Maintenance Payments As per Society By-Laws - Part 2
Maintenance Payments As per Society By-Laws - Part 2
Date:16 May 2020
Maintenance Payments As per Society By-Laws - Part 2

In our previous blog, we discussed how maintenance payments are calculated. Today, we will make you aware of the expenses included and excluded from the maintenance payments.

 Included Expenditure

 All the common bills of your society are paid using the Maintenance Payments like Service Provider Bills, Housekeeping & Security Staff Salary, Water & Electricity Bill, Motor Bill, etc.

 Building Repair Fund (BRF): A mandatory fund towards all the major or minute repairs your society needs. For example, water pipeline repair, painting your society etc. BRF is calculated and created using the Maintenance Fee only.

 Let’s see how, if Maintenance of your society is 2 Crores of which 1.5 Crores has been utilized, the remaining 50 Lakhs will be called profit of the society. From this 50 Lakhs, 25 % has to be the Reserve Fund which leaves us with 37.5 Lakhs and that is the amount of BRF of your society.

 Funds provided to Chairman & Treasurer: Chairman and Treasurer are assured with Rs.5000 from the Maintenance Payment to spend on society's expenses without any acknowledgment. Once the amount of Rs.5000 has been utilized and the Treasurer or the Chairman if in need of more funds for the society expenses, they can ask for further Rs.5000 but not more.  

 Apart from the maintenance, your society incurs extra expenses for special occasions organized in the society. These extra expenditures cannot be incurred using maintenance funds as per the guidelines of MOFA (Maharashtra Ownership of Flats Act). Hence, a TRUST account is needed for each special occasion held in your society and you have to pay beyond the maintenance payment.

 Excluded Expenditure


 For expenditures that are not allowed from the Maintenance Payment such as organizing a cultural event, setting up a small food fair, etc then the special committees (like cultural committees) of the society must form a TRUST fund. Only from these TRUST funds, are societies allowed to spend money for the extracurricular activities held, otherwise society must pay a heavy tax on the expenditure done using the Maintenance Payment account.

For instance:

  1. Organizing a cultural event, society must create a TRUST fund for the Cultural Event
  2. For organizing marathons, society must create a TRUST fund for the Marathon Event
  3. For setting a check-up camp, society must create a TRUST fund for the Health Event

 All the specific expenditures that are not included in Maintenance Payment needs its own TRUST fund account.

 By now you must have understood that your payments are used for maintaining the health of your society. Your funds provide you the facilities and amenities in your society that allow you to live your life worry-free. The management committee takes care of all your year-long issues using the funds of maintenance payments.

 You can keep track of your funds being invested into society’s expenses using ezeeServe. Book a 90-day free trial.