A first time buyer of Property In India should have a working knowledge of what maintenance charges are. Buyers should understand that the asking price is not the only price that needs to be paid when they purchase a flat in a development, rather every society charges maintenance charges which have an impact upon the total cost of a property.
Why Maintenance Charges are Relevant?
Many first time homebuyers often overlook the fact that maintenance charges will need to be paid for any property they purchase. If overlooked buyers may find that the maintenance charges charged by a society will derail their financial plans. Calculating how much needs to be paid in maintenance charges is as important as calculating how much needs to be paid as EMI for a new house.
What Exactly Are Maintenance Charges?
Every society has commonly-owned property areas and the upkeep of these requires the payment of maintenance charges. Societies offer residents facilities such as a gym, tennis or basketball courts, a swimming pool, power backup, elevators, parking spaces, community centers, well maintained lawns, etc the upkeep of all of which requires residents to pay a certain monthly amount to the society.
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The buyer and builder together enter into a contractual agreement pertaining to maintenance charges and this is mentioned in the allotment letter by the builder. Unfortunately many builders fail to provide clarity of what the maintenance charges are likely to be at the time the project is launched, however it is always a good idea for buyers to try and get a rough estimate of this from builders.
Who Collects Maintenance Charges?
Usually maintenance charges are collected by the Residents Welfare Society (RWA), in the absence of which and when the project is completed and welfare association is formed, the builder bears the cost and passes it on to the RWA.
The Maintenance Charges Calculus
There are two ways that maintenance charges are calculated. The simplest method according to this real estate website is the flat rate. A flat maintenance charge for every unit in a society is usually charged when most of the flats in the development are of a similar size.
The second method to calculate maintenance charges per flat for a society depends upon the size of individual flats, this method is often used in societies where the size of the flats are different. For instance if the rate charged is 5 rupees per square foot area in a certain society, then owners of a 2,000 square foot flat would have to pay 10,000 rupees per square foot as maintenance charges.
When Maintenance Charges Change
Maintenance charges for a piece of realestate in India may increase if additional amenities are added to an existing society. This usually requires consent from the owners of flats in the society.
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