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.
Comments
  1. Mallikarjuna Addagalla

    If the ground floor of the apartment is let out for commercial purposes by the builder then how to calculate maintenance charges. The water supply,parking area is provided by the resident flat owners to the commercial establishment.If available please communicate the rules and regulations or byelaws regarding maintenance of aprtments. Thanking you.

  2. For maintenance charges of commercial establishments with in the residential complex, there are usually 2 methods that I am aware of –

    1. Charge the same amount as other flats with out any differentiation (usually based on sqft) – but collect a rent for the shop/establishment if the area is coming under the common area and using common facilities (like parking area, water etc.).

    2. Charge certain %age extra (like double or triple) of what other residents are paying. This should be arrived at the managing committee.

    It is important to differentiate especially when the commercial establishment is not just for the residents of the complex but is for public.

    Similar principles can be applied even when there are service apartments with in the same complex.

  3. Amit B

    ” Maintenance Fees based on apt SQ FT size” is applied “widely” mostly for one reason that every apt typically has only fewer large size apartment. Inevitably the association voting process became unfair;

    I would like to make iot clear that widely used should not be misunderstood as accepted but correct interpretation is that is achieved by misuse of number power and bullied to.

    If you would like to form a group across different apartment and start a movement in bangalore please email me at gigloo@yahoo.com.

  4. D.MUKHERJEE

    what is the justified way in calculating maintenance charges mostly imposed by the promoter.Kindly reply me in mail id.

  5. chandrakant

    hi
    Its ok that all other charges such property taxes water charges electricity charges its ok. but charges related to any function related to society that also has to charged in the Maintenance bill though we were not there in celebration is this comes according to society rules
    please give me advice

  6. S BOSE

    Please refer to:

    THE TAMIL NADU APARTMENT OWNERSHIP ACT, 1994
    (Act No. VII of 1995)

    CHAPTER – V
    COMMON PROFITS, COMMON EXPENSES AND OTHR MATTERS

    19. Common profits and expenses-
    (1) The common profits shall be distributed among, and the common expenses shall be charged to, the apartment owners according to the percentage of the undivided interest of the apartment owners in the common areas and facilities specified in the Deed of Apartment.
    (2) Every apartment owner shall, notwithstanding his waiver of the use or enjoyment of any of the common areas and facilities and the limited common areas and facilities or his abandonment of his apartment, be liable to be charged to the common expenses under sub-section (1).
    (3) Where the apartment owner is not in occupation of the apartment owned by him the common expenses payable by such apartment owner may be recovered from the person in the occupation of the apartment.

    From this clause of the Act, it is ample clear that, the Common Expenses are to be Charged only on the basis of the percentange of Undivided share of interest. In such case, whether it is fair on the part of few flat owners to still demand sharing the common expenses equally (fully or part thereof) ?. Kindly explain with respect to the applicabilty of the act.

  7. Pravinkumar Mohite

    Please let me know how should calculate maintenance charges to society which contains both row houses and apartments. Before society formed ,Builder has collected maintenance Rs.25000/year from row houses and Rd.15000/year from flats. Now Row houses raised issue that we dont use lift ,so we will not contribute toward lift maintenance.

    what is the justified way in calculating maintenance charges

  8. ApnaComplex

    Our view – It should not matter whether row houses use lifts or not – as in that case even ground floor residents will not use lifts. these are there for all residents to use. All expenses towards “services” like lift maintenance, security, common area lighting etc. must be shared by all flats/villas equally (irrespective of the square feet they own). Any additional expenses towards repair of existing assets (such as repainting of entire building, repairing a borewell etc.) must be borne by owners based on the sft they own.

  9. Ramesh Kumar

    I pay too much of maintanence as i own a three bed room flat. one bedroomers and 2 bedroomers enjoy less maintance charges as they calculate the charge based on the sq.feet.

    how to get rid of this ?

    Now they are repairing something and they are asking extra amount/square feet . how should i go about this ?.

    why should i pay more money to clean the drainage where all the one bedroomers and two bedroomers piss off the same water that i piss off.

