Residential Community Maintenance Charges – An Overview

11/12/2014

Based on the area of property that falls under common amenities in residential complexes and the quality of residential community maintenance planned by Resident Welfare Associations (RWAs) the cost of maintenance is being calculated and apportioned to each of the household.

The residential community maintenance charges are vital in ensuring the benefits of community living is sustained for longer time frame. Maintenance charges are collected mostly on a monthly mode or even annually by the resident welfare associations for the upkeep of the community.

Types of Maintenance Charges

  • Fixed Monthly Maintenance Charges

Based on the monthly common maintenance expenditure that are required for the overall maintenance activities, a fixed monthly maintenance charge is collected from each resident household is being collected. This is mostly calculated based on the area consumed by each resident in terms of utilization of living space and an additional charge for maintaining common area. That component is being charged equally split by all residents. This monthly fixed maintenance charges are being spent on housekeeping activities for general cleanliness, appointment of security guards, purchase of minor items, payment of electricity charges and so on.

  • Planned Maintenance Activities

As living spaces go through a regular wear and tear, another maintenance charge component is collected on a demand basis as required to do some planned maintenance activities. This is collected in not a routine basis but purely on a need basis. This component will be used to conduct some expensive maintenance activities once in a while like painting of common area, minor construction or modification of common amenities for everyone’s usage and so on.

  • Unplanned or Adhoc Maintenance Charges

Indeed, it is true that residential complexes go through more wear and tear due to regular usage of common area amenities. This triggers adhoc maintenance requirements to keep the overall health of the residential complex and well-being of residents living in gated communities. Such unplanned maintenance activities if not done on-time, the cost of doing it at a later time will be even more higher and that invites unnecessary compliance risks.  

Typical Components of Residential Apartment Maintenance Charges

In a generic manner the following are the components of maintenance charges.

  • Service & Utilities charges:Electricity bills for the common area usage, provision of security services, lift operator salary, elevator maintenance, payment for housekeeping professionals or contractors, and keeping general cleanliness off parks, play areas and gardens, etc.
  • Repair and maintenance charges:In large gated communities the area of common usage is high and it involves lot of minor and major construction of amenities like roads, installation of power generators, electricity transformers, laying of internal roads, water pumping stations, sewage drainage, elevator maintenance, street lights, utility or equipment maintenance and the associated repair charges.
  • Parking Area maintenance charges: In most cases, resident owners purchase their own parking spaces. In some communities there are common parking areas where residents get to pay different rates for type of vehicles owned by them.
  • Water Charges:The seasons vary and regular supply of Water for everyday usage for 100s or 1000s of residential apartments is becoming a challenge as overall ground water levels have gone dry. Residential Welfare Associations (RWA) Committee members strike contracts with water suppliers from Government or Private based on the demand.
  • Non-occupancy charges: When not utilizing the residential properties, owners are expected to pay a fraction of the cost of the regular monthly maintenance fees (Mostly 10%). This helps in honouring payments schedule of contractors and maintaining their compliance.
  • Reserve Fund: To plan and keep funds for planned maintenance, often residents are collected a Reserve Fund – usually at the beginning of the occupation or based on demand. This reserve fund is kept for meeting contingencies or conducting unplanned maintenance requirements.
  • Property Tax: The Property tax is charged by the authority bodies of respective state government.
  • Late / Default Payment Interest: Residents are charged interests for delaying or defaulting monthly maintenance charges.
  • Insurance charges: Based on the common area amenities that comes with the Gated Community, lot of equipment are bought to provide comfort. These are equipment like elevators, power generators, pumping stations etc. Such equipment attracts insurance charges to protect their value and continuity. Residents need to collectively bear the annual premium payment.

The above and community specific maintenance charges help in ensuring a harmonious and comfortable living in a Gated Community.

Utilization of Community Maintenance Charges

Now that there is an arrangement to collect monthly community maintenance charges on time as decided by RWAs the challenge lies in properly utilizing the funds to get required services done from 3rd party businesses, contractors and individuals. This is fast becoming a problem as there are a lot of businesses who cannot be trusted and yet receive the maintenance contracts and waste everyone’s money. Let’s continue to discuss possible and practical solutions that help RWA Committee Members to properly manage the residential community maintenance.

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