Supreme Court’s Landmark Ruling Reshapes Maintenance Charge Policies for Housing Societies

Published: 21 Nov 2025

Maintenance charges in housing societies have become a point of heated debate among homeowners and developers across India. The issue has gained national attention following a Supreme Court judgment on society maintenance charges, which has set new standards for transparency, fairness, and accountability in how these fees are collected and used.

This landmark ruling is expected to significantly reshape how Resident Welfare Associations, apartment complexes, and gated communities manage their finances. In this blog, we break down what the judgment means, how it impacts housing societies and apartments, what the RERA rules for maintenance charges say, and the practical takeaways for both residents and builders.

What Are Maintenance Charges in Housing Societies?

Maintenance charges are recurring fees collected from homeowners to manage and maintain shared spaces and common facilities within a housing complex. These funds cover essential services such as:

• Cleaning of common areas
• Security and surveillance
• Lift maintenance
• Garden and landscape upkeep
• Water and electricity in common areas
• Repairs to shared infrastructure

In multi-unit residential developments, including apartments, gated communities, and plotted societies, all homeowners are required to contribute to these expenses, even if the property is unoccupied. The Supreme Court judgement on apartment maintenance charges reiterates this decision that every owner bears equal responsibility for the upkeep of shared facilities, ensuring collective benefit for all residents.

Typically, maintenance charges are calculated using one of three methods: per-square-foot rate, equal division per unit, or a hybrid model that combines both. This framework ensures that contributions are proportionate to ownership size or the agreed community rules.

The Supreme Court’s Frame-Shifting Ruling

According to the Supreme Court ruling on society maintenance charges, the fees must be reasonable, transparent, and mutually agreed upon. Builders are not allowed to arbitrarily impose or change these fees after the buyer agreement is signed.

The judgment specifies that maintenance charges should be clearly outlined in the sale agreement. Until a Resident Welfare Association (RWA) is formed, the builder is responsible for maintenance, and any fees collected must be used solely for the management of common facilities.

This landmark decision upholds the homeowners' interests and rights by holding developers accountable. It also extends to apartment communities, ensuring that completed and under-construction projects follow a uniform, buyer-friendly structure. By enforcing clarity in maintenance agreements, the judgment helps homeowners anticipate costs, demand transparency, and avoid disputes over arbitrary or inflated charges.

RERA Rules and Society Maintenance Charges

The Real Estate Regulatory Authority (RERA) also plays a key role in defining fair housing practices. RERA rules for society maintenance charges mandate the following:

Advance Maintenance Should Be Limited

Builders are allowed to collect maintenance charges in advance, but only for a maximum of one year's worth. This collection is permitted only until the Residents’ Welfare Association (RWA) takes over.

Complete Transparency

According to RERA, developers must provide flat owners with a detailed breakdown of the maintenance fees, including the frequency of charges and how the collected amounts are utilised.

No Profit-Making

Maintenance charges are intended solely for operational and management expenses. Developers are not permitted to use these fees for profit in any form.

Separate Maintenance Account

Developers are required to maintain a separate account for the deposited maintenance charges. This account should be open to auditing and review by the residents.

The RERA rules for society maintenance charges safeguard the interests of the flat owner by providing a clear, traceable system for how maintenance funds are collected, managed, and utilised. They apply equally to under-construction projects (where the builder manages maintenance) and completed societies (where the RWA takes charge).

What This Means for Societies and Flat Owners: Rules & Practical Impact

Following the Supreme Court judgment, every housing society must revise its society maintenance charges rules to align with both legal and regulatory standards. Societies must revise their bylaws to ensure:

• Transparency: All collections are deposited in a dedicated, auditable account.
• Defined Timelines: Due dates, late-payment penalties, and annual audits are clearly communicated.
• Access to Records: Residents can review expense statements and maintenance budgets.
• Voting Rights: Only members who have cleared dues can vote on society matters.

Understanding Calculation Methods

1. Per-Square-Foot Method

In this approach, the maintenance fee is calculated based on the size of each unit. Larger apartments or villas pay more because they are considered to occupy and benefit from proportionally more shared resources.

Under new rules: Societies must disclose how the per-square-foot rate is derived and ensure no hidden or arbitrary costs are added.

2. Equal Division Method

Under this method, every flat owner pays the same fixed amount, regardless of unit size.

Under new rules: Must be approved by a majority of residents and documented in society bylaws to avoid disputes.

3. Hybrid Method

This combines elements of both models: a base fixed charge for all residents and a variable component based on the unit’s square footage.

Under new rules: The formula must be explained clearly in the society’s policy and reflected in maintenance invoices for full transparency.

By standardising these calculation models, the society maintenance charges rules promote fairness and help prevent disagreements over payment obligations.

Resident Rights Under the New Guidelines

Residents now have the right to:

• Review maintenance fund usage and audited statements.
• Ask for itemised breakdowns of expenses.
• Expect fair, pre-declared penalties for late payments.
• Participate in decisions if dues are up to date.

Quick Checklist for Flat Owners

• Confirm maintenance charges and duration in your sale agreement.
• Ensure your society has a transparent maintenance account.
• Ask how your charges are calculated and reviewed.
• Buyers of under-construction projects should check RERA compliance.
• Societies must update their bylaws to reflect the Supreme Court and RERA rules.

Additional Consideration: GST and Other Cost Implications

In addition to the judicial and regulatory aspects, cost implications are also significant. One major implication is that if maintenance charges exceed a certain threshold, Goods and Services Tax (GST) may be applicable. According to current regulations:

• If monthly maintenance charges exceed ₹7,500 per flat, an 18% GST applies.
• Societies with an annual turnover above ₹20 lakh are required to register for GST and comply with its regulations.
• If the maintenance charge is ₹7,500 or less, GST does not apply.

The Final Word

The Supreme Court judgment on society maintenance charges has reshaped the financial and operational landscape for housing societies across India. It ensures that homeowners pay only what is fair, that developers maintain transparency, and that funds are used solely for maintaining shared amenities.

Backed by RERA rules for maintenance charges, this judgment provides residents with stronger protection and a legal framework to demand accountability. For both developers and RWAs, it sets a clear precedent for fair governance and ethical fund management.

In this changing landscape, trusted developers such as Shriram Properties continue to uphold transparency, timely delivery, and clear financial practices across their projects. These values align with the principles reinforced by this Supreme Court ruling.

Ultimately, being informed is the best safeguard. Whether you’re a buyer, resident, or society member, understanding the society maintenance charges rules empowers you to make confident decisions, ensure transparency, and protect your investment.

FAQs

1. What did the Supreme Court rule on apartment maintenance charges under the Supreme Court judgement on apartment maintenance charges?

The Supreme Court clarified that maintenance fees must be clearly defined in the sale agreement and cannot be arbitrarily increased by the builder. It also ruled that all flat owners, whether they occupy the unit or not, are equally responsible for contributing to the upkeep of shared amenities and common areas.

2. How do the RERA rules for maintenance charges affect new housing societies?

Under the RERA rules for maintenance charges, builders can collect maintenance fees in advance only up to a limited period, typically until the Resident Welfare Association (RWA) is formed. They must provide a detailed breakdown of expenses, maintain a separate maintenance account, and cannot treat these collections as a profit-making activity.

3. What are the society maintenance charges rules that existing societies must follow following this ruling?

The updated society maintenance charges rules require housing societies to adopt transparent calculation methods, whether per square foot, equal division, or hybrid. Societies must maintain annual budgets and audits, clearly define due dates and penalties for delays, and ensure funds are used solely for common maintenance purposes, not diverted elsewhere.

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