RERA Complaint

RERA Rules For Maintenance Charges

RERA rules for maintenance charges include the buyer being responsible for paying maintenance fees after taking ownership of the property. Keep reading for more info about maintenance charges.

The Real Estate (Regulation and Development) Act of 2016 (RERA) mandates that the developer be responsible for delivering and maintaining basic services at a fair cost until the association of allottees takes over. Under the RERA rules for maintenance charges, a builder requires the buyer to sign a maintenance agreement that specifies the amount and frequency of maintenance. RERA has mandated that the maintenance expenses be specified in the agreement so that the buyers are not surprised. Later, the social organisation can figure it out and bill the buyer for the necessary upkeep.

The term “maintenance fees” refers to an annual charge made by the building’s owners or tenants for maintenance, repairs, operations, and upkeep. RERA serves as a barrier between customers and greedy builders, and it also gives consumers access to a forum called RERA complaint.

As per RERA rules for maintenance charges in some real estate developments, the builder agrees to maintain the project for a certain number of years and collects a maintenance fee from the purchaser/allottee, which can be paid in one flat payment or instalments.

Provisions under RERA

Section 6 of the RERA also states that: Every allottee who has agreed, to take an apartment, plot, or building as the case may be, under Section 13, shall be responsible for making necessary payments in the manner and within the time specified in the said agreement for sale, and shall pay the share of the registration charges, municipal taxes, charges for water and power, maintenance, ground rent, and other fees must be paid on time and in the proper location.

The buyer is responsible for paying maintenance fees after taking ownership of the property. The owner is responsible for paying the maintenance fees until a tenant is found for the property. After that, the tenant might pay the maintenance fees if they are specified in the owner-tenant agreement.

Points to keep in mind regarding RERA rules for maintenance charges:

  1. Until the foundation of the Resident Welfare Association, the promoter is responsible for the society’s upkeep and collection of fees from home buyers. The RESIDENT WELFARE ASSOCIATION can then levy fees by its usually included in the allotment letter, which is sent to the customer after the booking fee is paid.
  2. The RERA Act of 2016 ensures that residents are not required to pay any ad-hoc costs at the builder’s discretion.
  3. It should be appropriately disclosed by the builder at the time of booking; failure to reveal such charges may cause occupants to suffer subsequently.
  4. Many state governments have established clear rules for the maximum amount of maintenance fees that a builder can collect if an appropriate contractual arrangement is in place.
  5. Not all cultures have the same charging structure; instead, it differs. The area of the flat is sometimes used to calculate it.
  6. The frequency with which maintenance fees are collected is determined by the builder. At the time of possession, he may request 12 or 24 months in advance.
  7. According to a recent circular from the Finance Ministry, if a flat owner’s monthly contribution to the RESIDENT WELFARE ASSOCIATION exceeds Rs. 7500, they must pay GST at the rate of 18%.

Responsibility on builder

The rise in demand for residential and commercial property has spawned a slew of new builders and developers who promise or deliver unique amenities to entice potential buyers. The same has resulted in a never-ending battle between homebuyers and builders over the builders’ unscrupulous practices to delays in handing over possession to allottees, in which case the allottee is the ultimate loser, suffering both mentally and financially. Because maintenance fees are regular monthly payments, it’s always advisable to have a good concept of them when leasing an apartment.

According to the RERA apartment maintenance charges law, it is the developer’s responsibility to pay all maintenance charges until the day he turns over control to the buyers. The Builder must hand it over to the association after validating that the building is leak-free. Builders usually demand a one- or two-year maintenance fee upfront as part of the sale agreement, and they must disclose all expected costs to buyers at the time of the sale.

The practices listed above are not in violation of the RERA Act and are thus acceptable, but they must meet the following criteria:

  1. The builder does not receive any income from the amount charged to the purchaser/allottee as a contribution to a corpus fund or for building maintenance. The builder is unable to deposit the funds into his business account as a result.
  2. The builder must open separate bank accounts for the building maintenance corpus and the building maintenance costs, and these funds must be deposited into these accounts.
  3.  Any interest earned on these funds will be credited to the same accounts rather than the builder.
  4. The builder must keep separate accounts, which must be certified by a Chartered Accountant that demonstrates the annual expenses from these bank accounts, ensuring that the money was used solely for the purpose intended.
  5. If a builder gives possession to allottees without arranging for a domestic electricity connection and then agrees to pay the difference between the higher rate and the normal rate for the domestic connection, the difference cannot be charged to the maintenance account and must be paid out of the builder’s resource.
  6. The builder must also move over the balance in each of the maintenance bank accounts, as well as a copy of the Income and Expenditure Statement description, officially certified by a Chartered Accountant, when the Residents Welfare Association takes over the maintenance.
  7. The key premise is that the builder manages the maintenance accounts in trust for the Residents Welfare Association for a limited time and that they do not provide a source of income for the builder.

RERA rules for maintenance charges are compulsory

Every new apartment comes with a set of maintenance fees. It is an essential component of the builder-buyer agreement. The builder issues an assignment letter after the buyer pays the booking fee for the apartment. Though the precise cost is not disclosed, if questioned during a potential purchase, the builder can provide an average estimate of the maintenance rate. If the builder has not told the homebuyer about the age estimate of the maintenance charges, the homebuyer has the right to demand that the builder inform them.

Calculation of maintenance charges

The RERA rules for maintenance charges are structured differently in each society. Depending on the city and location, maintenance fees might range from Rs.2 to Rs.25 or even more. The builder may require you to pay the maintenance charge for 12 or 24 months or until the society is handed over to the RESIDENT WELFARE ASSOCIATION when you take possession. The RESIDENT WELFARE ASSOCIATION selects whether to collect the maintenance levy on a monthly or annual basis after taking over the society. The maintenance fee covers housekeeping and cleaning, as well as the upkeep of communal areas, equipment usage, and other costs.

  • An additional price for repair services and upkeep of common utilities such as lobby lighting and lift maintenance is split evenly among the flats. Electricity and water tariffs are based on per-flat usage.
  • The maintenance charge is higher in commercial properties than in residential ones. These maintenance costs can be related to any cost of managing and maintaining the commercial property.
  • Home buyers who have been forced to take possession of their homes in delayed housing projects that have not gotten an OC from the civic authority concerned cannot be forced to pay monthly maintenance charges, according to a recent judgement by the apex consumer panel.

Final thoughts

There is a steady increase in the demand for residential and commercial property. It’s always better to know about the maintenance charges under RERA at the time of booking an apartment as they are recurring monthly charges. Visit Vakilsearch to explore more about getting licences or registrations for any legal, tax, and compliance matters.

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