RERA & Maintenance Charges: Legal Framework and Judicial Perspective

Maintenance Charges and RERA: Legal Framework, Responsibilities, and Judicial Perspective

The importance of Common Area Maintenance (CAM) has further intensified with the changing expectations of residents, particularly in modern group housing where the demand for basic to luxury living standards and lifestyle amenities is steadily rising.

Today’s residential communities are no longer limited to basic infrastructure like water, electricity, sanitation, safety, security but they resemble integrated ecosystems offering clubhouses, gyms, swimming pools, co-working spaces, landscaped zones, continuous engagement of residents through Community events and concierge-like services. Each of these elements increases both the complexity and cost of maintenance, making a well-structured CAM framework indispensable.

An equally significant dimension is the growing inclusion of pets within residential societies. Pet-friendly living introduces additional considerations such as designated walking areas, waste disposal systems, hygiene protocols, and conflict management among residents. Without clear policies and proper maintenance support, these aspects can become points of friction within the community.

Accordingly, CAM must evolve beyond routine upkeep into a comprehensive management system  that balances:

1. Enhanced service delivery for luxury amenities

2. Structured guidelines for pet ownership and usage of common areas

3. Cleanliness, hygiene, and safety standards

4. Fair and transparent cost-sharing mechanisms

5. Clear and we’ll defined conflict management system

6. Continuous upgrade of the system and facilities

7. Continuous training and upskilling of Management Committee members and the volunteers in the community

Well-defined CAM policies, supported by RWA bye-laws or maintenance agreements, help ensure that the aspirations of residents whether for basic, premium facilities or inclusive pet-friendly environment are met without compromising discipline, sustainability, and harmonious coexistence.

The introduction of the Real Estate (Regulation and Development) Act, 2016 (RERA) made a significant shift in regulating the real estate sector in India. One of the critical aspects governed under the Act is the payment and management of maintenance charges, ensuring transparency, fairness, and accountability between promoters and allottees.

References to the provisions of Real Estate (Regulation and Development) Act, 2016 

Section 11 of the Real Estate (Regulation and Development) Act, 2016 lays down the core functions and duties of the promoter, establishing a framework to ensure transparency, accountability, and protection of homebuyers/allottees interests.

Under Section 11(4)(d) of Real Estate (Regulation and development) Act 2016 the promoter shall be responsible for providing and maintaining the essential services, on reasonable charges, till the taking over of the maintenance of the project by the association of the allottees

Under Section 11(4)(g) the promoter shall pay all outgoings until he transfers the physical possession of the real estate project to the allottee or the associations of allottees, as the case may be, which he has collected from the allottees, for the payment of outgoings (including land cost, ground rent, municipal or other local taxes, charges for water or electricity, maintenance charges, including mortgage loan and interest on mortgages or other encumbrances and such other liabilities payable to competent authorities, banks and financial institutions, which are related to the project)

Provided that where any promoter fails to pay all or any of the outgoings collected by him from the allottees or any liability, mortgage loan and interest thereon before transferring the real estate project to such allottees, or the association of the allottees, as the case may be, the promoter shall continue to be liable, even after the transfer of the property, to pay such outgoings and penal charges, if any, to the authority or person to whom they are payable and be liable for the cost of any legal proceedings which may be taken therefor by such authority or person

In addition to the obligations imposed on promoters under Section 11, Section 19 of the Real Estate (Regulation and Development) Act, 2016 clearly articulates the rights and duties of allottees, thereby creating a balanced regulatory framework governing real estate transactions.

Under Section 19 (6) Every allottee, who has entered into an agreement for sale to take an apartment, plot or building as the case may be, under section 13, shall be responsible to make necessary payments in the manner and within the time as specified in the said agreement for sale and shall pay at the proper time and place, the share of the registration charges, municipal taxes, water and electricity charges, maintenance charges, ground rent, and other charges, if any. And Under Section 19 (7) The allottee shall be liable to pay interest, at such rate as may be prescribed, for any delay in payment towards any amount or charges to be paid under sub-section (6)

Analytical Interpretation of the Aforesaid Provisions in Consonance with the Real Estate (Regulation and Development) Act, 2016

A careful reading of the provisions of the Real Estate (Regulation and Development) Act, 2016 clearly delineates the phased transition of maintenance responsibility from the promoter to the association of allottees.

In the initial stage, as per Section 11(4)(d), the promoter is obligated to provide and maintain essential services on reasonable charges until such time as the maintenance is formally handed over. During this period, the promoter retains operational control while recovering proportionate maintenance costs from the allottees.

Subsequently, in accordance with Section 17, the promoter is required to transfer the common areas and hand over the maintenance responsibilities to the Association of Allottees (AOA) within the prescribed timeline. This marks the transition from a developer driven maintenance structure to a collective, owners / allottees managed framework.

Further, Section 19(6) reinforces that allottees are legally bound to contribute towards maintenance charges, ensuring the financial sustainability of such services post-handover.

