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Bangalore : RWAs of gated communities collecting money from site owners

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Bangalore : RWAs of gated communities collecting money from site owners

Last updated: March 9 2021
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  • Bangalore : RWAs of gated communities collecting money from site owners

    Many gated communities (plots) in the outskirts of Bangalore are hardly occupied and it has become a burden to maintain these layouts with few scattered houses. The RWAs are coming up with new rules to collect a onetime lumpsum (Rs. 50,000 & above) for corpus fund. Similarly amounts in excess of Rs 5000 annually for maintenance of the layout from site owners.

    For a site owner there is no incentive to make the above payments. Therefore RWAs are threatening with penalties on non-payment.

    Are these rules legally binding? How to ensure that all the site/house owners are in compliance with such rules?
    Last edited April 4 2018, 01:44 PM.
  • #2

    #2

    Re : Bangalore : RWAs of gated communities collecting money from site owners

    Isn't this an issue with you all? I can ignore or defer payments but I am worried it may come back to bite in future.

    Any suggestions?

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    • #3

      #3

      Re : Bangalore : RWAs of gated communities collecting money from site owners

      RealEnthu


      Here's my response to your question / concern.

      The gated communities developed are not actually gated as per law. All the common areas in the layouts like roads, parks and civic amenities developed in a layout are public properties registered to BDA/BMRDA/local Panchayaths.

      Ideally, with the annual property tax paid by the plot owners to the local governing body, the common areas in the layouts are expected to be maintained by the local governing body like how it happens within the City limits by BBMP. However, the maintenance is not being done in the suburbs by the local bodies, who are not proactive in taking up such maintenance activities, but use the property tax collected for the welfare and development works within the immediate Village areas, which is for their micro vote bank politics.

      Hence, the RWA's and Developers have been taking up this responsibility in the absence of any support from the local governing bodies. Few RWA's I know of are collecting monthly/quarterly/annual maintenance fee without lumpsum from the plot owners ranging anywhere between 60 paise per sft per month to Rs.1 per sft per month, while few other RWA's have been collecting a sinking fund of Rs.50,000 to Rs.1,00,000 per plot without any monthly or yearly payments later on as the reccuring deposit interest will generally take care of the regular maintenance expenditure in the later case. There are few hybrid models as well.

      When you invest on plots or villas or apartments either in the city limits or in the suburbs, you expect the property to appreciate in value. The appreciation comes at a nomimal cost and doesn't happen automatically. While the Developer sells a property at today's value, the appreciation happens over a period of time with regular upkeep of the project.

      Hence, I do not think this poses any threat, but to be treat as a common responsibility of each plot owner and resident in the project to contribute towards upkeep and appreciation of the property.
      Last edited April 9 2018, 12:49 PM.

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      • #4

        #4

        Re : Bangalore : RWAs of gated communities collecting money from site owners

        niru9669 Thanks for your detailed response. I really appreciate your contributions to this forum.

        I agree that maintenance is a challenge particularly when there are fewer houses. In today's scenario appreciation in outskirts is at best stands as a good bet against inflation. Site owners see no incentive in paying maintenance charges because they don't make use of any of the services. In a selfish world that we live, it is hard to expect site owners to payup for common community good and think long term.

        People already pay income tax, property tax, stamp duty & registration charges, katha charges, bribes etc. The governing bodies have become greedy, corrupt and inefficient. The RWA should not join the list by imposing gated-community tax on site owners!

        The RWA has resources at its disposal and should think out of the box to monatize it. How? Let's say by converting some of the ill maintained parks into edible parks. Organize summer camps and workshops at club house for residents and outsiders for a fee. Plant fast yielding fruit trees (shrubs) in empty sites etc. In fact some farm- eco- themed layouts already do this.

        Land is a productive asset and has been rendered barren & burden by unprecedented growth in layouts. Is it possible to change this?
        Last edited April 10 2018, 03:22 PM.

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        • #5

          #5

          Re : Bangalore : RWAs of gated communities collecting money from site owners

          In the last few months I went around layouts in the outskirts (mainly South and West Bangalore) and here are some photos. There are hundreds of layouts and lakhs of such sites. New layouts are still being formed and sold in the vicinity. Is this the best we can achieve with all the monies we saved from IT, BT and other hi-tech white collared jobs?..

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          • #6

            #6

            Re : Bangalore : RWAs of gated communities collecting money from site owners

            Some more...
            (Attn. to admin: For some reason panaromic photos are appearing multiple times even when only one file is uploaded)
            Last edited April 10 2018, 06:33 PM.

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            • #7

              #7

              Re : Bangalore : RWAs of gated communities collecting money from site owners

              @RealEnthu, Good to see that you covered some ground and like your ideal of self sustainability within such communities in the suburbs which are yet to develop.

              Most of the residential layouts have their own gestation period depending upon where they are developed. We need to look at both sides of the coin.

