Explained – Flat maintenance charges law in Hyderabad: Small flat owners can seek legal remedies if forced to pay uniform maintenance charges, lawyers say.
Residents of a new apartment in Alkapur Township, one of the rapidly developing residential destinations in Hyderabad, were engaged in a heated discussion recently. Reason: One-year maintenance provided by the builder was about to end and residents were having different opinions on the method of calculating maintenance costs.
The existing residents’ association, which was elected by all members last year, proposed to fix future maintenance charges on the basis of per sqft area of flats. However, some owners proposed to have uniform charges for all flats irrespective of their sizes. Animosity prevailed during the discussion as this society has flats of varying sizes, ranging from 1046 sqft to 2020 sqft and the proposal for uniform charges made by a group of flat owners was not acceptable to all.
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While the real estate market in Hyderabad is bustling with activities amid rapidly rising prices, homebuyers are often subjected to this peculiar problem of deciding the maintenance costs of apartments, several months after the purchase.
For the initial 1-2 years, builders look after the maintenance of the apartment/building for which they take an advance on a per sqft basis at the time of purchase itself. However, trouble starts when builders have to exit maintenance and residents have to decide the future course on their own.
As per RERA rules in Telangana, the promoter/builder is responsible for providing and maintaining essential services in the project until the maintenance is taken over by the association of allottees. The cost of maintenance is to be borne by both the Promoter and the Allottees proportionate to the plots/apartments/buildings in their respective occupation.
The above-mentioned society is not the first one to be facing such a situation. Two years back, a neighbouring residential society faced a similar issue. However, after much acrimony that lasted several weeks, the residents eventually settled for a maintenance basis per sqft.
To provide guidance to future and existing homebuyers and owners’ associations in Hyderabad, FE Money talked to several experts to find out what would be the best and legally-sound method to decide on maintenance charges for residents of new apartment buildings in the city. Let’s look at what they say.
How maintenance charges should be decided by owners’ associations?
Experts are of the view that maintenance charges should be on a proportional or per sqft basis when the sizes of flats vary.
“The maintenance charges should be charged as per sq ft for apartments of different sizes,” Altaf Fathima, Partner at DSK Legal, in Hyderabad.
Although there is no specific rule for deciding maintenance charges for common areas in an apartment in Telangana, the general norm followed is the maintenance fee being charged per sqft owned by each apartment owner, she adds.
In some cases, where the square footage owned by different owners varies to a small extent, the owners’ associations tend to split the maintenance equally among all apartments.
Manini Roy, Senior Associate at TAS Law, also says that maintenance charges should be on a per sqft basis for apartments.
“As bigger flats will accommodate more people and their usage of the common area will be much more in comparison to a smaller flat, which will accommodate few people, so asking smaller flat owners to pay at par with the others is unfair,” says Roy.
Prashant Thakur, Regional Director and Head of Research at Anarock Group says just like many other states, the Telangana Apartments (Promotion of Construction and Ownership) Act, 1987 also mandates that a society needs to levy maintenance charges in proportion to the size or area of the flat held by owners.
“However, a few societies also follow the practice of levying equal maintenance charges from all flat owners irrespective of the size and area of the flat. This practice as such illegal and can be questioned in a court of law,” says Thakur.
Who can decide the formula for calculating maintenance charges in Hyderabad?
Conflict among residents of apartment societies often emerges as currently there is no law providing for a specific method for determining maintenance charges. In the absence of a clear-cut law, the existing association of residents, which is commonly an elected body, becomes the deciding authority.
The law governing regulations of Apartments in the state Telangana Apartments (Promotion of Construction and Ownership) Act, 1987.
“Chapter III of Telangana Apartments Act, 1987 provides for the special facilities which deal with the entitlement of common area and facilities by the apartment owner. However, the facilities as envisaged under Chapter III of the Telangana Apartments Act, 1987 are only made applicable to the owners who duly execute and register a Declaration submitting themselves to the provisions of the Act,” says Siddharth Joshi, Senior Associate, SKV Law Offices.
Citing a previous case, Joshi says the Telangana State Commission while considering a complaint filed by Sumanth Reddy (Apartment Owner) against Aparna Heights-Li Owners Welfare had held that when there is a clear clause in the Bye-Laws, which empowered the association to impose the maintenance charges proportionally, then such resolution cannot be challenged by the Apartment Owner.
The appellant in the above case was occupying a duplex house that had a larger built-up area in the society.
“The Bye-Laws as formulated by the association of the Apartment owners will determine the maintenance charges to be paid by the Apartment owner for the common areas,” says Joshi.
Aditya Chopra, Managing Partner at Victoriam Legalis, Advocates & Solicitors, says the specific rule for deciding maintenance charges for common areas in an apartment in Hyderabad is outlined in the bye-laws of the Association of apartment owners formed under the Telangana Apartments Act, 1987. Section 12 of the Act empowers the association of apartment owners to make bye-laws for the administration and management of the property.
