Maintenance Concerns in Indian Housing Societies: Understanding Legal Methods for Calculating Fees and Challenging Area-Based Charges
If you are an Indian flat owner or an NRI facing disputes over maintenance fees charged based on your flat’s size the area based charges you are right to question it. While common, this method often feels deeply unfair, sparking widespread Maintenance Concerns among members who receive equal access to facilities.
Under Indian law, particularly the state-specific Co operative Societies Acts and RERA, one document governs the charging method: the registered Society Bye Laws. You have the right to challenge the current method if it violates these bye laws or lacks transparent approval. This guide helps you understand the law and take clear steps to ensure fair building upkeep and transparent financial management.
Society Maintenance Fees Explained: Legal Methods and Key Maintenance Concerns
The law in India does not enforce a single method; instead, it offers a framework for fairness, which your society formalises through its Society Bye Laws. The managing committee must follow one of these three primary methods, which must be approved by the General Body:
1.Maintenance Concerns: Area Based Charge (Per Square Foot/Meter)
This method charges per square foot of a flat’s area, mainly for funds like sinking and structural repairs. Courts, including a 2025 Bombay High Court ruling, upheld it as a fair way to address Maintenance Concerns for larger flats.
2. The Equal Maintenance Fee (Flat Rate)
This is the preferred method for many members, dividing the total cost of certain services equally among all units. The Legal Rationale here is that it applies to all costs where the benefit received is the same regardless of flat size. This is the major component known as Service Charges.
Key Components Where Equality is Mandated (in many states): The cost for salaries of staff (security service issues, watchmen, sweepmen, liftmen), common electricity charges, water charges (where not metered per flat), Common Area Cleaning Problems and common area maintenance, Lift Maintenance and running costs, and administrative expenses (AGM Compliance costs) should all be collected equally. A January 2025 Mumbai court ruling reinforced this by restricting per square foot billing for common services where the bye laws support equal charges.
3. The Hybrid Model
This is the most balanced and legally sound approach, combining fairness with proportionality. It splits the bill heads: fixed costs (like security salaries) are divided equally, and variable costs (like the Sinking Fund or building insurance) are split based on area. Societies may adopt this model through a special resolution passed in the General Body Meeting, provided it aligns with their state’s Society Law framework.
Can You Legally Challenge the Area-Based Charge?
Yes, you can legally challenge your society’s practice of levying area based charges, especially if they apply to non proportional items like salaries or common area cleaning problems.
The entire legal challenge rests on one question: Does your society’s Bye Law specify the calculation method for the disputed head of charge?
- If the Bye Laws mandate ‘Equal Sharing’ for a charge (e.g., Service Charges), but the society charges you ‘Area Based’, the charge is Illegal. This is your strongest ground for a challenge.
- If the Bye Laws explicitly allow ‘Area Based’ for that charge (e.g., Sinking Fund), the charge is Legal. Your challenge will fail unless you can prove gross misuse or a lack of due process.
Common Legal Grounds to Overturn Area Based Charges
- Contravention of Society Bye Laws: This is the strongest ground. Point directly to the relevant clause (for example, Bye Law 65 or 70 in Maharashtra) that requires equal division for that cost component.
- Lack of General Body Approval: Members must approve any change in the calculation method in an AGM or Special General Meeting (SGM). If the committee alters it without approval, the charge becomes invalid.
- Violation of Transparency (RERA Advisory): Demand a clear, itemised bill that shows how each component (such as lift maintenance or security) is calculated. If the society refuses, challenge the non-disclosure by citing RERA Advisory (Section 4(d)).
- Unjust Enrichment or Profiteering: Maintenance charges are solely for building upkeep issues, not for making a profit. If charges are exorbitant and the society shows excessive reserves, you can argue the charge is unreasonable and arbitrary.
