By Arosh John | Founder – John Real Estate (MahaRERA Reg. No. A51700001835) | Editor-in-Chief – Thane Real Estate News
The Challenge
Understanding FCAM Charges: A Key to Financial Control
In large township projects, developers often collect Federation/Common Area Maintenance (FCAM) charges before the federation (apex body) is formed. This practice, while ensuring the maintenance of township-level services like roads, security, and landscaping, can create issues when residents are billed without itemised heads, audited accounts, or clarity on how funds are spent. By understanding these charges, residents can assert their rights and ensure transparency in their financial responsibilities.
Advance Federation Charges: What Buyers Often Miss
- Collected upfront: Many developers collect advance FCAM for 1–5 years at the time of sale or possession.
- Provisional in nature: Agreements for Sale typically describe this as “provisional” or “subject to revision.” Buyers often overlook this fine print.
- Reality check:
- The advance is only an estimate of future costs.
- Once it runs out, the developer can raise fresh FCAM bills.
- Disputes arise when:
- Residents assumed the advance covered all costs until the federation handover.
- No audited report is shared on how the advance was used.
- Fresh bills are higher, with no supporting breakdown.
Legal Provisions You Can Rely On
- RERA Act, 2016, Section 11(4)(d): The promoter must provide and maintain essential services on reasonable charges until the association/federation of allottees takes over.
- MHRD Act, 2012, Section 18(3): The Apex Body/Federation is legally recognised to maintain layout-level amenities once formed.
- MahaRERA Order No. 57/2024 (30 July 2024): Promoters must disclose all building-level and layout-level amenities in the Agreement for Sale and specify proposed handover dates.
What Residents Can Do Before Handover
1. Demand itemised accounts
Request itemised FCAM heads (security, landscaping, utilities, staff costs), vendor contracts, and unspent balances.
2. Check MahaRERA project filings
Agreements signed after July 2024 must include amenity lists and handover dates. Review your project’s registration page for annexures.
3. Insist on the utilisation of advance
While continuing to pay FCAM bills to avoid interest and penalties, residents should demand audited statements of how the advance FCAM (collected upfront) has been utilised. Bills must be paid to remain compliant, but transparency can still be pursued in parallel.
4. Form a joint residents’ committee
Societies in the township can form a residents’ group to make collective representations. This adds weight with the developer, Registrar, or MahaRERA.
5. Regulatory escalation
- Approach the Deputy Registrar of Co-operative Societies for directions on disclosure or audit.
- File a MahaRERA complaint if charges lack transparency, citing Order 57/2024 for new agreements or Section 11(4)(d) for older ones.
If the Developer Refuses Disclosure
If written demands for itemised accounts are ignored:
- Deputy Registrar: Societies can approach the Deputy Registrar of Co-operative Societies, empowered under the MCS Act, 1960, to direct promoters/societies to maintain proper accounts.
- MahaRERA: File a complaint under RERA Act, 2016, Sec. 11(4)(d), arguing that charges cannot be “reasonable” without supporting accounts. For newer agreements, invoke Order 57/2024.
- Consumer Forum: Residents may approach the Consumer Commission for deficiency in service or unfair trade practice.
- Civil Remedies: As a last resort, residents can seek accounting through civil courts (slower, but possible).
Collective Action: The Key to Effective Response
Developers usually respond when residents act collectively. A joint representation signed by multiple societies or large groups of members carries far more weight than individual complaints. By uniting and demanding transparency in writing, residents can significantly increase their bargaining power and the likelihood of a response from the developer.
Why Collective Action Matters
Your actions as a collective can significantly influence developers’ responses and how regulators perceive the situation, making you a stronger voice in the process.
About the Author
Arosh John is a recognised Thane real estate expert, Founder of John Real Estate (MahaRERA Reg. No. A51700001835), and Editor-in-Chief of Thane Real Estate News. With over 10 years of market expertise, he advises on resale, new purchases, and NRI investments, bringing clarity to complex township and regulatory issues for Thane’s residents.
Consultation
Looking to buy, sell, or invest in Thane real estate? Schedule a consultation with Arosh John for structured guidance on resale strategy, new purchases, and investment opportunities.
Disclaimer
This article is based on the RERA Act, 2016, the Maharashtra Housing (Regulation and Development) Act, 2012, and MahaRERA Order 57/2024. It is for general educational purposes only.
- Agreements executed before July 2024 may lack handover dates; residents should rely on project registration documents and collective representation.
- Agreements executed after July 2024 must include amenity lists and proposed handover dates.
- Advance FCAM collections are usually provisional and subject to revision, and utilisation should be accounted for transparently.
- Non-payment of bills can lead to penalties, interest, or legal recovery. Residents should pay charges on time while pursuing transparency through lawful remedies.
Regulatory interpretations may evolve through notifications or judicial rulings. Residents should consult legal and financial experts before initiating any action. Neither the author nor Thane Real Estate News accepts liability for decisions taken solely on the basis of this article.
FAQ for FCAM Transparency Before Handover
Q1. What is FCAM in Maharashtra townships?
FCAM stands for Federation/Common Area Maintenance, a charge collected to maintain layout-level amenities like internal roads, gates, security, STP/WTP, and landscaping until the federation (apex body) takes over.
Q2. Why do developers collect advance FCAM?
Developers usually collect 1–5 years of advance FCAM at the time of sale or possession. This is provisional, meant to cover township-level maintenance in the early years before federation handover.
Q3. Can developers increase FCAM charges after the advance is over?
Yes. Since most agreements mention that advance FCAM is provisional or “subject to revision,” developers may raise new FCAM bills once the advance is exhausted. These must still be reasonable charges under the RERA Act, 2016.
Q4. What can residents do if FCAM bills lack transparency?
Residents can:
- Demand itemised FCAM accounts and audited utilisation of advance collected.
- Form a joint residents’ committee to raise collective demands.
- Approach the Deputy Registrar of Co-operative Societies for directions.
- Escalate to MahaRERA citing Section 11(4)(d) of RERA Act and Order 57/2024.
Q5. Should residents stop paying FCAM if accounts are unclear?
No. Non-payment can attract interest, penalties, and legal recovery. Residents should continue paying bills while simultaneously demanding transparency and pursuing remedies through lawful channels.
