Supreme Court’s Latest Ruling on Society Maintenance Charges: What You Must Know

Maintenance charges refer to the recurring fees collected from property owners to manage and maintain shared spaces and services in a residential society. These typically include:

• • Cleaning of common areas

• • Security and surveillance

• • Lift maintenance

• • Garden and landscape upkeep

• • Water and electricity in common areas

• • Repairs to shared infrastructure

These charges apply whether you reside in the unit or not. This principle was recently upheld in the Supreme Court judgement on society maintenance cha

In a notable ruling, the Supreme Court clarified that maintenance charges must be reasonable, transparent, and mutually agreed upon. Builders cannot arbitrarily impose fees or change the terms once the buyer agreement is signed.

The Court further stated:

• • Maintenance charges must be outlined clearly in the sale agreement.

• • Builders are responsible for upkeep until the Resident Welfare Association (RWA) is officially formed.

• • These charges should not be used for purposes unrelated to the maintenance of common facilities.

This decision empowers homeowners and holds developers accountable, especially in growing urban markets.

Real Estate Regulatory Authority (RERA) plays a key role in defining fair housing practices. Under RERA rules for society maintenance charges, the following points are mandated:

1. Advance Maintenance Should Be Limited

Builders are allowed to collect advance maintenance charges, but usually not more than one year’s worth, and only until the RWA takes over.

2. Complete Transparency Required

As per RERA rules for maintenance charges, developers must provide buyers with a breakdown of the amount, frequency, and exact usage of these charges.

3. No Profit-Making from Maintenance

The law clearly states that maintenance charges must not be a source of profit for developers. They are strictly for operational and upkeep purposes.

4. Separate Maintenance Account

Funds collected must be deposited into a dedicated maintenance account, which can be audited and reviewed by the residents.

These safeguards offer much-needed clarity for buyers considering under-construction projects in Bangalore or any other city.

Another important factor to consider is GST on society maintenance. According to current regulations:

• • If monthly maintenance charges exceed ₹7,500 per flat, GST at 18% is applicable.

• • Societies with annual turnover above ₹20 lakh must register for GST and comply.

• • If the charge is ₹7,500 or less, GST is not applicable.

This GST provision is often overlooked, but it can significantly impact your annual housing costs.

collected, managed, and utilised. These may include:

• • Due dates for fee payments

• • Late payment penalties

• • Voting rights tied to payment status

• • Budget allocation for repairs and upgrades

Whether you live in a small housing society or a large, gated community, it’s essential to familiarise yourself with these society maintenance rules. They ensure you know where your money goes and how to voice your concerns.

Societies generally adopt one of the following three methods to determine how much each resident pay:

• • Per Square Foot: Maintenance is calculated based on the area of the flat. Larger units pay more.

• • Equal Division: Every unit pays the same amount, regardless of the size. This is common where units are uniformly sized.

• • Hybrid Model: A fixed base charge applies to all, plus a variable component based on square footage.

The chosen model must be transparent and approved by either the developer or the residents’ association.

With Bangalore’s real estate sector growing rapidly, under-construction projects in Bangalore must now be more compliant than ever. Buyers must ensure that:

• • Maintenance charges are clearly defined in the sale agreement.

• • No ambiguous or hidden costs are levied.

• • GST and other applicable charges are communicated upfront.

We at Casagrand ensure that our under-construction projects in Bangalore comply with RERA rules and the latest Supreme Court judgement on society maintenance charges. This guarantees homebuyers fair treatment and full transparency from the outset.

With the latest Supreme Court judgement on society maintenance charges and strict RERA rules for maintenance charges in place, homeowners now have more power and clarity than ever. Understanding how maintenance charges are calculated, what rules apply, and when GST on society maintenance kicks in can help you make smarter housing decisions.

If you’re moving into a completed flat or looking at an under-construction project, it’s better to be informed and get what you pay for—nothing more, nothing less.

