There are other ways through which a managing committee can earn some steady revenue, so that it can build new structures and improve the existing infrastructure without cutting a hole through the pockets of all residents.
Interestingly, an apartment association can mimic a government’s functioning and use penalties as a form of revenue, to ensure that its internal processes are carried out in an unaffected manner.
Why Use Penalties As A Source Of Revenue?
Using penalties as a source of revenue can aid an association in two ways.
- Creating Order: It will help in tightening up the existing system and making the residents more responsible and punctual when it comes to paying their dues. A system where no action is taken on defaulters will only invite more lethargy and bring in complacence. A managing committee can create a set process in this way, bringing in more control and transparency to its administration.
- Tapping Into A Revenue Source: It will act as a source of money, and in this way new structures that are essential for every housing society like Rain Water Harvesting structures (including pits, dug wells, hand pumps, trenches, and recharge wells) can be constructed straight from the apartment association’s funds without collecting money from the residents. As long as this system is made transparent, there will be no issues whatsoever. Members of the managing committee should maintain records for all penalties collected and how and where the money has been put to use.
Wondering how to easily keep track of the penalties and payments against them?
More often that not, the reason for not imposing penalties in a housing society is the administration hassle associated with imposing them and ensuring a collection of the same. Its a nightmare to keep track of these without help of proper tools.
ApnaComplex’s powerful accounting features come in handy here. Treasurers can easily post the penalty charges to a member’s account and the member clearly would be aware of the penalty charge s/he has to pay. Treasurers can easily track the payment against the penalty. Most importantly, this brings about a transparent way of dealing with situations leading to penalty. What’s more – ApnaComplex being a complete accounting solution – the penalties collected can be categorized under any number of different heads of your choice – such late payment penalties, or common area penalties etc. and all of them would get reflected in your balance sheet and income/expense statement that every member can clearly understand. Absolutely, more transparency.
Yet another instance where using ApnaComplex not only saves effort, but also improves orderliness and even generates revenue for your society. Sign up your society today and get the benefits.
Where Can Penalties Be Charged?
Every housing society has its own set of bye laws, and these bye laws will provide information about the many penalties that can be levied on defaulters. The members of the managing committee can charge some penalties for the following acts:
- Violation of Bye-Laws – Most association bye-laws has rules on how balconies must be kept clutter free not spoiling the facade of the apartment complex, how to manage garbage, how to maintain sound levels etc. Still, there could be Residents/Owners who violate terms by having messy balconies, cause inconvenience to neighbors with loud music or wood work during nights etc. and association can consider imposing penalty charges for the same.
- Damage To Common Areas – The managing committee in a housing society can fine people for damaging important structures in the apartment’s common areas. A person who causes any form of damage to elevators, benches, roads, staircases, or swimming pools in the housing society can be fined. Penalties can also be charged for damages caused to gym equipments or library assets.
- Raising Pets – Though, not exactly a penalty, this is one major source of revenue that an association can tap into. Not all housing societies have bye laws that allow people to raise pets; so members of the managing committee can charge people who have pets in their household (if pets aren’t allowed). A pet deposit can be taken or pet rent can also be levied every month to create a steady source of revenue.
- Late Payment Of Dues – This is the most obvious and frequently used – Residents in the housing society who don’t pay their maintenance charges within the stipulated time can be penalized, and for this, a deadline should first be set and made public. This will help in making the collection process more effective.
But remember, before imposing any penalties, all the associated rules and the penalty amounts must be proposed, discussed, and voted in an AGM. Association cannot impose penalties with out first getting them approved in an AGM and recording those minutes.