Maintenance Charges: Meaning, RERA Rules & GST on Maintenance Charges

Acquiring a property goes beyond simply paying the price of purchase. Once you occupy your newly acquired property, you will have to pay for maintenance charges that will ensure your building remains in good condition.

It is essential for all concerned parties whether buyers of property, owners of apartments or developers to be aware of building maintenance charges, rules under RERA regarding maintenance charges, and tax on maintenance charges.

What Are Maintenance Charges?

Maintenance charges are the charges levied repeatedly for maintenance and management of the common areas/services of any property.

The maintenance charges are usually levied monthly, quarterly, or annually by the builder, housing society, or Resident Welfare Association (RWA).

What Do Building Maintenance Charges Include?

Building maintenance costs typically include costs for maintenance of common facilities, such as:

• Security facilities

• Cleaning services

• Lift services

• Landscaping services

• Lighting facilities

• Water supply and pump services

• Fire safety facilities

• Generator facilities

• Maintenance of common areas

This list is not exhaustive as per the specific projects and policies of the respective societies.

What Is a Maintenance Fee?

A maintenance fee is the sum charged by the property owners in order to maintain the smooth functioning and maintenance of the common infrastructure and facilities of the building.

The maintenance fee is usually computed as follows:

• On per square feet basis of the apartment
• Uniformly for all apartments
• Based on the size/type of the apartment
• As per the maintenance structure approved by the society

RERA Rules for Maintenance Charges

According to RERA guidelines, the developer must disclose all the charges associated with maintenance before the sale of a property.

Important things to note:

• The maintenance charges must be transparent and disclosed in the Agreement for Sale.

• Arbitrary or hidden maintenance charges cannot be levied by the builder.

• Maintenance will be taken over by the housing society or association once it is formed, according to the law.

• All buyers must know about the maintenance charges, duration, and services included.

Always look into the builder agreement while considering maintenance charges.

GST on Maintenance Charges

In some situations, GST on maintenance charges can be applied based on the existing tax laws and the specified limits.

In general terms:

• GST will be applicable on maintenance charges charged by the housing societies or resident welfare associations if the conditions specified under GST law are satisfied.

• The rate of GST will be calculated based on the existing GST law.

Factors That Affect Maintenance Charges

The following are some of the elements that can influence maintenance fees:

• Apartment size

• Number of facilities

• Age of the building

• Location of the property

• Security needs

• Maintenance staff and facilities

Properties with superior facilities like swimming pools, clubhouses, gymnasiums, and greenery always have high maintenance fees.

Tips Before Paying Maintenance Charges

Prior to buying a property, one should check the following points:

• Maintenance fee per month

• Services provided under the fees

• Whether GST is applicable

• Period of maintenance fee collections

• Period of handover of property to housing society

• Points in the builder agreement

This would help you avoid any misunderstandings in the future.

How RERA Vision Helps

RERA Vision provides support to developers, housing societies and property buyers by offering:

• RERA compliance guidance

• Documentation review

• Regulatory advisory services

• Real Estate compliance services

• Legal services for projects

We make sure that the entire process remains transparent and compliant.

Building Maintenance Charges are crucial in owning the building and play an important role in keeping the quality, safety, and value of your building intact. Knowledge about building maintenance charges, RERA guidelines on building maintenance charges, and application of GST on building maintenance charges will be useful for the buyers in making informed decisions.

If you are looking for RERA Vision's expert help in any of these aspects of the real estate business, we have got you covered.

As GST rules keep changing, it is advised that the property owner or the housing society check out the current notification by the government on the same.