Penalties In A Housing Society – Effectively Creating A Revenue Stream

The managing committee in every housing society is responsible for maintaining and managing the infrastructure. There is a steady stream of revenue that the management committee gets every month, as and when all residents in the apartment complex pay their maintenance dues.
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.

Use penalties as alternate revenue channel

Penalties Can Help In Establishing Order


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.


Accounting Features of ApnaComplex – Overview

ApnaComplex offers comprehensive accounting features that helps residential apartment and commercial complexes manage their financial matters Easily, Efficiently, and Effectively

Behind the deceptively simple user interface of ApnaComplex, a full-fledged double-entry accounting system is present, hiding all the jargon and complexities involved in maintaining accounts for residential apartment and commercial complexes.

This article provides a very high level overview of the accounting modules offered by ApnaComplex. We intend to expand on each module in greater depth in future posts.

The accounting features of ApnaComplex can broadly be classified into following five modules.

  1. Member Income: Administrators / Association Treasurers can generate invoices for each flat/unit for charges such as maintenance dues, late payment penalties, club house usage, corpus fund etc.  Members can record their payments against the invoices. Administrators can approve / reject the payments and issue instant receipts for approved payments. Administrators / Treasurers can even club multiple charges to generate single invoice. Email/SMS notifications sent to relevant members when a new invoice is raised or payment is made.
  2. Non-Member Income: Administrators / Association Treasurers can record additional income that a complex receives – such as rentals for stalls/cell towers/hoardings/banners, bank interest charges etc.
  3. Expense Tracker: Administrators / Association Treasurers can record all expenses that are made by the association/complex owners under different heads such as maintenance expenses, legal, taxes, admin etc. Capture details such as expense date, how the expense was paid, to whom was the payment made, if invoice/receipt was available for the payment etc along with the expense amount.  Administrators can generate expense statements for various heads and analyze the trends, publish the statement to noticeboard.
  4. Cash & Bank Accounts: This is a module that administrators / treasurers will love. Administrators / Association Treasurers can set up Petty Cash and Bank Accounts in ApnaComplex. Once set up, all member income, non-member income, expenses that are recorded in other modules mentioned above are automatically integrated with the cash & bank accounts. This helps administrators see  the cash and bank balances up-to date in real time. The financial status is literally at your finger tips. Administrators can reconcile the bank account statements in ApnaComplex with their real world bank account and easily identify transactions that are out of sync.
  5. Financial Reports: This module provides several financial reports such as “My Statement” for members (apartment owners / tenants) to see a consolidated financial statement for all the flats/units they own, defaulters reports, list of charges, payments, income/expense report, petty cash & bank account statements. You can do slicing and dicing of data to get more inference. All statements can be downloaded into excel at anytime by the administrator for offline storage or analysis or to send to your auditor.

 With all these features, we sure guess that the accounting and auditing requirements of any apartment or commerical complex are met to the tune of 90-95% . 

Now, the icing on the cake of such rich feature set – you need NOT pay a premium to use accounting capabilities of ApnaComplex. Contact us for pricing with your complex details and we will get back to you with a quotation at the earliest. Meanwhile, go ahead and register your complex and enjoy a no-obligation 30-day free trial.