Monday, 29 July 2019

How to Calculate Maintenance Charge of flats in Maharashtra

Every new housing society after taking handover from builder ,new committee decided the maintenance charge or service charge to take from flat owner to run society.Due to lack of knowledge many society do wrong calculation ,they start taking lump sump amount ,which will be dangerous for society after 4-5 years when society need fund and due to this wrong calculation society do not have fund for future major repair work or any other emergency work.

So here we will share to you some idea after getting society ,form a good committee first try to take some educated and experience person in committee who has knowledge in bye-laws and can study bye-laws ,act rules & regulation of Maharashtra co-operative act.

Maintenance charges or service charges are levied by all members to cater for society common expenses incurred. As per the bye-laws of the Maharashtra Ownership of Flats Act , each housing society must follow a combination of per square feet and per flat basis charges for final calculation of the service charge for different heads.Maintenance charge can be divided into two part as given below :
1. Service Charge ( all common expenses)
2. Flat/Area wise charges ( Sinking Fund, Major Repair Fund etc)

1. Service charge heads which should be equally divided into all flats are as following :
  • Salary Watchman(Security)
  • Society Office Staff
  • Housekeeping Staff
  • Office Exp
  • Property Tax
  • Electricity Bill 
  • Water Bill
  • Repair & Maintenance
  • Lift Repairs & AMC
  • Insurance Charges
  • Printing & Stationery
  • Travelling & Conveyance
  • Auditor Expenses
  • Internal Auditor Fee
  • Education Fund
  • Federation Fees
  • AGM/SGM Exp
  • Legal Charges
  • Festival Exp
  • Any Other common exp 
2. Flat wise/Area wise heads which should be charge 
  • Major Repair Fund
  • Sinking Fund
  • Water Charges
  • Parking Charges (No. of Vehicles)
  • Non Occupancy Charges(10% of service charge)
Now here we are explaining in details about how to calculate following heads

Calculation of Major Repair Fund
The calculation for Major Repair Fund are formulated by the general body of each society but committee keep in mind bye laws. It is subjected to a minimum of 0.75% of the construction
cost of the apartment. For example, the construction cost is Rs. 1000/sq ft, the expense on repairs would come to Rs. 6375 per annul for a flat with a covered area of 850 sq ft.For monthly 6375/12 = 531 would be monthly Major Repair Fund.

Calculation of Sinking Fund/Corpus Find
Sinking fund calculation is same as Major Repair Fund only difference is % ,here we will take minimum 0.25% of the construction cost of the flat per annul.For example, the construction cost is Rs. 1000/sq ft, the Sinking Fund would come to Rs. 2125 per annul for a flat with a covered area of 850 sq ft.For monthly 2125/12 = 177 would be monthly Sinking Fund.

Calculation of Parking Charges
Parking charges are levied on a per flat basis and no. of vehicles basis and the final amount is decided by the general body of the society.

Water Charges
Water charges can decided on either the number of water inlets in each flats .Which would be fare for every members.If Flat size are equal so can fix common water charge for all flat owners.That should be decided by the general body of the society.

Calculation of  Non Occupancy Charges 
If flat is rented out , there will an additional charge which cannot exceed more than 10% of the levied maintenance charges/service charge. The charges known as non occupancy charges.

Interest on late payment/dues
As per bye-laws society can charge 18 to 21% annual on late payment and dues.

Popular methods of calculating Maintenance charges