Maintenance charges in a Maharashtra cooperative housing society are not a single fee — they are a bundle of up to eight distinct components, each with its own legal basis, calculation method, and permissible uses. The managing committee is required by law to present a budget at the AGM each year showing how maintenance will be collected and spent.
If your maintenance bill has ever seemed unclear, or if you have wondered whether your society is charging correctly, this breakdown will give you the framework to understand — and verify — every line item.
The 8 Components of CHS Maintenance
Service Charges
Covers day-to-day operational costs: security staff salaries, housekeeping, common area electricity, lift maintenance, pest control, and administrative expenses. This is typically the largest component of the bill.
Usually split equally among all flats, or proportionally by area
Repair & Maintenance Fund
A reserve built up over time to fund routine repairs — painting, plumbing, civil work, terrace waterproofing, and equipment replacement. The AGM decides the annual contribution rate based on the society's maintenance plan.
Typically proportional to flat area (per sq ft)
Sinking Fund
A statutory long-term reserve for major capital expenditure — structural repairs, building renovation, lift replacement, or unforeseen structural emergencies. Unlike the repair fund, this cannot be used for routine maintenance.
Minimum 0.25% of construction cost per annum per flat (Bye-Law 13)
Water Charges
Covers the society's water bill from the municipal authority. Many societies charge this equally per flat. Societies with individual water meters charge based on actual consumption.
Equal split per flat, or meter-based where sub-meters are installed
Common Area Electricity
Lighting for staircases, corridors, parking areas, and common facilities. This is separate from each flat's own electricity connection with the distribution company.
Equal split per flat, or proportional to flat area
Insurance Premium
Maharashtra law requires housing societies to insure the building structure. The premium is shared among all members. This covers the common building only — contents and interiors of individual flats are not covered.
Equal split among all flats
Non-Occupancy Charges
An additional charge on flats that are rented out or left vacant — i.e., not occupied by the owner. The Supreme Court (in the 2021 ruling) capped this at 10% of the service charges component only, not the total maintenance bill.
10% of service charges — applies only to non-owner-occupied flats
Parking Charges
Societies with designated parking spaces may levy a monthly parking charge per vehicle. The rate is decided by the general body at the AGM. Open parking and closed garage charges may differ.
Fixed amount per parking space, decided at AGM
A Note on the Sinking Fund
The sinking fund is frequently misunderstood and misused. Under Model Bye-Laws 2014, it is a capital reserve — it can only be used for major structural repairs, renovation, or reconstruction. It cannot be used to fund day-to-day operational shortfalls or to pay staff salaries.
Withdrawals from the sinking fund require approval at the general body meeting. Societies that routinely dip into the sinking fund for routine expenses are exposing their committee members to personal liability for misappropriation of funds.
Non-Occupancy Charges: The Most Disputed Component
Many societies have been calculating non-occupancy charges incorrectly — charging 10% of the total maintenance bill rather than 10% of the service charges component only.
Example: If your total maintenance bill is ₹5,000 and service charges account for ₹2,000 of that, the non-occupancy charge is ₹200 (10% of ₹2,000) — not ₹500 (10% of ₹5,000). If your society is charging the higher amount, you can raise this at the next AGM and request a correction with retrospective adjustment.
How the Annual Budget Determines Your Bill
Each year, the managing committee prepares a budget for the coming financial year (April to March). This budget is presented at the AGM and must be approved by the general body. Once approved, the monthly maintenance figure is derived by dividing the annual budget by 12 and allocating costs across all flats according to the agreed method (equal share, per sq ft, or a hybrid).
The committee cannot charge more than what the approved budget permits without a fresh general body resolution. Members who believe they are being overcharged can demand to see the approved budget and the actual expenditure accounts — this is their legal right under the MCS Act.
Audited accounts must be presented at every AGM. If the society has not had its accounts audited, or if the accounts are not placed before the general body, this is a statutory default that members can report to the Registrar of Co-operative Societies.
Frequently Asked Questions
QCan the society charge maintenance per square foot?
Yes. Many societies allocate service charges and repair fund contributions proportionally by the built-up or carpet area of each flat. This is legally permissible under Model Bye-Laws 2014 and is considered equitable for societies where flat sizes vary significantly.
QWhat is the maximum non-occupancy charge?
The Supreme Court of India ruled in 2021 that non-occupancy charges cannot exceed 10% of the service charges component. Societies that were charging 10% of the total maintenance (including sinking fund, water, electricity) must revise their calculations — the 10% cap applies to service charges only.
QCan a society revise maintenance charges mid-year without an AGM?
No. Maintenance charges can only be revised at the Annual General Meeting, where the budget is approved by the general body. The managing committee cannot unilaterally increase charges outside this process. Emergency situations may allow an SGM for out-of-cycle revisions.
QWhat happens to unpaid maintenance?
Unpaid maintenance accumulates as arrears and attracts simple interest at the rate decided at the AGM (typically 21% per annum). After formal demand, the society can file a recovery application before the Co-operative Court under Section 91 of the MCS Act. Persistent defaulters may also be denied NOC for flat transfer.
QIs the sinking fund contribution mandatory even for new buildings?
Yes. Bye-Law 13 requires all societies to maintain a sinking fund irrespective of the building's age. The minimum contribution is 0.25% of the construction cost per flat per annum, though the AGM may approve a higher contribution rate.
Your Rights as a Member
- Right to inspect accounts, vouchers, and receipts at the society office
- Right to a copy of the approved budget on request
- Right to raise objections to the maintenance bill at the AGM
- Right to a detailed breakdown of how your bill is calculated
- Right to challenge overcharging before the Co-operative Court (Section 91 MCS Act)
Need help setting up your society's maintenance budget?
We prepare compliant budgets, maintenance demand letters, and annual accounts for CHS across Thane, Mumbai, and Navi Mumbai.