UNDERSTANDING MAINTENANCE CHARGES

UNDERSTANDING MAINTENANCE CHARGES under RERA (Real Estate Regulation and Development Act, 2016)

INTRODUCTION

Builders generally give Allotment letters to the buyers after the buyers pay the maintenance charges. These are levied for maintaining the essential services and the common areas in the society, and is in accordance to the Real Estate (Regulation and Development) Act, 2016 (“RERA”).

The builder provides maintenance initially till such time the Resident Welfare Association (“RWA”) is formed subsequently and takes over the task. The builder cannot charge maintenance once RWA is formed. While the builder charges minimum fair maintenance for the services provided, the RWA can change the amount and lay down its own rules for maintenance charges accordingly.

UNDERSTANDING MAINTENANCE CHARGES under RERA

As per Maharashtra Real Estate Regulatory Authority (“MahaRERA”) builders cannot charge maintenance for buildings without an OC. It can also not charge from those who do not take over the possession.

Important Provisions of RERA

Section 11: Functions and duties of the builder.

Sub Section 11(4)(d) – The promoter shall be responsible for providing and maintaining the essential services, on reasonable charges, till the taking over of the maintenance of the project by the association of the allottees.

Section 11(4)(g) – The promoter shall pay all outgoings until he transfers the physical possession of the real estate project to the allottee or the associations of allottees, as the case may be, which he has collected from the allottees, for the payment of outgoings such as land cost, ground rent, municipal or other local taxes, charges for water or electricity, maintenance charges, including mortgage loan and interest on mortgages or other encumbrances and such other liabilities payable to competent authorities, banks and financial institutions, which are related to the project.

Proviso to Section 11(4)(g) states provided that where any promoter fails to pay all or any of the outgoings collected by him from the allottees or any liability, mortgage loan and interest thereon before transferring the real estate project to such allottees, or the association of the allottees, as the case may be, the promoter shall continue to be liable, even after the transfer of the property, to pay such outgoings and penal charges, if any, to the authority or person to whom they are payable and be liable for the cost of any legal proceedings which may be taken therefore by such authority or person.

Section 19: Rights and Duties of the Allottees

Sub-Section 19(6) – Every allottee shall be responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale and shall pay at the proper time and place, the share of the registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent, and other charges, if any.

Sub-Section 19(7) -The allottee shall be liable to pay interest, at such rate as may be prescribed, for any delay in payment towards any amount or charges to be paid under sub-section (6).

Sub-Section 19(8) -The obligations of the allottee under sub-section (6) and the liability towards interest under sub-section (7) may be reduced when mutually agreed to between the promoter and such allottee.

The Act provides for interest by way of penalty, however does not prescribe the percentage.

Important Provisions of The Maharashtra Apartment Ownership Act, 1970 and Rules, 1972

Besides the provisions of RERA it is also important to know these provisions while understanding maintenance charges.

Common Areas and Facilities

Section 2(f) defines common areas and facilities and Section 2(g) defines common areas and facilities which covers maintenance charges.

The common areas are the undivided parts of the commonly owned premises. The areas such as the parking lot, lawns, corridors, lobbies, elevators, etc are not owned by a single individual owner. The responsibility for upkeep and maintenance of these areas is collective.

What is covered under society maintenance?

Also known as Common Maintenance Charges. It is collected to cover various expenses like Salaries of Staff, Liftmen, Watchmen, Printing and Stationary, Audit Fees etc. At the rate fixed by General Body of the Housing Society at its meeting.

Who should pay maintenance owner or tenant?

In the case you have rented your apartment, the tenant is liable to pay the maintenance charges as per the norms of the society. However, it can be agreed as proportion between the owner and the tenant. The builder  has no role in it.

Maintenance and Repair

Rule 40 (Maintenance and Repair) prescribes as follows:

(1) Every owner must perform promptly, all maintenance and repair work within his own unit, which if omitted would affect the Condominium in entirety or in a part belonging to other owners, being expressly responsible for the damages and liabilities that his failure to do so may endanger.

(2) All the repairs of internal installations of the unit such as water, light, gas, power, sewage, telephones, air conditioners, sanitary installations, doors, windows, lamps and all other accessories belonging to the unit area shall be at the expense of the apartment owner concerned.

(3) An owner shall reimburse the Association for any expenditures incurred in repairing or replacing any common area and facility damaged through his fault.

There is no provision of application of interest on delayed payment mentioned in the Act or the Rules. However, if the bye-laws of the condominium specify a certain percentage on delayed payments by way of penalty, then it shall be applicable.

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