  10. MLH

    Hi,

    Can this maintenance charge be different (more) for tenants? Can an association just arrive at a higher/double the cost for tenants if they wish to or is there a rule that governs these calculations?

    Thanks for the informative post.

  11. Prashant

    Hi,

    I own a shop, which has its own electric meter, Separate entrance and no water supply.

    The society has increased the maintenance of the flat to some amount and has also increased the shops maintenance to that amount. Earlier the maintenance of the shop was half the maintenance of the flats. Is this valid?

    Thanks
    Prashant Yadav,
    Thane

  12. DP

    Hi,
    I need some more clarification.

    Please let us know how it’s unfair in sq ft base?
    1- Lift : The large house have more family members.
    Their usage sharing is more.
    2- The garden :The large house have more family members.Their usage sharing is more.
    3- The club : It should be membership based.
    4- Security services :
    Large house off course usage more.

    Thanks

  13. ApnaComplex

    @DP, while large houses usage is theoretically more – there will always be scenarios where houses are not occupied, large houses have only two members, but small houses can have more family members (or more relatives) so on and so forth. Hence, a even accurate mechanism to calculate maintenance charges would be based on number of people staying in the flat.

    In addition, there is an angle of number of votes. As per bye-laws every flat will get one vote irrespective of the area they own. If all maintenance charges are based on sft, the larger flats should naturally get more weight in terms of votes and in terms of running the society – which obviously is not the case.

    Thus, one recommended way is to list the expense heads of the society and categorize which should be charged on per sft basis and which should be charged on fixed rate basis. Usually you should end up with 50% of expenses being sft based and other 50% being fixed.

    Most societies believe it is too much of overhead to do all these calculations and hence take fixed or per sft route.

    Even in the recommendation made, there would be no end to the number of dimensions using which we can categorize expenses as per sft expense or fixed rate expense. Any decision made would not be ideal for all owners. Every one has to agree to some amount of tradeoff in the spirit of a happier community living. Think of it as the convenience fee to pay for good neighbors 🙂

  14. hi,Ive occupied 2 flats of 1bhk and combined it as 1 residence. now the qn. is shall i give maintenance charge for 2 flats seperately or as 1 as my family consists only 4 members?

  15. Dilip

    Being a non-owner, can I attend an annual general meeting in housing society?

  16. S.S.R.

    With reference to the comment by “S BOSE · January 10, 2012 at 4:28 pm” in this thread.

    There are multiple judgements in the Chennai High Court (in 2009 and later) asserting the validity of THE TAMIL NADU APARTMENT OWNERSHIP ACT, 1994 with regards to the maintenance charges. Maintenance charges should be calculated only on the basis of UDS. It also clearly mentions what all are such charges. Moreover, it’s absolutely illegal to override this law by a bye-law in the society’s AGM/GBM. Courts are very strict in this matter and are very sympathetic towards the owners of smaller units and even grant damages for mental harassment, if any.

    I have read several skewed opinions here including the admin’s – and respect them as genuine opinions – however laws are framed keeping in mind all the aspects and the people involved and it needs to be respected in spirit.

  17. S.S.R.

    With reference to “Admin comment by ApnaComplex · November 20, 2012 at 1:21 pm”

    You are right when you said each unit has only one vote in any GBM/AGM regardless of size of the unit. If an individual owns 10 units then he has 10 votes. This is as per THE TAMIL NADU APARTMENT OWNERSHIP ACT, 1994 and the “model bye-laws”.

    However, this can’t be used as a justification for equal maintenance charges. The reason being that the same law clearly defines how the maintenance charges should be calculated. Each state have their own apartment ownership act with minor changes – clauses related to voting rights and maintenance charges would remain the same however. Hence, you must consult a local lawyer to understand the subject act in your state.

  18. Gopikrishna

    I am interested in knowing the popular method used to calculate maintenance for private garden or private terrace areas surrounding the penthouse.

