Archives July 2010

Popular methods of calculating Maintenance Charges in Apartment Complexes

As a resident of an apartment complex, you are required to pay a monthly charge for the upkeep and maintenance of your society.  This maintenance charge is usually arrived at taking into account the monthly expenses plus an additional amount that the society can save for major repairs or maintenance that will arise at a later date. Every housing society decides on a method that it believes is a fair and reasonable way of calculating the amount for each member.  While this may sound like a simple agenda, at times, it’s not so simple to carry out due to the different ways in which the amount can be calculated. Here, we present some of the popular ways in which societies calculate maintenance charges along with their respective pros and cons:

Pay per Square Feet:

This is the most common and popular way of calculating maintenance fee. In this type of calculation, a fixed rate is charged per super built up area of the apartment that you own. For example, if the fixed rate is Rs. 2 and you own a 1000 sq. ft. apartment, your maintenance charge will be Rs. 2,000 per month. In this type of arrangement, the bigger the area of the house, the higher you pay as maintenance charge. So in apartment complexes with apartments of varying sizes, you’ll have people paying different amounts per month as maintenance charge.

Pros: It is easier to calculate. This method is one of the most commonly used methods in apartment complexes.
Cons:
While this method is popular, it is unfair on people owning larger houses as some of the facilities that they use like a lift, the garden, the club, security services etc. are equally shared among all members irrespective of the size of the flat.

Combined Maintenance Charges:

In this method, the maintenance amount is divided into two parts. Part 1 includes all expenses that are equally utilized by members, irrespective of the size of their apartments. This includes the cost of maintaining lifts, salaries for security and other staff, costs for stationery, property taxes of society office, conveyance, meeting charges, audit fees, legal charges, common electricity charges, etc. The other part is calculated on the basis of the area of the flat and includes items like property taxes, water charges, etc. This is also the method advocated by the Maharashtra Cooperative Societies Model Bye-Laws.

Of this amount collected, everything is an immediate outgo for the society except for the amount collected as sinking fund. This amount is used when the society needs funds to carry out major repairs or maintenance. So instead of collecting the amount from the members at one time, the society can dip into the sinking fund that has grown over the years. The bye-laws recommend collecting at least 0.25% per annum of the cost of construction of each apartment (excluding the cost of the land) as sinking fund corpus. The AGM can vote to collect a higher amount than this if required. The amount is calculated on size of the apartment. This amount remains with the society until any major repairs has to be undertaken. In case the owner sells the apartment, this money is not returned to him/her.                                       

Pros: Aims to be fair on all parties involved. The members owning a bigger apartment is not penalized based on the size of the apartment. All other expenses which are related to the size of the apartment are charged as per dimensions of the apartment.
Cons: There can be lot of differences of opinion on the items that should be charged as per size of the apartment.

Equal Maintenance Fee:

This method is favoured in apartment complexes where the size of each apartment is the same. Here, the fixed amount is arrived at after calculating the monthly expenses plus the amount to be kept aside in the sinking fund and dividing the total by the number of apartments in the society. As costs increase, this amount gets revised in the Annual General Meeting. For complexes where apartments are of different sizes, this method will be unfair and is usually not accepted by the members.

 Pros: Easy to implement in societies with same-sized apartments.
Cons: Unfair to smaller apartment owners in societies with different-sized apartments. The greater the difference in size of the apartments, the higher will be the discrepancies in the maintenance charges between the members.

In all methods, it is recommended that the maintenance amount calculation be revisited at least once in six months based on the actual expenses incurred in the past 6 months and the contingency amount that the association would like to maintain for any exigencies.

While these are some popular ways of calculating the maintenance charge, a residential society can arrive at any system that is considered fair and acceptable to all members of the society. If there is any doubt, you can refer to the model bye-laws and decide on the best way to calculate the maintenance charge in your Annual General Body Meeting.

Update: You can also refer to this article – How to Calculate Maintenance Charges for your Apartment Association?


This article aims at collating and providing information on maintenance charge calculations for residential complexes for benefit of ApnaComplex customers and readers. While ApnaComplex has taken every care to ensure the information is accurate, we suggest to please use the information in the article and the template provided only as a guidance for further discussion and action with help of relevant professionals. If you need professional advise on this topic and any other property related matters, please send your request through our contact us form. You may post your questions/inputs in the Comments section below and we will try and get them answered through relevant subject matter experts.

No more power failures in your residential complex!

Unless you live in one of the super-exclusive localities in India, power failures will be an all too familiar concept. As you go further into the interiors, frequent power cuts become the norm instead of the exception. And the way the power situation appears, India will be experiencing a major shortage of power in the coming years irrespective of the efforts of the government. Sure, we have diesel generators for back-ups. But with the increasing cost of fuel and the environmental impact of fossil fuels, it’s not the wisest choice either.