Accordingly, the Act establishes a structured and seamless transition mechanism

Given that Management Committees of RWAs typically change year on year, leading to challenges in continuity and often resulting in a trial-and-error approach to governance, it becomes imperative for professionals such as Chartered Accountants to play a proactive advisory role. A sound understanding of Common Area Maintenance (CAM) concept, financial planning, compliance requirements, and governance structures enables them to guide RWAs toward consistency, transparency, and operational efficiency. CAs involvement helps institutionalize processes, standardize practices, and ensure smoother transitions between committees, thereby minimizing disruptions and strengthening the long-term sustainability of community management.

The question arise, from when the CAM is liable to collected by the promoter and payable by the allottees. Various courts have pronounced various Judgements based on the facts of the cases, however revent judgement is worth reading.

Judicial Ruling References

I. Punjab RERA Ruling on Maintenance Charges –

A recent and significant ruling by the Punjab Real Estate Regulatory Authority (RERA), under the chairmanship of Rakesh Kumar Goyal, in the case of Arvind Nagar Residential Welfare Society v. Pawan Goods Merchants Co. Ltd., provides critical judicial clarity on the issue of maintenance charges.

In this case, the allottees had taken possession of their plots, constructed residential units, and were actively utilising essential services such as water supply, electricity, roads, and sewerage infrastructure. However, they contested the levy of maintenance charges on the ground that the project had not obtained an Completion Certificate. The Authority, while rejecting the contention of the allottees was categorically observed that delay in obtaining an Occupancy Certificate does not grant a license to avoid payment of maintenance charges, particularly where the allottees have taken possession and are deriving benefit from common facilities

Further, the Authority clarified that –

1. The promoter’s obligation to maintain the project under Section 11(4)(d) cannot be interpreted to mean indefinite free maintenance once the units are occupied.

2. Upon occupation, the responsibility must transition to the association of allottees in line with Section 17 of the Act

II. MahaRERA Ruling on Maintenance Charges

A recent order by the Maharashtra Real Estate Regulatory Authority dated 9 April 2026 in the case of Mahindra Happinest Developers Limited vs. Kanica Uday Rangnekar & Ors. reiterates this principle with clarity.

The complaints were filed by the promoter seeking recovery of outstanding Common Area Maintenance (CAM) charges from two allottees in the project “Mahindra Happiest Palghar Phase I.” The allottees had entered into agreements for sale in 2018 and were offered possession in December 2020, which was subsequently handed over in early 2021.

As per the contractual terms, the allottees were liable to pay all outgoings, including maintenance charges, within a stipulated time from the date of offer of possession. The promoter had initially adjusted advance maintenance contributions up to December 2021. However, for the subsequent period from January 2022 to September 2024, the allottees failed to pay the CAM charges despite repeated follow-ups and issuance of a final demand notice.

MahaRERA observed that:

1. Possession of the units had already been offered and handed over to the allottees.

2. The agreements for sale clearly stipulated the liability of the allottees to pay maintenance charges from the date of possession (or offer of possession), irrespective of actual occupancy.

3. The promoter had substantiated its claim through documentary evidence, including demand notices and communication records.

4. The allottees failed to contest the claims or appear before the Authority.

Based on these findings, the Authority concluded that the allottees were in violation of their statutory obligations under Section 19(6) of RERA.

Further, invoking its powers under Section 34(f) of the Act, which mandates the Authority to ensure compliance with obligations of all stakeholders, MahaRERA emphasized that enforcement is not limited to promoters but extends equally to allottees.

The Authority allowed the complaints and directed the allottees to:

1. Pay the outstanding CAM charges along with applicable interest within 30 days.

2. Continue to bear interest liability until the date of actual realization.

Additionally, the promoter was granted liberty to initiate appropriate recovery proceedings in case of non-compliance. All other reliefs were rejected, and no order as to costs was passed.

Conclusion

The Real Estate (Regulation and Development) Act, 2016 establishes a clear and balanced legal framework governing maintenance charges by delineating the responsibilities of both promoters and allottees. While promoters are obligated to provide and maintain essential services until the formal handover to the association of allottees, the Act equally mandates that allottees contribute their proportionate share of maintenance and other outgoings in a timely manner.

A combined reading of Sections 11, 17, and 19 reflects a structured transition of responsibility from promoter led maintenance to a collective, resident-driven management system. This transition is not merely procedural but is supported by enforceable statutory obligations designed to ensure continuity of services and financial sustainability of the project.

Judicial pronouncements by authorities such as Maharashtra Real Estate Regulatory Authority and the Punjab RERA further reinforce that maintenance charges are a binding obligation and cannot be avoided on technical or procedural grounds, particularly once possession is offered or the benefits of the project are being enjoyed. The consistent position emerging from these rulings is that occupation or entitlement to possession triggers financial responsibility.

In essence, RERA does not merely protect homebuyers it promotes accountability across all stakeholders. The obligation to pay maintenance charges is not discretionary but a statutory duty, integral to the efficient functioning and long-term sustainability of real estate projects. Compliance with these provisions is therefore essential to uphold the spirit of transparency, fairness, and discipline envisioned under the Act.

The article written by CA. Vinay Thyagaraj and CA. Deena Davis from Venu and Vinay Chartered Accountants.