How technology ended the door to door maintenance collection saga?

Door-to-door maintenance collection

Door-to-door maintenance collection

The vicious cycle of maintenance calculation, payment dues, reminders and door-to-door maintenance collections kept most of the apartment management associations on their toes a few years back.

Keeping a track of the defaulters, reminding the defaulters to pay the maintenance and then finally collecting the same made the already difficult job of managing an apartment even tougher for the apartment associations. Also, since there was no way of ensuring whether a resident has read a maintenance fee reminder notice posted on the apartment notice board, the only way out for the RWA (Resident Welfare Association) was to reach out to residents and collect maintenance on a door-to-door basis. This was a highly painful and a time consuming process. In addition, one had to depend excessively on manpower for this activity, which increased the costs as well.

Thanks to technology, long gone are the days when apartment management associations were reaching out to residents on a one-to-one basis to collect maintenance. Management associations now use sophisticated apartment management software to simplify their maintenance collection process to an extent of a single mouse click!

One of the misconceptions that most of the apartment management associations had was about apartment management software being very costly. This misconception was cleared, when a lot of apartments started using ApnaComplex, a cost-effective subscription-based leading apartment management software with zero hardware costs and an ongoing support. The cost of the software is directly proportional to the number of units an apartment has, making it more economical than ever for the apartment management associations.

How apartment management software helps the management associations in timely collections?

Timely reminder for payments – The apartment management software instead of sending reminders to each and every resident one by one, empowers the management association to now send automatic reminders to all residents at one go via email/SMS. Residents don’t mean to default on maintenance payments, it’s their hectic schedules and absence of a mechanism to remind them in a timely manner that makes them miss out on submitting the maintenance charges on time. A reminder system reduces the default rate up to a great extent.

Ease of paying maintenance charges – The software comes with a payment gateway that empowers the residents to make their payments online and directly crediting the amount to society’s bank account. The payment can be made via credit/debit card or net banking as per resident’s convenience. This eases the residents from the whole ordeal of coming to the society office just to drop a cheque or pay in cash and in the same time saves the management association from the entire reconciliation effort.

Reduces manpower costs– The software automates the entire process of collections and reduces the requirement of any manpower for collections. The notices/reminders are sent in a timely and periodic manner to the residents and there is absolutely no requirement for a person to conduct door-to-door collections or inform residents about payment defaults.

Filter the list of defaulters – The apartment management software enables the management association to filter the list of defaulters. The entire process gets automated and a list of residents whose maintenance payments are due can be easily drawn out along with the penalty to be charged from them. This helps the management association to identify the exact number of defaulters to be contacted. Emails/SMS to be sent out to defaulters is also automated through this software reducing the manual work up to a great extent.

Meets expectations of both apartment management association and residents – A lot of times a warning message posted on the apartment notice board about maintenance default provokes residents to get into a verbal spat with the management associations. A timely reminder via SMS/email can cause lesser disputes, higher collections for management associations and lesser defaults on behalf of residents ensuring their harmonious living in the apartment.

Sun City Apartment Owners Association (SAOA) managing an apartment of 1200+ apartment units revealed that using ApnaComplex, a cost-effective subscription based apartment management software has led to a quicker collection cycle and much lesser defaulters in their apartment. It has enabled online payments with about 55% payments now happening online reducing the manual effort of reconciliation up to a great extent. The association now has a much clearer view on individual resident account and collection of long pending dues has been possible only because of ApnaComplex.

Maintaining a full-time staff or volunteers who lack expertise/time while dealing with maintenance collections or collecting default payments can become a very expensive as well as tiresome process. Use apartment management software to relieve your association from the painful process of door-to door maintenance collections today!

Log onto www.apnacomplex.com for more information


How to calculate Maintenance Charges for your Apartment Association? OR How to share Common Expenses in a Housing Society?

A seemingly simple but complex issue in every apartment association is on how to arrive at the maintenance charges to be levied on the members. The issue is complex enough that it is impossible to please all the members with a single way of calculating the maintenance charges.

As discussed in the “Popular methods of calculating Maintenance charges” – societies have option of charging Per Square Feet (PSF) or Per Flat (PF) basis. While the regulations in most states is not very clear (or not enforced with necessary rigor), the model bye-laws of Maharashtra state provide a relatively clear answer to this debate. The answer at a high level is simple – follow a combination of per sft and per flat for various heads.

The same can be adopted by societies of all states (as most model bye-laws are derived works of the model bye-laws from Maharashtra State).