So what’s the solution? For a country like India, which enjoys an average of 300 sunny days, the answer is blowing in the air: yes, Solar Energy. Environmental-friendly, renewable, and being completely free, solar energy should be the obvious future for India. It should be the ideal solution for residential complexes like yours to reduce power cuts as well as your electricity bills.  All it needs is the will and the foresight to make an investment that will pay dividends in the years to come.

Use of Solar Power in Residential Societies

A wonderful example of a residential complex going solar right from inception is Rabi Rashmi Abasan (http://www.bengaldcl.com/Rabi_rashmi.htm) society in Kolkata. This complex consists of bungalows with each bungalow being fitted with solar photovoltaic panels on their rooftops. In turn, each bungalow is fitted with a solar heater that is connected to the kitchen and bathrooms. These solar panels generate around 60 units of electricity every day – which is about two units for every home. The complex still uses power from the main electricity grid, but the dependency and thus the bills, are much lower. Any surplus energy that the society generates gets pushed back into the state power utilities. The difference between what the society uses from the power grid and what it pushes back is monitored and the society pays the balance to the electricity board. This project was envisioned by the West Bengal government, to showcase how solar power can drastically reduce traditional power consumption in modern homes.

Cities Encouraging Solar Power

Rabi Rashmi is an example of just one project. There’s an example of a city that has adopted solar energy as the way to power its future. No, it’s difficult to guess the city as it’s not one of the metros or even one of the other larger cities. The city we are talking about is Thane in Maharashtra.

Their effort started a few years back when they introduced solar panels at the Rajiv Gandhi Medical College. The introduction of solar heating reduced their electricity bills by a whopping Rs. 9 lakh per annum as it heated around 19,000 litres on a daily basis. Buoyed by the success of this exercise, the Thane Municipal Corporation offered a 10% cut in property tax for those residential complexes that adopt this facility. It was noticed that societies that adopted solar heating were able to recover their costs as early as three years.  So successful was the experiment that the corporation has now made it mandatory for all upcoming complexes to have solar water heaters as part of their facilities.

Cities like Bangalore and Pune are other examples where the government is taking proactive steps to encourage the use of solar energy. Bangalore has the largest deployment of rooftop solar water heaters in the country, generating a daily equivalent of 200 MW, with 60% of the city’s household and industrial units using solar water heaters. It also offers an incentive of Rs. 50 on monthly electricity bills for residents using roof-top thermal systems. This is now being mandatory for all new structures. Pune is the other city, which, like Thane and Bangalore, has made installation of solar water heaters in new buildings mandatory. At present, it is estimated that 20 per cent of houses in Pune are using solar water heating units.

Power Solar Equipments for Residential Use

Residential solar panels are available in various shapes, sizes and categories. You should select the panels depending on your requirement and your investment ability. For a typical household that uses four Compact Fluorescent (CFL) bulbs of nine watts, a fan and a television set for six hours every day, the solar panel would cost around Rs 25,000. To run all the fans, lights and other gadgets, the cost would be anywhere between Rs 30,000 and 60,000. And if you plan to install a 100-litre water heater, the cost will be around Rs. 15,000 to Rs. 20,000.

Residential complexes could start with using the energy generated to power the common facilities in: the lawns, the passages, the fans, lights and computer in the society office, the security cabin, club house, etc. You could then move to installing solar heaters for all residents of your complex. Studies show that as much as 25% of a household’s electric consumption is for heating water! Imagine if that cost can be totally eliminated for life! You can also consider replacing your diesel-guzzling back-up generators with environment-friendly solar power. With fuel prices on the rise, this is one investment that can show healthy savings in the immediate future.

Once installed, maintaining solar panels is pretty easy. They are flexible enough to be moved from one place to another. If you can keep it away from dirt and pollution, you won’t need to service it regularly either. All you need to maintain it properly is clean and wipe it regularly so that the efficiency of the panel is always at a high.

Government Incentives

IREDA (Indian Renewable Energy Development Agency) provides soft loans at 2% to domestic users, 3% to institutional users not using accelerated depreciation and 5% to industrial/commercial users availing depreciation. The government also provides an interest subsidy, besides a 5% rebate on property tax. You can check details of all incentives offered by the Ministry of New and Renewable Energy (MNRE) under the recently launched Jawaharlal Nehru National Solar Mission here. The Delhi government provides a rebate of Rs. 6,000 for every solar water heater you install.

The onus is now on us. Are we up to it? Residential complexes can take the initiative and use solar power to reduce their power consumption, avoid power cuts and cut down on electricity bills. Although the initial investment may seem high, once adopted the future benefits of solar energy to the residential complex as well as to society at large is simply immense.


This article aims at collating and providing information on using solar energy for residential complexes for benefit of ApnaComplex customers and blog readers. While ApnaComplex has taken every care to ensure the information is accurate, we suggest to please use the information in the article only as a guidance for further discussion and action with help of relevant professionals. If you need professional advise on this topic or any other property related matters, please send your request through our contact us form. You may post your questions/inputs in the Comments section below and we will try and get them answered through relevant subject matter experts.