    Is this charged at full or 1/3rd of the private area?

  19. Dr. DCK from Vidynagar

    By proper monitoring of the people strength, it is better to divide the apartment flat owners in to four categories: 1. Low Sq.Ft.& Less no.of people 2.Low Sq.Ft.& more no.of people 3.High Sq.Ft.& Less no.of people 4.High Sq.Ft.& more no.of people. So, collect the maintenance fee in 4 slabs in an appropriate order. (Or) Obtain the average Sq.Ft. of all Low Sq.Ft. and all High Sq.Ft. separately to get some ratio. All charges might be collected based on that particular ratio.

  20. pundalik kunjir nashik

    Sir, the advice given by you is really valuable & most helpful to resole issues. Thanks a lot.

  21. pundalik kunjir nashik

    Sir, the advice given by you is really valuable & most helpful to resole issues. Thanks a lot.

  22. Kindly mail me your clarification for following query.
    Our project is in Coimbatore . It is a gated community with reserved parking consisting of 2 Buildings (116 apartments) and 200 villas in the same compound with common infrastructure, garden, gym, sports courts, water softening plant and internal roads to reach villas and apartment two buildings. The houses apartments and villas are of different sizes in terms of built-up area.The builder has collected corpus of 50K from Villas and 75K from Apartments. Now for the regular maintenance he is demanding equal charges from all irrespective of area. The areas vary from 980 sft to almost 400 0 sft.for some villas. Some r 2 BHK some 3,4,5&6. How should we solve this problem as small apartments which r mainly 980 to 1200 sft.feel they are subsidising the villas. Suggestion to charge as per builtup area are not accepted by the villas. How do we simplify this process without causig fight among members. Please give your considered Opinion which ca be acceptable to all. Please e mail your reply. Thanks & regards

  23. Moorthy

    I am living in a complex comprising of 21 flats comprising of different super plinth areas. Apart from residential flats, there are two commercial flats used as a single unit.
    Apart from residential flats, one flat owner is having a private terrance with garden in first floor, the second one is having an open terrance owned by him and the third one is having a private garden in the ground floor.
    Against the 21 residential flats available, there are only 14 covered car parks owned by 14 of the flat total flat owners and the others park their vehicles in open area.
    This is from tamilnadu and Pl advise as to how to calculate the maintenance charges for (1) covered car parking area (2) open terrance (3) private terrace in the first floor and (4) private terrace in the ground floor

  24. Landcruiser

    With reference to reply from S S R:

    The tamilnadu apartment owners act 1994 says that the common expenses will be charged to apartments proportionate to their undivided interest which is alright. The text immediately follows it which you also mention as the act says what are such expenses that can be charged. I am not clear on that. The law reads like:

    Common expenses to be charged on property
    All sums assessed by the society or the Association of Apartment owners as the
    share of thee common expenses chargeable to any apartment shall, subject to the prior claim, if any,-
    (i) of the Government in respect of land revenue or any money recoverable as
    land revenue,
    (ii) of any municipality or other local authority in respect of tax or other
    assessment, and
    (iii) of the mortgage, in respect of all sums unpaid, constitute a charge on such apartment

    What does this part actually mean? In my flat there is Rs.1 Lakh monthly cost for sweeper/watchman/plumber and 20000 for lift AMC, Genset AMC etc. All these can be charged on sq.ft irrespective of same amount of usage by all flats?

  25. H Mahadevan

    Is it that house maintenance charges are to be collected as per the Square foot of the flats in Tamilnadu. Many societies in Chennai are including all amenities like Maintenance of Parking Area (Which is same for all flat owners irrespective of their flat area), swimming pool / Gym maintenance charges, water charges & even garbage collection / cleaning on square foot basis, which seems to be absurd as these are incurred more on user basis or equally for all. So can you please inform as to what are the legally required facilities required to be included in the Society charges to be charged by the Society on Square foot basis from the residents and what can be on user based charges.
    Would be thankful for your advise

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