Bombay HC Rules Maintenance Charges Must Be Proportionate to Apartment Size

The Bombay High Court in Writ Petition No. 9179 of 2022 (Sachin Malpani vs Nilam Patil & Ors.) delivered a significant ruling on maintenance charges for common areas under the Maharashtra Apartment Ownership Act, 1970 (MAO Act), impacting condominiums across Maharashtra. The judgment clarifies whether maintenance charges should be levied equally on all members or proportionate to the undivided share of their apartment.

Background of the Case

The case arose from a dispute in a condominium where the General Body had resolved to levy equal maintenance charges on all apartment owners, regardless of apartment size, while contributions to the sinking fund varied as per undivided share.

• Petitioners’ Argument: Maintenance charges should be equal for all apartments, as larger flats do not receive extra benefits.

• Deputy Registrar’s Order (08 July 2021): Directed the condominium to levy maintenance charges proportionate to undivided share as per Section 10 of the MAO Act.

• Co-operative Court, Pune: Rejected the challenge against the Deputy Registrar’s order.

The Petitioners escalated the matter to the Bombay High Court, challenging the proportional charging mechanism.

Key Provisions of MAO Act Referenced

• Section 6(1): Each apartment owner has undivided interest in common areas based on apartment value vs total property value, which is permanent and inseparable from the apartment.

• Section 10: Common expenses must be charged to apartment owners in proportion to their undivided interest, and common profits distributed the same way.

The Deed of Declaration, which forms the legal basis for the condominium, also granted voting rights proportionate to apartment area, aligning with the MAO Act’s intent.

Bombay High Court’s Observations and Ruling

1. Maintenance Charges Must Be Proportionate:

   • Owners of larger apartments must contribute more to common area maintenance, as undivided interest runs with the apartment.

   • Equal charging resolutions cannot override statutory provisions of the MAO Act.

2. Past Inequality Cannot Continue:

   • Petitioners had benefited from equal charges earlier.

   • They cannot now resist implementation of the MAO Act.

3. Deed of Declaration is Binding:

   • Maintenance and voting rights are linked to proportionate area/value.

   • Any contrary resolution does not override statutory rights and obligations.

4. Rejection of Petitioners’ Argument:

   • Claim that larger flats don’t get extra benefit was dismissed.

   • Common expenses must follow undivided share to ensure fairness and legality.

5. Distinction Between MOFA and MAO Act:

   • The Court highlighted a clear difference between Maharashtra Ownership Flats Act (MOFA), 1963 and MAO Act, 1970, especially in levy of maintenance charges.

Impact of the Judgment

This ruling provides clarity for condominiums and apartment owners in Maharashtra:

• Common area expenses must be levied proportionately to undivided interest, not equally.

• Deed of Declaration is enforceable, and past informal practices cannot override the law.

• Future disputes on maintenance charges are likely to be resolved in line with this precedent.

The decision ensures legal compliance, financial equity among apartment owners, and upholds the statutory intent of the MAO Act.