The Real Estate (Regulation and Development) Act, 2016 (RERA) addresses issues related to maintenance charges and common area management to ensure transparency, accountability, and fair practices in the real estate sector. Here’s how RERA handles these aspects:
1. Maintenance Charges:
Obligation of the Developer: Under RERA, developers are required to hand over the common areas of a project, including amenities and facilities, to the residents’ association or society once the project is completed and the possession of flats is handed over. This includes the maintenance of common areas such as elevators, gardens, parking areas, and more.
Reasonable Charges: The maintenance charges, which are typically collected by the builder or society for the upkeep of common areas, should be reasonable and based on actual costs incurred. Builders cannot charge exorbitant or arbitrary fees for maintenance and must adhere to the terms agreed upon with buyers.
Transparency: The developer must maintain transparency in the calculation of maintenance charges. The breakdown of charges must be provided to the homeowners, and these charges should be fair and not excessive. Homebuyers are entitled to a detailed explanation of how the maintenance fees are being utilized.
2. Common Area Management:
Handing Over of Common Areas: Once the majority of the units in the project are sold and possession is handed over, the developer is required to transfer control of the common areas to the residents' association or society. The developer must also ensure that the association is functional and capable of managing the common areas.
Formation of a Society: RERA encourages the formation of an apartment owners’ association or residents’ welfare association to take over the management of common areas. These associations are responsible for the day-to-day upkeep of the common spaces, resolving disputes, and managing maintenance funds.
Maintenance Fund: The funds collected for maintenance must be deposited in a separate bank account, and they must only be used for the maintenance of the common areas. The association or society must keep proper accounts of these funds, and periodic audits should be conducted to ensure transparency.
Legal Framework for Disputes: If there are disputes over maintenance charges or common area management, residents can approach the RERA Authority or RERA Appellate Tribunal for redressal. RERA empowers state authorities to resolve issues between builders, developers, and buyers related to the handover and management of common areas.
3. Builder’s Responsibility Post-Handover:
Defects Liability: Under RERA, developers are responsible for maintaining the quality of construction for a specified period (usually 5 years for structural defects and 2 years for non-structural defects) after handing over possession. If there are defects in the common areas or amenities during this period, the builder must rectify them at no extra cost to the buyers.
4. Right of Homebuyers:
Right to Information: Homebuyers have the right to receive information about how their maintenance charges are being spent. They can request transparency regarding the usage of funds and demand an audit of the accounts.
Consumer Protection: RERA also provides protection for homebuyers, allowing them to approach consumer courts or RERA authorities if they feel that the maintenance charges are unfair, or if the common areas are not being maintained properly.
5. State-Specific RERA Rules:
Each state in India may have specific rules and regulations regarding the management of maintenance charges and common areas. These rules are created to address the unique needs of the residents in different regions, but the overarching guidelines are consistent with RERA’s objectives of transparency, fairness, and proper management of common spaces.
Conclusion:
RERA addresses maintenance charges and common area management by ensuring that builders follow transparent processes, hand over control of common areas to residents' associations, and set up mechanisms for dispute resolution. The law encourages the fair use of funds collected for maintenance and guarantees that homebuyers have a say in the management and upkeep of their residential complexes.
Dear Client,
The Real Estate (Regulation and Development) Act, 2016 (RERA) establishes a regulatory framework to ensure transparency and fairness in dealing with maintenance charges and the management of common areas in real estate projects. The Act outlines specific obligations for developers and safeguards for homebuyers to prevent disputes and exploitation.
1. Developer's Responsibility Before Handover
• Obligation to Maintain Common Areas: Under Section 11 of RERA, the developer is responsible for maintaining common areas and providing essential services until the project is handed over to the Residents’ Welfare Association (RWA) or society.
• Collection of Maintenance Charges: Developers are permitted to collect advance maintenance charges but must clearly disclose these amounts to buyers at the time of purchase. These charges must be reasonable, and their computation must be transparent, typically based on the carpet area of the unit.
• Disclosure Obligations: RERA mandates developers to disclose all details about common area maintenance, including estimated costs and service details, in the sale agreement and project registration.
