Simar Singh | 26 Jul 2022

Maintenance Charges: Meaning, Types, and Regulations

Maintenance Charges: Meaning, Types, and Regulations

Table of Contents

  1. Maintenance Charges: Meaning
  2. Handling of Maintenance Charges
  3. Types of Maintenance Charges


What vibes will your house give if it is poorly maintained? It will be addressed as nothing but a decaying and degraded place, negatively affecting the health of the residents. So this is a reason why it is important for you to maintain the appearance of your house so that it can operate at its maximum efficiency. When you switch apartments, apart from stamp duty and registration costs, one more thing is involved, known as "maintenance charges". Generally, the maintenance charges are calculated on the basis of the area of a property and the quality of maintenance. 

Maintenance Charges: Meaning

When you buy a home in a gated community, it comes with some expenses. So the housing societies seek maintenance charges from the residents for the added amenities and facilities. The maintenance cost may vary from Rs 1 to Rs 3 per sq ft. Sometimes, the real estate developers don't share the maintenance costs during the initial period of buying a unit. So, paying the charges for maintenance boosts the overall costs. Therefore, if you are on your home-buying journey, you need to know all the variations involved in maintenance charges. 

Also, NDRC has informed us that in the case of delayed projects where the developer has not yet received an occupancy certificate, the residents don't need to pay maintenance charges. It is because if your real estate developer has not yet received the occupancy certificate, it means that the project is not fully finished and not all services have been provided as promised by the developer. 

Also Read: Stamp Duty and Registration Charges in Mumbai

Handling of Maintenance Charges

The role of the builder is to handle the maintenance charges. It is mandatory for builders to follow certain guidelines at the time of handling the maintenance amount collected from the residents.

  • The maintenance money belongs to society

Charges collected from the residents belong to the society, and builders are not allowed to use them for any other purpose. The role of the builder is to take care of the housing unit for a specific period of time. In the long run, the maintenance of the building and the premises will shift to RWA. 

  • A separate bank account 

The role of the builder is to create an exclusive bank account by depositing maintenance contributions into it. After the formation of RWA, the builder or the developer hands over the maintenance contribution to them. 

When the developers give the maintenance amount to RWA, it becomes mandatory for an auditor or a CA to endorse that amount to be specifically used for the welfare of the building or society. The remaining amount, which is kept in the bank, will accrue interest. So, the interest figure will also belong to the maintenance account only, and the developer cannot intervene. 

Also Read- Know the Difference Between A Builder Floor & A Multi-Storey Apartment?

Types of Maintenance Charges 

Housekeeping charges, security guards/janitors, maintenance of lifts, tools and equipment used for maintenance, electrical maintenance, and other expenses are mostly shared equally among the residents of the building. A non-occupancy fee of 10% of service charges is charged on the flats that the people rent. Moreover, the parking expense is based upon the number of parking spaces available to the flat owners. 

Maintenance Charges: Detailed Description 

From the time you take possession of a gated community, you become an owner. As exciting and loving as it is to have a place which you can address as "my home", it also comes with a lifetime of responsibility too. Consider it as an investment rather than a source of stress. If you observe that the maintenance charges are reasonable and legal, there is no chance for you to consider them a financial burden. 

The below-mentioned points can be utilised to divide the maintenance costs:

  1. Service charge: The charge mostly covers electricity, security, lifts, parks, etc.

  1. Maintenance and repair charge: The internal road within the building, drainage and pumping system, generator facility, parking and street lights, security gadgets etc.

  1. Parking: Charges for two-wheelers and four-wheelers differ in rates. So, if you own a vehicle, you will have to pay maintenance charges, including your vehicle parking fees. 

  1. Water Cost: The cost of water is based on the number of inlets you have installed in your apartment. 

  1. A sinking fund: A small portion of the fund that is set aside, is eventually used during an emergency or to tackle unfortunate events. The housing governing body tends to decide on the sinking fund. 

  1. Defaulted payments: Late payments will charge residents a max of 21% annum of the charges. 

  1. Non-occupancy costs: These charges are levied for the rented flats and are 10% of the service charges. 

 As for RERA rules for maintenance charges, it is mandatory for the developer or the builder to deliver and maintain the basic services of the building at a fair cost until the RWA takes over. Maintenance charges are mandatory to ensure a peaceful and comfortable stay and should be paid by every apartment owner. The buyer is responsible for paying the maintenance charges after taking ownership of the flat. 

Also read: Franking Charges: Meaning, Calculation, and Alternatives

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