How are Maintenance Charges Calculated?

There are different procedures or methods adopted by an association or society for collecting monthly maintenance fee. Some of the important practices that are prevalent are following.

  • Flat monthly fee:
    Under flat monthly fee, apartment owner’s association or society calculates sum or total maintenance charge and divides equally among all flat owners. This system is generally followed where apartments are of the same size.
  • Per Square feet rate:
    Under this method, rate or fee varies depending on square feet owned by apartment owners. Larger the square feet owned, higher will be the monthly maintenance fee. This is widely practiced in Apartment societies with different sizes of apartments.
  • Partial flat rate:
    Under this method, association or society charges flat rate for a limited square feet and each additional unit will be charged extra. For e.g.: Flat owners who owns up to 1000 sq ft will be charged fixed rate and for addition of 100 sq ft, will be charged 2 per cent extra. In this case, all flat owners with 1000 sq ft pay equal amount but flat owners of 1100sq ft, 1200 sq ft and 1500 sq ft pay different amount towards monthly maintenance fee.
  • Mixed approach:
    It’s a central approach to maintenance charging. Generally followed in apartment societies with variable sized apartments. Here there is a per square feet charge, which is generally low plus total expenses divided equally among the flats.

The common expenses will include the amounts determined to be payable as such by the Society or Association. It includes expenses such as expense of administration, maintenance, repair or replacement of common areas and facilities. So long as there is no dispute, any system acceptable to all the apartment owners can be implemented on the basis of agreement or consensus.

Method of calculating maintenance fee varies depending on the agreement or byelaw of an association.

What are Maintenance Charges? Why should I pay them?

In real estate, the residents or owners of a property in a specific area are charged for maintenance and operations of the commonly owned property areas. This charge is called maintenance charge.

Maintenance charge is generally levied periodically. It is required to fund operations related to upkeep, maintenance and upgradation of such areas, which are not directly under any individual’s ownership.

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The main charges levied by the society can be categorised as  -

(i) Property Taxes

(ii) Water Charges

(iii) Common Electricity Charges

(iv) Contribution to Repairs and Maintenance Fund

(v) Expenses on repairs and maintenance of the lifts of the society, including charges for running the lift

(vi) Contribution to the sinking fund

(vii) Service charges

(viii) Car Parking Charges

(ix) Interest on the defaulted charges

(x) Repayment of the installment of the loan and interest

(xi) Non-occupancy charges

(xii) Insurance Charges

(xiii) Lease rent

(xiv) Non-agricultural tax

(xv) Other charges.