2. Formation of RWA and Handover of Common Areas
• Formation of RWA: As per Section 17 of RERA, the developer is obligated to facilitate the formation of an RWA or society within a specified time after a majority of units are sold.
• Handover of Responsibilities: The developer must transfer the management of common areas, along with an audited account of maintenance charges collected and spent, to the RWA upon its formation.
• Accountability for Unsold Units: Developers must bear the maintenance costs for unsold units, ensuring buyers are not unfairly burdened.
3. Safeguards Against Mismanagement and Excessive Charges
• Prohibition of Hidden Charges: RERA prohibits developers from levying arbitrary or undisclosed charges on homebuyers.
• Transparency in Agreements: All costs related to maintenance and common area management must be explicitly mentioned in the builder-buyer agreement to prevent disputes.
4. Complaint and Dispute Resolution Mechanism
• Filing Complaints with RERA: Homebuyers can file complaints with the respective RERA authority if they believe maintenance charges are excessive, common areas are not being adequately maintained, or handover obligations are not met.
• Adjudication and Remedies: RERA authorities have the power to order refunds, impose penalties, or mandate corrective measures in cases of non-compliance by developers.
5. Long-Term Maintenance Responsibility
Defect Liability: Under Section 14 of RERA, the developer is liable to rectify structural or service defects in common areas for five years after possession, ensuring the quality of maintenance provided.
Conclusion
RERA addresses maintenance charges and common area management comprehensively, balancing the responsibilities of developers with the rights of homebuyers. By mandating transparency, accountability, and an effective grievance redressal mechanism, the Act ensures fair and efficient management of common areas in real estate projects.
Hope this answer helps you.
Dear Client,
The Real Estate (Regulation and Development) Act, 2016 (RERA) establishes a regulatory framework to ensure transparency and fairness in dealing with maintenance charges and the management of common areas in real estate projects. The Act outlines specific obligations for developers and safeguards for homebuyers to prevent disputes and exploitation.
1. Developer's Responsibility Before Handover
• Obligation to Maintain Common Areas: Under Section 11 of RERA, the developer is responsible for maintaining common areas and providing essential services until the project is handed over to the Residents’ Welfare Association (RWA) or society.
• Collection of Maintenance Charges: Developers are permitted to collect advance maintenance charges but must clearly disclose these amounts to buyers at the time of purchase. These charges must be reasonable, and their computation must be transparent, typically based on the carpet area of the unit.
• Disclosure Obligations: RERA mandates developers to disclose all details about common area maintenance, including estimated costs and service details, in the sale agreement and project registration.
2. Formation of RWA and Handover of Common Areas
• Formation of RWA: As per Section 17 of RERA, the developer is obligated to facilitate the formation of an RWA or society within a specified time after a majority of units are sold.
• Handover of Responsibilities: The developer must transfer the management of common areas, along with an audited account of maintenance charges collected and spent, to the RWA upon its formation.
• Accountability for Unsold Units: Developers must bear the maintenance costs for unsold units, ensuring buyers are not unfairly burdened.
3. Safeguards Against Mismanagement and Excessive Charges
• Prohibition of Hidden Charges: RERA prohibits developers from levying arbitrary or undisclosed charges on homebuyers.
• Transparency in Agreements: All costs related to maintenance and common area management must be explicitly mentioned in the builder-buyer agreement to prevent disputes.
4. Complaint and Dispute Resolution Mechanism
• Filing Complaints with RERA: Homebuyers can file complaints with the respective RERA authority if they believe maintenance charges are excessive, common areas are not being adequately maintained, or handover obligations are not met.
• Adjudication and Remedies: RERA authorities have the power to order refunds, impose penalties, or mandate corrective measures in cases of non-compliance by developers.
5. Long-Term Maintenance Responsibility
Defect Liability: Under Section 14 of RERA, the developer is liable to rectify structural or service defects in common areas for five years after possession, ensuring the quality of maintenance provided.
Conclusion
RERA addresses maintenance charges and common area management comprehensively, balancing the responsibilities of developers with the rights of homebuyers. By mandating transparency, accountability, and an effective grievance redressal mechanism, the Act ensures fair and efficient management of common areas in real estate projects.
Hope this answer helps you.