Step-by-Step Guide: Actionable Steps to Address Your Housing Dispute
Do not stop paying your undisputed charges, as non payment of society dues can lead to severe penalties. Instead, follow this structured legal pathway:
- Document Review: Start by obtaining the current, registered Society Bye Laws and the Minutes of the last AGM that approved the current maintenance budget. Focus: Identify the exact clause contravened by the area based charge.
- Internal Challenge: Send a formal, written complaint to the Managing Committee demanding a reversion to the bye law compliant method. Use registered post or email and give a 15-day notice period. Focus: Internal Resolution, highlighting Facility Management Problems and non-compliance with Society Law.
- Propose Resolution: If the committee refuses, request that the issue be included as a resolution in the next AGM to amend the rule or revert to the equal sharing method.
- File with the Registrar: If the society refuses, file a dispute application with the Deputy Registrar of Co operative Societies in your jurisdiction (under the state Co operative Societies Act). Focus: Housing Dispute resolution under the governing Society Registration authority. The Registrar can issue a binding order.
- Consumer Forum Recourse: You can also file a complaint with the District Consumer Dispute Redressal Commission, arguing that the arbitrary or illegal charging constitutes a deficiency in service.
Note for NRIs and OCIs: As an NRI or OCI, you can initiate most of these steps remotely. Use video consultations with a specialist firm like LawCrust to draft legal notices and file documents digitally with the Registrar’s office. You can also grant a Power of Attorney to a trusted relative or lawyer for physical hearings.
Addressing Specific Pain Points
- Water Leakage Complaints / Structural Issues: Document the failure. If the committee fails to address Structural Repair Needs despite collecting the Repairs Fund, file a complaint with the Registrar citing negligence.
- Lift Maintenance (AMC Concerns): Ensure the society has a valid Annual Maintenance Contract (AMC Concerns) for the lift. The cost must be collected equally from all members in the building, regardless of flat size.
- Garbage Disposal Issue / Cleaning: These fall under Service Charges and must be collected equally. Challenge any attempt to make this area based.
- Security Service Issues: The salary of the security staff should be distributed equally among all units, as security is a uniform service that protects all members equally.
- Non Occupancy Charges: The Supreme Court and most state rules cap this charge at a maximum of 10% of the Service Charges (excluding municipal taxes). Challenge any amount charged above this limit.
Frequently Asked Questions (FAQs) on Maintenance Concerns for NRIs and OCIs
1. As an NRI, can I challenge area-based charges if I’m not physically present?
Absolutely. As an NRI, you can challenge area-based charges online or through a Power of Attorney without being physically present.
2. What if my OCI status affects the society’s handling of dues recovery?
OCI members have equal rights. Dues can be recovered, but you may challenge them if the area based fee violates Society Bye Laws.
3. How does RERA help NRIs with builder handover delays causing maintenance hikes?
RERA mandates a clear handover process and disclosure. If the builder’s delay or non compliance is causing arbitrary maintenance hikes or facility management problems, you can file a complaint online with the RERA authority, citing Section 11, to seek RERA Advisory intervention and penalisation of the builder.
4. Can the society charge a penalty or interest on disputed maintenance amounts?
Yes, societies can charge interest (usually 18–21%) on defaulted fees. Deposit the undisputed portion and notify the society if you dispute the rest due to Maintenance Concerns.
5. What’s the latest on non-occupancy surcharges for vacant NRI flats?
Recent (2025) state circulars and precedents reinforce that the non occupancy surcharge cannot exceed 10% of the total Service Charges. Challenge any higher rate immediately with the Registrar for a quick resolution and refund.
Conclusion
In summary, the practice of charging area based charges for maintenance in India is permissible for capital-related costs like the Sinking Fund and structural repair needs. However, it is legally challengeable when applied to uniform costs like Service Charges.
Empower yourself by immediately reviewing your Society Bye Laws. If the society is overcharging you in contravention of its own rules, you must act decisively. By presenting documented evidence of the bye law violation to the Registrar, you stand a strong chance of overturning the unfair charging method, securing a fairer system for society repairs and all members.
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