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Q.

Can builder charge maintenance without OC?

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Recently, I asked this question to my lawyer brother: can builder charge maintenance without OC? He said a builder cannot legally charge maintenance fees without getting the Occupancy Certificate from the local civic authority. The OC confirms the building fully complies with all relevant laws, such as building codes, safety standards, and availability of utilities. It then only makes it fit for legal occupation.

Can Builder Ask for Maintenance without OC?

No. The National Consumer Disputes Redressal Commission (NCDRC) has repeatedly held that levying maintenance charges before obtaining the OC is a deficiency of service. Also, buyers only become liable for maintenance charges after the OC is issued.

  • In the landmark case Madhusudan Reddy & Ors. v. VDB Whitefield Development Pvt. Ltd., the NCDRC emphasized that even if homeowners take physical possession of flats before an OC is granted, this amounts to “paper possession,” and no maintenance charges should be collected until the OC is in place.

  • State-level forums echo this principle. For example, Mohali’s State Consumer Forum ordered a builder to cease collecting maintenance fees until a full OC was obtained.

If you’ve taken possession of a flat but the builder has not secured the OC, you are not obliged to pay maintenance charges until the certificate is issued. 

Contact NoBroker Lawyers and Get Your Property Related Issues Resolved.

A property owner in residential properties is required to pay monthly maintenance fees. Your personal finances can be significantly impacted by the monthly expense for maintenance fees. And I have heard some cases of builders asking for maintenance fees without getting an occupation certificate. As soon as I saw your question, I thought of guiding you about can builder charge maintenance without OC.

Get answers to all your property queries from the experts at NoBroker here.

Can a builder charge maintenance without OC?

Builders cannot request maintenance fees for residential development for which they do not have an occupancy certificate. This is stated by the National Consumer Disputes Redressal Commission. According to a recent decision by the apex consumer body, homeowners cannot be mandated to pay monthly maintenance fees. These are who were required to take possession of their properties in postponed residences. It is without receiving an OC from the relevant municipal authority.

Builders are not authorised to seek maintenance fees from consumers before the builder receives an occupancy certificate from the local government. It is decided by the highest consumer court even if the flat purchasers begin living in their apartments after taking possession. It was stated that if the builder does not receive OC, the construction is not yet finished and the handover of the apartment to the buyers will only be regarded as "paper ownership."

Are maintenance fees refundable?

We all know common area maintenance (CAM) fees are required to keep the property in excellent condition. Builders can come up with strategies in the event of unexpected changes. In rare situations, maintenance charge cancellations for residential projects may be implemented for a predetermined amount of time. This strategy was implemented by numerous housing societies during the Coronavirus outbreak.

Builder is unable to send earnings or maintenance fees from beneficiaries to his account of the company. Because maintenance fees are not in any way considered to be part of the builder's income. The builder must open a different bank account so that homeowners' contributions can be transferred there.

Can builder charge maintenance without OC must be clear to you now.

Read More: Is GST applicable on maintenance charges collected by builders? How to pay society maintenance bill online? Is society members not paying maintenance?