How Apartment Maintenance Charges Are Computed — and Why the Basis Matters More Than the Number

Every buyer asks what maintenance costs. It is the wrong question, asked in good faith, and the honest answer is more useful than the number would have been: what a community charges is set by a body that does not exist on the day you ask, and what it charges is decided by a basis of computation that you can find out today.

The basis is the content of this post. It determines whether your home subsidises a smaller one or the reverse, it is chosen once and rarely revisited, and it is written into documents you can read before you sign anything.

The two bases, and what each one does

Per square foot of area. The community's running cost is divided by the total chargeable area and levied on each home in proportion to its own. A larger home pays proportionally more. This is the common basis in newer apartment communities, and the rationale is that a bigger home represents a bigger share of the asset being maintained.

Equal share per unit. The running cost is divided by the number of homes. Every home pays the same, regardless of size. The rationale is that most of what the money buys — a security guard at the gate, a lift that runs, water pumped to a tank, a road swept — is consumed per household rather than per square foot.

Neither is right in the abstract, and both are defensible. What is not defensible is not knowing which one applies to you.

A third pattern is worth naming because it is increasingly common and reads as a compromise: a hybrid, where building and estate services are levied on area and a defined set of common services is levied per home. It is more work to administer and it is usually the fairest of the three in a community with a wide spread of unit sizes.

Note that where an area basis is used, the area used is itself a choice — carpet, built-up or super built-up. Two communities with the same rate per square foot are not comparable unless they measure the square feet the same way. Ask which area the levy is computed on, and read it against the area in your agreement.

What actually drives the total

Maintenance is a payroll and a set of contracts, and it is much more predictable than it looks once you see what is inside it.

• People. Security, housekeeping, the facility manager, technicians, gardeners. In most communities this is the largest single line, and it rises with wage costs rather than with anything the association controls.
• Power for common areas. Lifts, pumps, lighting, the sewage treatment plant, the fire system, and standby generation. A tall tower pumps water higher and runs more lift hours.
• Water. Supply, tankers where the piped supply is short, and the running of a treatment plant so that treated water can be reused for flushing and landscape.
• Annual maintenance contracts. Lifts, pumps, the diesel generator, the fire system, the water treatment plant, the gate and access control, CCTV. These are contractual, quotable and comparable — the honest place to look when a community claims its costs are unavoidable.
• Landscape and pest control, which scale with the open area rather than with the number of homes.
• Insurance and statutory compliance — the building's own cover, lift inspections, fire compliance, testing.
• Administration — accounting, audit, software, bank charges, and the association's own filings.

Two of those lines explain most of the variation between communities. An amenity-heavy development carries structurally higher running costs, because a swimming pool, a gym, a clubhouse and an extensive landscape are not one-time capital items — each one arrives with a permanent staffing, power and consumables bill. And a low-density community spreads the same estate cost across fewer homes. Neither is a criticism; both are arithmetic that a buyer should do before they fall in love with the brochure.

Who sets the rate, before and after

Before handover, the promoter runs the services and recovers the cost on the terms in your agreement, commonly by collecting maintenance in advance for a defined period. Section 11(4)(d) of the Real Estate (Regulation and Development) Act, 2016 deals with the promoter's responsibility for providing and maintaining essential services, on reasonable charges, until the maintenance of the project is taken over by the association of allottees. Section 11(4)(e) of the same Act deals with enabling the formation of that association, and section 17(1) with handing over the necessary documents and plans, including the common areas, to it.

After handover, the association sets the rate. The mechanism is a budget: an estimate of next year's costs, divided on the adopted basis, put to the general body, and revised annually. That is why no honest developer can tell you what maintenance will cost in year five — the person who will decide it is your neighbours, in a meeting, against a budget.

Which statute an association is constituted under is a question about the documents the promoter executed, not a matter of preference. In Karnataka the candidates include the Karnataka Apartment Ownership Act, 1972, the Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972, and the general law under which a society or a company is registered. Ask which one your community sits under and read the Act itself as it stands — a summary of an association statute, including this one, is not a substitute for the instrument that constituted your association.

The indirect-tax question on collections

A residents' association collecting contributions from its members is, in the ordinary case, making a supply to them. There is an exemption for such contributions up to a threshold per member per month, and there is a separate registration threshold that applies to the association's turnover. Both are set by notification rather than in the body of the Act, both have been amended, and the treatment of contributions above the threshold has been clarified by circular and tested in litigation.

So this post names the authority and stops. The Central Board of Indirect Taxes and Customs publishes the exemption notifications and the clarifications under the Central Goods and Services Tax Act, 2017. Your association's chartered accountant reads them against your actual collections. Any page that prints the threshold is telling you what somebody published last, which is a different thing from what is in force.

Arrears, and how a functioning association handles them

Non-payment is the ordinary failure mode of a residents' association, because the cost does not fall when a household stops paying — it is simply redistributed onto the households that do pay. A community that handles arrears well does three things: it publishes the ageing, so members can see the size of the problem; it applies whatever consequence its own bye-laws provide, consistently rather than selectively; and it escalates through the process the constituting statute lays down rather than through improvised measures at the gate. Arrears that are tolerated for two years are not a cash-flow problem; they are a governance problem with a cash-flow symptom.

Four questions to ask before you buy

1. What is the basis of computation, and on which area? Per square foot or equal share, and carpet, built-up or super built-up. Get it in writing.
2. What period of maintenance is collected in advance, and what happens to the unspent balance when the association takes over? The answer belongs in the agreement, not in a conversation.
3. What is in the amenity list, and what does each item cost to run? The clubhouse, the pool and the generator are the ones with permanent bills attached.
4. When is the association expected to be formed, and what does the handover statement show? That question runs straight into the funds discussed in the companion post on corpus and sinking funds.

And one question for residents rather than for a sales team, if the community already exists: has there been a special assessment, and what was it for? A single honest answer to that tells you more about how a place is run than any brochure.

Why no figure appears on our project pages

For the same reason it does not appear here. A maintenance figure quoted before an association exists is a forecast presented as a fact, and the person who will actually set it has not moved in yet. What can be published honestly is the mechanism, the basis and the questions — which is what the project pages and the after-you-buy questions in our FAQ carry instead.