, swimming pools, and community halls
– Service charges
– Fees for car parking
– Charges for non-occupancy
– Insurance charges
– Leases rent
– Non-agriculture tax
– Contributions to the election fund
– Any other applicable charges
Maintenance charges also include salaries of staff responsible for society’s upkeep, such as lift attendants, security personnel, etc.
