RERA Maintenance Charges: What the Law Actually Says (And What's Changed Recently)

Ask ten homeowners how their society's maintenance bill is calculated and you'll likely get ten different answers and at least three confident guesses. It's one of those costs everyone pays but few people fully understand, partly because builders rarely explain it upfront, and partly because the rules sit scattered across a central Act, state-level circulars, and tax notifications that don't always agree with each other.

Here's a clearer picture, grounded in what the Real Estate (Regulation and Development) Act, 2016 (RERA) actually requires, along with a few regulatory and tax developments that have reshaped how maintenance charges work in practice.

Where the Builder's Obligation Comes From

RERA came into force on 1 May 2016, though only 52 of its 92 sections were notified that day, the rest took effect a year later. Tucked inside Section 11(4) are the two clauses that matter most for maintenance:

Section 11(4)(d) makes the promoter (builder) responsible for providing and maintaining essential services water supply, security, lifts, common electrical systems at a reasonable charge, right up until a residents' association is formed and takes over.

Section 11(4)(g) goes further: it requires the builder to use any money collected from buyers for property tax, ground rent, water, electricity, or maintenance strictly for those purposes, and to keep paying these outgoings until physical possession is handed over. Crucially, if a builder pockets this money instead of paying it forward, the liability doesn't disappear once the property changes hands. The builder remains on the hook even after the transfer.

In plain terms: until your Residents' Welfare Association (RWA) is registered and running, the builder can't treat your maintenance money as discretionary income, and can't walk away from unpaid dues just because the keys have changed hands.

What Maintenance Charges Actually Cover

Most societies bundle together a similar set of costs:

Housekeeping, security staff, lift servicing, common-area electrical upkeep, and equipment repairs are usually split among all residents. Many older cooperative societies, particularly in Maharashtra, also apply a non-occupancy charge typically around 10% of service charges on flats that are rented out rather than self-occupied, under their state's model bye-laws. Parking is generally billed separately based on the slots allotted.

A common point of confusion: builders are not obligated to subsidise this cost during the early ownership period. The day you take possession, you start sharing the bill - whether or not you've moved in.

How Much Should You Actually Expect to Pay?

This is where a lot of older advice online is simply out of date. Rates of "Re 1 to Rs 3 per square foot" haven't reflected ground reality for years. Current figures from RERA guidance and consumer-rights resources put the realistic range at roughly Rs 2 to Rs 25 per square foot per month, sometimes higher in premium gated communities with extensive amenities. A society charging the lower end is typically offering basic upkeep; one charging the upper end usually has a clubhouse, landscaped grounds, multiple lifts, and round-the-clock concierge-style services to fund.

At possession, builders commonly ask for 12 to 24 months of maintenance in advance, sometimes alongside a separate one-time corpus or sinking fund meant for long-term repairs, think roof waterproofing or lift replacement years down the line, not routine upkeep.

Advance maintenance deposits, corpus funds, and other possession-stage payments often catch buyers by surprise. If you're budgeting for a property purchase, it's worth understanding the full range of costs that can appear beyond the sale price, including several commonly overlooked expenses.

Three Ways Societies Split the Bill

Per-square-foot billing scales the charge to your flat's size. Fair when apartments vary widely, but it means a 1,800 sq ft flat pays proportionally more for a security guard who protects every flat equally - a frequent source of disputes.

Equal-split billing divides the total cost evenly across all units. Simple and dispute-resistant in societies where flat sizes are roughly uniform, but it can feel lopsided when a studio and a penthouse pay the same fee.

Hybrid billing is increasingly the preferred middle ground: structural costs like sinking funds and property tax follow square footage, while shared services such as security and housekeeping are split equally. Courts and housing experts have generally favoured this approach because it reflects how those costs are actually incurred.

The GST Layer Most People Miss

This is genuinely new ground that older RERA explainers tend to skip entirely, and it can meaningfully change your monthly bill.

Under CBIC Circular No. 109/28/2019-GST, an RWA's maintenance collection is exempt from GST only if the charge stays at or below Rs 7,500 per flat per month and only if the RWA's annual turnover crosses Rs 20 lakh (below that, GST doesn't apply at all, regardless of the per-flat amount). The circular's own illustration is blunt: cross Rs 7,500, and the entire amount becomes taxable at 18%, not just the portion above the threshold.

That reading hasn't gone unchallenged. The Madras High Court, in rulings involving RWAs such as Greenwood Owners Association and TVH Lumbini Square Owners Association, held that only the amount exceeding Rs 7,500 should attract GST — not the full sum. The tax department didn't appeal in at least one of these cases, so the judgment stands, but plenty of RWAs across other states still follow the more conservative CBIC reading to avoid disputes. If you're budgeting for a society where charges hover near that threshold, it's worth asking your managing committee which interpretation they've adopted, since it can swing your tax outflow noticeably.

What Regulators Are Tightening Around Builder Accountability

State RERA authorities have been increasingly specific about how builders must handle this money rather than just whether they're allowed to collect it. Guidance from bodies such as MP RERA, for instance, makes clear that maintenance and corpus collections are not the builder's income, they cannot be routed into the company's general account, and must instead sit in dedicated, separately maintained bank accounts earmarked for building upkeep and corpus respectively.

Combined with Section 11's existing obligations, this has pushed builders toward more itemised disclosures: clearer breakdowns of what's being charged, how often, and what it's funding, usually built into the maintenance agreement signed at possession rather than left vague.

A Few Practical Takeaways

If you're buying or already own a flat, the things actually worth checking are straightforward: get the maintenance amount and frequency written into your agreement rather than verbally promised; ask whether the society uses per-square-foot, equal, or hybrid billing, since that affects your monthly outlay more than almost anything else; and if your charges are near the Rs 7,500 mark, find out how your RWA is treating GST before it shows up as a surprise on your bill.

None of this is about distrust, most builders and RWAs handle maintenance honestly. But maintenance charges sit at the intersection of three different rulebooks - RERA, state cooperative society law, and GST, and that's exactly the kind of overlap where genuine confusion (and the occasional overcharge) tends to creep in. Knowing which rule governs which part of your bill is the simplest way to make sure you're paying for what you're actually getting.