Understanding All Maintenance Costs
Eachresidentialcommunitychargesamaintenancefeetocoverthecostoffacility maintenance.Thefeesmayormaynotbedisclosedatthetimeofhomepurchase, buttheyhaveasubstantialimpactonthecostoflivingasawhole.Therefore,you mustunderstandwhatyouareagreeingtointhelongtermbeforeyoufinishthe contract.
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Bothpurchasingapropertyandresidinginagatedcommunityareexpensive endeavours!Thecostofahomedoesnotincludeallexpenses.Additionalfacilities andamenitiescomewiththeneedtomaintainthem.Residentialsocietiesask tenantstopay‘maintenancecharges'forthisreason,whichcanrangefromRs1to Rs3persqftandadduptoasignificantmonthlysum.Mostofthetime,when consumersarepurchasingaunit,developersdonotdisclosethesefeestothem. However,delayingmaintenancepaymentsdramaticallyraisestheexpenseofliving. Therefore,itisessentialtounderstandallthesubtletiesofmaintenancefees,which areassessedeithermonthlyoryearly,ifyou'relookingforapropertyina residentialcommunity.
What exactly does maintenance entail?
Theupkeepofasocietyincludessomeoftheamenitiesprovidedtothecitizens.For theroutinemaintenanceofessentialservicesandinfrastructure,suchasparks, elevators,firesafety,parking,commonspaces,power,andwatersupply,among others,theResidents'WelfareAssociation(RWA)orthebuildermaychargeasmall fee.
Themaintenancecostisoftenchargedupfrontforthefirstyearaftertheprojectis deliveredbythedeveloper,whoalsotakescareofanysocietalduties.Whenthe RWAisestablished,thedevelopersturnovertherunningoftheorganisationtothe functioningbodysothattheycancollectfeesandcarryoutmaintenanceprocedures inaccordancewiththeirspecifications.
Maintenance guidelines
TheRealEstate(Regulation&Development)Actof2016(RERA)hasmadeit mandatoryfordeveloperstodiscloseallfees,apaymentplan,andanaccurate breakdownofallchargesinthebuilder-buyeragreementinordertopreventany misunderstandings.Additionally,RERAhasheldthedevelopersaccountableforany structuralproblemsrelatingtobuildingqualitywithinthefirstfiveyearsofthe projectdelivery&requiresthemtoprovidefreeofchargeremediesinsuch circumstances,protectingtheinterestsofthebuyers.Developersmaybesubjectto legalrepercussionsforfailingtoadheretotheRERAregulations.
Norms for calculating maintenance charges
Theidealmaintenancefeesareassessedpersquarefootforeachflatorunit.Each unit'soccupantssplitthecostsequallyforservicesincludingcleaning,rubbish collection,equipmentuse,repairsandmaintenanceofsharedfacilitieslikethelift. However,theutilitybills(forwaterandelectricity)arebasedonindividual consumption.
Interest-Free Maintenance Security (IFMS) – what is it?
Whenbookinganapartment,youcouldhaveseenthephraseInterest-Free MaintenanceSecurity(IFMS)inthepricebreakdown.ThedeveloperchargesIFMS inlieuofsustainingthesocietyupuntiltheformationoftheRWA.Iftherewasany moneyleftoveratthetimetheRWAwasformed,itwasgiventotheorganisationto
useformaintenancepurposes.TheIFMSassistsbuildersinresolvingproblemsthat ariseafteraprojectiscompletedorimprovessocietalamenitiesby,forexample, enlargingaparkoraddinganadditionallayerofprotection.
Incertainhigh-endcommunities,developersalsocollectasinkingfundthatissolely usedforunplannedexpensesandemergencies,whiletheIFMSissetasidetopayfor guards,contractors,modestrepairs,etc.onadailybasis.
GST's effects on maintenance charges
PriortotheimplementationoftheGoods&ServicesTax(GST),maintenancefees weresubjecttoa15percentservicetax,a0.5percentnon-agriculturaltax,anda0.5 percentSwachhBharatCess.However,undertheGSTsystem,residentialsocieties thatcollectatotalofmorethanRs20lakhinmaintenancefeesmustchargethe propertyownersan18%GST.GSTisnotappliedtomaintenancefeespermonth thatarelessthanRs7,500.
Residentialsocietymaintenancefeesaresubjecttothe18percentGSTrate. ResidentsinthesameStateastheproject,however,mustpayanI-GSTof9%.For instance,youwouldpay9%GSTonmaintenancefeesifyouwerearesidentof HaryanaandpurchasedapropertyinGurgaon.However,ifyouarearesidentof DelhiandacquireoroccupyrealestateinGurgaon,youwouldbesubjecttoan18% GSTcharge.Finally,onceyou'vedecidedonaproperty,it'scriticaltodouble-check themaintenancefeesandothercostsassociatedwiththepropertybecausetheywill invariablyhaveanimpactonyourbudget.
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