How to Calculate Maintenance Charge of flats in Maharashtra?
Maintenance charges or service charges are levied by all cooperative housing societies to cater for expenses incurred. The basis on which the society charges will be shared by each apartment unit is decided by the Cooperative Housing Society. As per the model bye-laws of the Maharashtra Ownership of Flats Act (MOFA), each housing society must follow a combination of per square feet and per flat basis for final calculation of the service charge for various heads.
Let us take a look at various heads that constitute the maintenance charge and how the maintenance Charge is calculated as per MOFA guidelines.
Common constituents of regular society charges
Service Charges or Maintenance Charges:Service charges also known as basic maintenance charges are those charges that the cooperative housing society needs incurs towards procurement of various services, and are levied on per flat basis. Any individual owing more than one flat in an apartment would need to pay service charges accordingly. The amount collected under service charges is used to pay salaries of the society’s office, technical and administrative staff. All administration expenses like phone, stationary, audit expenses and electricity bills for common area and other miscellaneous expenses are covered under the service charges.
Expenses on Building Repairs: Expenses on building repairs are usually charged on a per square feet basis to all members. The calculation for building repair charges are formulated by the general body of each society, but is subjected to a minimum of 0.75% of the construction cost of the apartment. For example, the construction cost is Rs. 1000 per square feet, the expense on repairs would come to Rs. 7500 per annum for a flat with a covered area of 1000 square feet. The charges exclude any expenses towards lift repair and maintenance.
Expenses on Lift Repairs: Lift repair expenses are charged per unit basis and used for lift repair and maintenance. The total expenses incurred for lift operations including repair and regular expenses like electricity charges. The total expenses are divided by the total number of flats and a final figure is reached which is uniformly charged to each member.
Sinking Fund or Corpus Find: Sinking fund, also known as corpus fund is the contribution by all flat owners for specific purpose like a fund for reconstruction of building in the future, carrying out such heavy repairs, structural additions or alterations to the building. The final amount is subjected to the decision of the society general body meeting, but as per MOFA guidelines the sinking fund is subject to a minimum of 0.25% of the construction cost of the flat per annum.
Parking Charges: Parking charges are levied on a per flat basis and the final amount is decided by the general body of the society.
Water Charges: Water charges are levied depending on either the number of water inlets in each apartment or depending on the reading of water meter installed for each dedicated apartment unit. The water meters measure the consumption of water of each flat separately. The fee is decided by the general body of the society.
Property Tax: In case the cooperative housing society is authorized to collect property tax on behalf of the government, the tax is determined on a per square feet basis or as specified by the concerned state government.
Insurance Charges: Any expenses incurred on insurance of building and equipment used in the common areas can be shared with the members in accordance with the built up area of their respective apartments. The extra premium can be collected by the society from any shops or commercial establishments in the society.
Other Charges: Any other charges as decided by the general body of the cooperative housing society can be included in the society charges to be shared by each resident of the society.
Can CHS charge for vacant flats?
As per the bye laws of the MOFA, the society charges levied on any individual is conditional to him or her being a member of the cooperative housing society and has nothing to do with the time of stay in the premises. Hence the cooperative housing society is well within its right to charge the regular society charges in case of a vacant lying flat.
Sinking fund, repair fund and service charges all come under regular society charges that are charged to all society members irrespective of their actual stay in the premises. In case the flat is rented out to a third party, there is an additional charge which cannot exceed more than 10% of the levied maintenance charges. The charges known as non occupancy charges or NOC cannot be levied, if the tenant is a family member of the owner.
Popular methods of calculating Maintenance charges
There are two common ways in which each housing society can decide the service charges for each member. The society is free to choose the design that suits their respective needs. The two popular methods used to calculate maintenance charges are:
Flat Wise: Flat wise service charge module calculates sum or total maintenance charge to be incurred by the society and divides equally among all flat owners irrespective of the size of the flat. This method brings a sense of fairness to each flat owner and society resident. This method is best adopted in housing societies where each flat is of the same size.
Area Wise: Under the Area Wise maintenance charge method, the total costs incurred by the society are charged according to the area in terms of per square feet owned by each member. The common areas are divided equally using a fixed rate while flats are calculated depending on the size of the apartment. For example, If acrate is Rs. 2/sqt then for 1000 sqft flats it is Rs 2000/per month and for 1500 sqft flat it is Rs 3000/per month.
Understanding Maintenance Charge Calculations
Housing societies have the option of charging their maintenance charges in either per square feet or per flat basis. Regulations in most states are not clear, but the model bye-laws of MOFA provide a simple solution. As per the Act, each housing society must follow a combination of per sq ft and per flat for various heads. There are however some exceptions as Co-operative Housing Socities (CHS) are not allowed to levy maintenance charges based on the area of flat of members under MOFA. This was clearly mentioned in the judgment following a writ Petition of Venus CHS Ltd and another, when the cooperative housing society wanted to switched from flat-wise monthly charges to area-wise monthly charges.
