Demand for additional maintenance from the builder

Rohit Telang (Querist) 17 September 2023 This query is : Resolved
I took possession of a flat in a township in Pune in 2018 after paying all the dues including advance maintenance as demanded by the builder.Before taking possession I was given a No Dues pending letter from the builder.After 2 years the society was formed.After this the builder started demanding Additional maintenance for the 2 years and started sending legal notices in his letterhead threatening legal action against us.My question is has the builder got a right to demand such additional maintenace after giving No Dues pending letter and after paying in advance 2 years maintenance? What are the remedies for us if he proceeds with legal action?

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Quick Summary

If your builder is demanding additional maintenance fees for a period you've already paid for and received a 'no dues' certificate, you likely don't need to pay. Once a society is formed and maintenance is handed over, the builder's right to charge typically ends. You have the right to scrutinise the builder's maintenance expenses and can complain to RERA if the builder violates the Real Estate (Regulation and Development) Act, 2016, especially concerning essential services and outgoings before possession transfer.

kavksatyanarayana (Expert) 17 September 2023
Has the builder asked the other flat owners for extra maintenance? You ascertain information from other owners and complain to the RERA. As stated facts, you need not pay the extra maintenance. And file a case against him if necessary.

T. Kalaiselvan, Advocate (Expert) 18 September 2023
The demand for maintenance amount can be made b y builder if he is incurring the expenses for maintenance.
Once the society's Resident Welfare Association (RWA) is formed, and the maintenance work is handed over to it, the builder can no longer charge for maintenance. RWA can then devise its own set of rules for maintenance charges.

Maintenance charges involve a contractual element between the buyer and the developer. It is included in the allotment letter, initially issued to the buyer after he has paid the booking amount.
As a resident paying maintenance charges, you can look at the actual amount spent by the builder on maintenance, along with the break-up.

"It is the residents' right to be aware of the amount spent by the builder on maintenance. Till a society is formed, a builder pays for the maintenance and has to keep his books open for scrutiny by the residents."

P. Venu (Expert) 30 September 2023
Whether the builder is justified is a question of fact than that of law. The crucial issue is whether he has really incurred any expenditure after the issue of "No Due Certificate"?

Rajesh Tandon (Expert) 30 November 2023
Dear Querist,

In connection with your query, it is very important to first understand the provisions of the law in the matter of maintenance and related provisions.

Your kind attention drawn to the provisions of Real Estate (Regulation and Development) Act, 2016 [RERA].

Sec 11 under Chapter III of the act deals with functions and duties of Promoter. Further sec 11(4)(d) mandates that promoter 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 allottees.

Further vide Sec 11(4) (g), of the act, mandates a responsibility on promoter to 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.

Vide Sec Para 11(4) (b) , of the act, a Promoter is responsible to obtain the completion certificate or the occupancy certificate, or both, as applicable, from the relevant competent authority as per local laws or other laws for the time being in force and to make it available to the allottees individually or to the association of allottees, as the case may be.

Vide Sec Para 19(10) , of the act, every allottee is required to take physical possession of the apartment, plot or building as the case may be, within a period of two months of the occupancy certificate issued for the said apartment, plot or building, as the case may be.

In the facts disclosed by you, it is not clearly emerging as to whether builder took the occupancy certificate or not. If the printed to the occupancy certificate, on what date and in which year?

Your kind attention is drawn to the directions given by National Consumer Disputes Redressal Commission (NCDRC) in the Judgement in the case of Madhu sudan Reddy R & J Shanthamma & Ors V VDB Whitefield Development Private Limited in consumer complaint number 763 of 2020 dated 25.01.2022. The Honourable Forum vide Para 27(3) has directed the opposite parties, not to collect any maintenance charge till the receipt of Occupancy certificate. The advance maintenance charge as given in clause 14.5 of the Construction Agreement and any other maintenance charge so far collected should be adjusted towards the maintenance charge to be paid by the complainants post receipt of occupancy certificate.

As such If you have paid the 2 years maintenance in advance and have obtained a no dues certificate, then the builder has no legal right to ask for an additional amount. It's safe to ignore the notice but I would recommend that you seek an explanation of the grounds on which the additional fees are being demanded. Moreover, if the builder takes any steps to harass you into paying the amount, then you can file a complaint before the RERA under section 31 of the RERA for violation of contravention of the provisions of the act as vide Sec 11(4) (g), of the act, responsibility of promoter to pay all outgoings is only till he transfers the physical possession of the real estate project to the allottee or the associations of allottees

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