Sahakarsutra Infoseries:
How to Calculate Maintenance Charge of flats in Maharashtra?
Maintenance charges or service charges are levied by all cooperative housing societies to cater for expenses incurred. The basis on which the society charges will be shared by each apartment unit is decided by the Cooperative Housing Society. As per the model bye-laws each housing society must follow a combination of per square feet and per flat basis for final calculation of the service charge for various heads.
Let us take a look at various heads that constitute the maintenance charge and how the maintenance Charge is calculated as per MOFA guidelines.
Common constituents of regular society charges
Service Charges or Maintenance Charges:Service charges also known as basic maintenance charges are those charges that the cooperative housing society needs incurs towards procurement of various services, and are levied on per flat basis. Any individual owing more than one flat in an apartment would need to pay service charges accordingly. The amount collected under service charges is used to pay salaries of the society’s office, technical and administrative staff. All administration expenses like phone, stationary, audit expenses and electricity bills for common area and other miscellaneous expenses are covered under the service charges.
Expenses on Building Repairs: Expenses on building repairs are usually charged on a per square feet basis to all members. The calculation for building repair charges are formulated by the general body of each society, but is subjected to a minimum of 0.75% of the construction cost of the apartment. For example, the construction cost is Rs. 1000 per square feet, the expense on repairs would come to Rs. 7500 per annum for a flat with a covered area of 1000 square feet. The charges exclude any expenses towards lift repair and maintenance.
Expenses on Lift Repairs: Lift repair expenses are charged per unit basis and used for lift repair and maintenance. The total expenses incurred for lift operations including repair and regular expenses like electricity charges. The total expenses are divided by the total number of flats and a final figure is reached which is uniformly charged to each member.
Sinking Fund or Corpus Find: Sinking fund, also known as corpus fund is the contribution by all flat owners for specific purpose like a fund for reconstruction of building in the future, carrying out such heavy repairs, structural additions or alterations to the building. The final amount is subjected to the decision of the society general body meeting, but as per MOFA guidelines the sinking fund is subject to a minimum of 0.25% of the construction cost of the flat per annum.
Parking Charges: Parking charges are levied on a per flat basis and the final amount is decided by the general body of the society.
Insurance Charges: Any expenses incurred on insurance of building and equipment used in the common areas can be shared with the members in accordance with the built up area of their respective apartments. The extra premium can be collected by the society from any shops or commercial establishments in the society.
Other Charges: Any other charges as decided by the general body of the cooperative housing society can be included in the society charges to be shared by each resident of the society.
Understanding Maintenance Charge Calculations
As per the Act, each housing society must follow a combination of per sq ft and per flat for various heads.
The Balance Sheet items are charged per sq feet basis while Service charges are charge per door basis.
Co-operative Housing Socities (CHS) are not allowed to levy maintenance charges based on the area of flat of members under MOFA. This was clearly mentioned in the judgment following a writ Petition of Venus CHS Ltd and another, when the cooperative housing society wanted to switch to area-wise monthly charges.
Dayanand Nene
Convener, Sahakarsutra
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