“These bye-laws are formulated by the association itself and may take into consideration factors such as the size of the apartment, facilities provided, and other relevant considerations. Therefore, the method for calculating maintenance charges can vary from one apartment complex to another,” says Chopra.
“The Act does not explicitly prescribe a specific method for determining maintenance charges. Therefore, whether maintenance charges should be on a per sqft basis for apartments of different sizes or uniform for all flats is left to the discretion of the association of apartment owners. The decision on the method for calculating maintenance charges is typically outlined in the bye-laws of the association,” he adds.
However, talking about the method of deciding maintenance rates, Chopra suggests owners’ associations should do the calculation on a proportional basis, which is also in line with the RERA rules.
“While the Telangana Apartments Act, 1987 does not explicitly prescribe a specific method for determining maintenance charges, the RERA rules in Telangana emphasize that the cost of maintenance is to be borne proportionately by the Promoter and the Allottees based on the size and occupation of plots/apartments/buildings. This indicates that maintenance charges can be calculated on a proportional basis, which is in line with the principle of proportionate distribution of costs,” says Chopra.
Chopra further suggests that decisions taken by the apartment owners’ association, including the imposition of maintenance charges, should align with the RERA rules and the provisions of the Telangana Apartments Act, 1987.
Societies, which do not have clear bye-laws for maintenance charges, will always find it difficult to accommodate conflicting views among owners. Moreover, such conflicts often land in consumer forums and courts
For home buyers, therefore, it is important to go through the bye-laws laid down by the owners’ association before purchasing a flat in an existing apartment.
“It is recommended to go through the clauses of the maintenance agreement/bye-laws laid down by the owners’ association before purchasing an apartment with respect to maintenance charges as such details are mentioned in byelaws,” says Fathima.
Can large flat owners force small flat owners to pay uniform charges?
Experts believe that uniform maintenance charges in an apartment with flats of varying charges are unfair to small flat owners.
However, as the owners’ association is formed by a majority vote of residents, it can decide whether to have maintenance charges on a per sqft basis or uniform rates for all. But resident associations should ideally go by consensus instead of majority votes to avoid any legal dispute in future.
Fathima says that In India Bulls Centrum Owners welfare cooperative society Vs V. Srikant & Anr (F.A. 641 of 2018 against C.C. 137 of 2017), the State Dispute Redressal Forum, Telangana held that the association can collect maintenance as per sqft basis instead of uniform charges as apartments vary in sizes and it will be unfair to ask the owners of smaller flats to pay at par with owners of bigger flats.
However, the forum also held that a decision of the majority will prevail. In the India Bulls Centrum case, the owners’ association was agreeable to the maintenance to be charged as per sqft basis, which was further in consonance with the bye-laws of the society.
Legal remedies: What small flat owners can do if forced to pay uniform charges?
Technically, if an owners’ association comprises a majority of large flat owners, it can temporarily force small flat owners to pay uniform charges if it is in conformity with bye-laws of the association. Though many experts view such action to be illegal, small flat owners caught in such situations can seek several legal remedies.
“The small flat owners can challenge the association or society members in the court as the apartment act clearly states otherwise – i.e. to levy charges based on the size of the flat,” says Thakur.
“The flat owners can go to any court of law to file a case against the majority in such cases. It can start with consumer forum but if no resolution takes place then they can even approach the various courts,” he adds.
According to Fathima, small flat owners may approach the Registrar of Societies to file a complaint against the society. They may also approach the Consumer Forum. Approaching the police is not advised as the issue will be seen as a civil dispute.
“Small flat owners have legal remedies available, including filing complaints with RERA authorities, approaching an Appellate Tribunal/Forum/Court in case of being aggrieved by the order of any forum, and seeking resolution through the established legal avenues,” says Chopra.
Can owners’ associations punish small flat owners for not paying uniform charges?
Small flat owners’ in a society having flats of varying sizes may refuse to pay uniform charges and seek legal remedies if they are forced to do so or face any punitive measures from the owners’ association.
Chopra say that if the resident society attempts to punish or impose restrictions/penalties on smaller flat owners for non-payment of uniform maintenance charges, this action could potentially be challenged.
According to Chopra, if small flat owners face punitive actions or disputes regarding maintenance charges, they have several legal remedies available, including:
- Registrar Complaint: Small flat owners can file a complaint with the Registrar under the Act, seeking intervention and resolution.
- Consumer Forum: They can approach the appropriate consumer forum for redressal, especially if there are allegations of unfair practices or consumer rights violations.
- Civil Court: Small flat owners can initiate legal proceedings in a civil court to address grievances related to property rights, breaches of contract, or violations of the Act or bye-laws.
- RERA Tribunal: Such actions can also be challenged under the RERA Act.
“If the bye-laws of the Society have a grievance redressal forum and mechanism, the resident should first approach them. The residents may also approach High Court via writ jurisdiction for any interim relief and may also approach Consumer Forum for compensation and damages,” suggests Roy.