Types of Charges

There are quite a few types of charges that can be levied on members. The periodicity of levying these charges can be decided by the General Body of the Association. Usually charges like ‘Sinking Fund’ will be levied once in an year – and Maintenance Dues will be charged once in a month. Brief explanation of various charges is given below.

Service Charges (a.k.a Maintenance Charges in most societies)

This charge needs to be levied on per flat basis. This charge needs to be levied based on the expenses incurred by the society towards procurement of services. This includes all Staff Salaries (including society office staff, maintenance staff, security staff, housekeeping staff, technical staff etc.), Administration Expenses (internet, telephone, printing, stationary etc.), Auditor Expenses, Common Area Electricity Bill (excluding bill for Lift operations), Conveyance / Travel Expenses, Legal Expenses, Membership to local federations / bodies etc.

Expenses on repairs and maintenance of building of Society

These charges may be decided by General Body subject to minimum 0.75 percent (0.75%) of the cost of construction of flat/shop per annum. For example, if the construction cost is Rs. 1200/- per sft, this charge will be Rs. 9,000/- per annum for a 1000 sft flat. This is calculated on per sft basis and can be levied once in a year. This excludes Lift related repair & maintenance.

Expenses for lift repair, maintenance and for running the lift

This charge should be based on expenses incurred for Lift Repair, Lift Maintenance and Running of Lift, including Electricity Charges for Lift oeprations. This needs to be charged equally on all Members of the building where in lift is provided.

Sinking Fund (a.k.a Corpus Fund)

The exact amount may be decided by General Body subject to minimum of 0.25% of the cost of construction of flat per annum. This is calculated on per sft basis and can be levied once in a year. This is to be collected if the builder has not collected this amount at the time of selling the flats and handed over the corpus to the association.

Parking Charges

This charge is to be levied based on number of parking lots in a flat. The fee per parking lot may be as decided by General Body of the Society.

Property Tax

This is applicable only in states where societies are authorized to collect property tax on behalf of Govt. The tax to be collected is determined by the state.

Water charges

This charge is to be levied based on number of water inlets into a flat. The fee per water inlet may be as decided by General Body of the Society. In modern apartments / layouts, this charge can be calculated based on the reading from the water meters that measure consumption of the water by a flat.

Interest on defaulted Charges

This is the late payment penalty. The penalty scheme / amount is as decided by General Body. Most common practice is to levy simple interest not exceeding 21% p.a. But General body can decide a different way of calculating late payment fees that works best for them.

Non Occupancy Charges (NOC)

This is an additional charge on flats that are rented out. As per the law, this charge cannot exceed 10% of the Maintenance / Service Charges levied. You can refer to this article to get more details. The NOC cannot be charged if the licensee(tenant) is family member(Family Members includes husband, wife, father, mother, brother, sister, son, daughter, son in law, daughter in law, sister in law, brother in law, grandson and granddaughter).

Insurance Charges

The expenses spent on insurance of the building and equipment can be levied on the members in proportion to built up area of their flats. Extra premium charged by insurance on account of storage of specified goods in flat/shop should be collected from those flats/ shops whose storage of specific goods was the reason for extra premium.

Lease Rent

This is levied based on per sft for the builtup area of the flat/shop.

Any other charges

As decided by General Body from time to time.

Following is a table indicating a comprehensive list of charges that can be levied by the Society / Apartment Association on the members. All charges levied must be derived from the expenses of the society. The table also indicates the correct way of arriving at these charges from the expenses and if they need to levied on per sft basis or per flat basis – as recommended by Model Bye Laws.

How to Calculate Maintenance Charges?

Conclusion

The article provides a framework for arriving at dues to be levied that is fair to all its members. A Housing Society that is ‘well managed’ needs to avoid taking the easy way out – by charging per flat or per sft basis. This is especially true for societies where there is no uniformity in size of the flats. Though at a first glance, it looks like there is much work and many heads for the amounts to be charged to adopt this, it is not really so. Once you get started you realize that its not as difficult as it appears. If you are new society, you can put this in practice right from day one. if you are an old society, but not following this model – its never too late for you to adopt this.


Get your Society on ApnaComplex.com – Today!
ApnaComplex is India’s most comprehensive web based housing society accounting, management and communication software. It is designed to make the life of residents and owners a lot better by bringing in more transparency and accountability in managing a housing society. Check out the features of ApnaComplex and sign up your society today to get the benefits! We offer a free 30-day trial as well so that you can try before you buy!


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.


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.