Society maintenance charges are essentially the operational lifeblood of a residential complex. When you pay this fee, you are contributing to the upkeep of everything outside the four walls of your individual apartment.

By law and standard housing practices, common areas include any space or amenity that is shared collectively by residents. This spans across:

1. Structural Areas: Lobbies, stairwells, corridors, and terraces.
2. External Grounds: Shared parking lots, compound walls, internal pathways, and open gardens.
3. Essential Utilities: Lift shafts, water pump rooms, drainage systems, and central generator setups.
4. Recreational Amenities: Clubhouses, gyms, swimming pools, and children’s play areas.

Who sets the housing society maintenance charges rules? The framework is established by state-specific Cooperative Societies Acts, the local rera rules for maintenance charges (which mandate that builders cannot charge ad-hoc, non-disclosed fees before handing over possession), and the society’s own registered Model Bye-Laws.

Once the society is established, the elected Resident Welfare Association (RWA) or Managing Committee administers these rules for society maintenance charges, though the general body must approve any major revision.

Managing committees generally use specific frameworks for how to calculate maintenance charges across the community. Depending on the society’s bye-laws, they might choose a flat-rate system (equal charges for all) or a per-square-foot method to determine how to calculate maintenance charges for apartments of varying sizes. The total bill is generally divided into several key functional components:

Security and Housekeeping

This component covers the human resources and operational tools needed to keep the community safe, hygienic, and organized. It includes salaries for security personnel, the operational cost of CCTV surveillance, biometric systems, and smart gate applications. It also funds the housekeeping staff, sweeping machinery, and specialized cleaning supplies used daily across common corridors and open areas.

Utilities and Repair

This section tackles the everyday running and physical wear-and-tear of the property.

• Common Utilities: Electricity consumed by streetlights, corridor lighting, water pumps, and elevators, along with central water procurement costs.
• Service and Repair: Regular maintenance charges in society structures cover the upkeep of elevators, mechanical equipment, plumbing overhauls in shared pipes, and structural repairs. It also covers administrative expenses like accounting software or manager salaries.

These are defensive financial measures for the long-term health of the building.

• Insurance: Covers the premium for protecting the primary building structure against unpredictable disasters like earthquakes, fire, or structural accidents.
• Sinking Fund: A mandatory emergency reserve fund. Set by society bye-laws (usually a minimum of 0.25% of the construction cost of each flat per annum), this fund accumulates over the years to pay for massive future structural updates, such as complete external repainting or structural retrofitting.

When managing or paying these dues, two critical tax and legal frameworks frequently apply to protect homeowners and ensure transparency:

• GST on Society Maintenance: Under current tax regulations, Goods and Services Tax (GST) is applicable at 18% only if a resident’s monthly maintenance contribution exceeds ₹7,500 and the society’s total annual turnover crosses ₹20 lakh.
• Supreme Court Judgment on Society Maintenance: The apex court and various judicial precedents have repeatedly reinforced that paying maintenance is a legally binding obligation for all flat owners under state apartment ownership laws, regardless of whether the unit is occupied.
  Furthermore, judicial rulings underscore that while societies have the autonomy to decide on billing structures, they cannot levy discriminatory or arbitrary charges that violate the core principles of mutuality and equity (such as overcharging larger flats for common amenities like security or lifts that everyone uses equally).

A frequent point of friction in rental arrangements is determining who handles the society maintenance charges for tenants. Legally, the ultimate liability to clear society dues rests squarely on the property owner. However, in practical execution, it entirely depends on the clauses written into the Leave and License Agreement.

• Inclusive Rent: If the rent agreement states that maintenance is included, the tenant pays a lump sum to the owner, and the owner clears the society bill.
• Exclusive Structure: If specified otherwise, the tenant pays the base rent to the owner and pays the maintenance directly to the society app or office.
  If a flat is completely vacant or leased out to a tenant, the society can levy a “Non-Occupancy Charge” onto the owner. However, state bylaws legally cap this specific charge at a maximum of 10% of the standard service charge component.