              I will explain a typical scenario below;

              JR Greenpark was a project which was developed on Chandapura-Anekal road, intially in an extent of 10 acres way back in 2003-04, when there was literally nothing around the vicinity. The plots were being sold back then at Rs.150/Sft*, with only 2 house in the project.

              Between 2004 to 2007 nothing much happened, but the layout was maintained by the Developer. The value in 2007 was Rs.1250/Sft with only 10 houses in the project.

              2011 : Rs.1650/Sft

              2013: Rs. 2000/Sft

              2015: Rs. 2500/Sft (Residents Welfare Association was Registered)

              2017: Rs. 3000/Sft (Project maintenance handed over to Association)

              2018: Rs.3200/Sft* and counting with over 120 houses and layout extent spread to 83 acres with various amenities and a fine Club house.

              A plot owner who has invested at Rs.150/Sft*, almost 15 years ago, gets a return of 20 times today.

              This kind of return is only possible if the layout maintenance is taken care either by the Developer or the Association, with contribution of the Plot and House owners. Good maintenance attracts house constructions and life within the community, which is the case with one of the projects above.

              Plot owners are the ultimate benefitiaries in such deals. While, there are ways to optimise and reduce the maintenance outflow to the plot owners, the maintenance expenses incured by a plot owner is insignificant when compared to the asset appreciation gained over a period of time.

              In my opinion the best way to optimize the maintenance spend is to add pressure on the local governing bodies like panchayaths, cmcs, tmcs, BBMP & the likes to take up maintenance of these developed projects as all the common areas like roads and parks which need maintenance are already registered to them. To bring a change in the government policies to ensure that maintenance is taken up by these agencies once developed & registered to them. This will reduce the burden on Plot owners, as they are already paying the property tax !




              Comment

              • #8

                #8

                Re : Bangalore : RWAs of gated communities collecting money from site owners

                J.R. Greenpark is an exception and a benchmark for the Chandapur/Anekal area. Hats off to an excellent work done!

                niru9669, As you have mentioned the plot owners are the ultimate beneficiaries but that was way back during the golden period of plot investment i.e. 2001 to 2008. I doubt any plot owner has seen decent appreciation on his investments made in the last decade. The reason is systemic and free market dynamics with greed ruling all quarters (including us the humble software engineers 😉 ).

                Coming to your last point about adding pressure on the local governing bodies… These local governing bodies are guided by vote bank electoral politics. Where money spent for a community directly depends on the number of votes it can fetch in return. A panchayat will always work in the interest of villagers because that will help them in winning votes. Even though today most of its revenue is generated from developer and gated community. The evidence is clear when you see villages getting all the goodies.

                In order for panchayat to change its priorities, a mass movement is required from plot owners across different layouts, which unfortunately I doubt will happen. A more pragmatic solution is the RWA thinking out of the box and residents/plot owners of an individual gated community converging at a shared vision/plan to become self sustainable. This perhaps will be a good starting point.

                IMHO, it is important to free ourselves from the shackles of conventional thinking. The Community organic vegetable gardens, edible parks that are common in western world could be a guiding light for us. A good reference is the growing popularity of community gardens in our own neighborhoods. For example, South Bangalore Community Garden, Kannamangala Community Garden, Farmizen *** com(app-based) and others.

                Last edited April 15 2018, 08:40 AM.

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                • #9

                  #9

                  Re : Bangalore : RWAs of gated communities collecting money from site owners

                  I think this is a relevant debate for both RE bulls as well as RE bears of plotted developments. I request @niru9669 and other IREF regulars @MANOJa, @familyguy, @humblefool, @Somashekar… to share your opinion.

                  Sparsely occupied gated layouts should develop Community vegetable gardens (similar to app based Farmizen *** com) in idle CA land (or vacant contiguous investor plots) to improve aesthetics, safety, social environment, maintenance & financial sustenance of such layouts. What do you say?


                  Last edited April 17 2018, 07:04 AM.

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                  • #10

                    #10

                    Re : Bangalore : RWAs of gated communities collecting money from site owners

                    RealEnthu



                    To your query on the maintenance costs- Maintenance charges paid by owners in apartment complexes/layouts is the life blood for the apartment/Resident welfare associations. Without these charges,no layout can be maintained since its a shared community. There are huge costs for maintaining and running a layout/apartment- activities like housekeeping, security, cleaning, gardening, lifts, electricity, water , STP etc. While one can complain about charges, paying anywhere between Rs 3 to Rs 5 per sqft per month for apartments and Rs 10 to Rs 12 per sqft per year for layouts is normal because labour, material and utility costs are like that nowadays.



                    The owners should provision for these amounts and pay it to the association on time. Its only fair to do so since the maintenance and upkeep of the apartment/layout ensures better resale value as well as a better quality of life in the community. Its an unfortunate trend nowadays that people buy 1 cr worth apartments/plots but complain for additional Rs 1000 per month maintenance costs.



                    On the other hand, owners should demand accountability, transparency of accounts,proper book keeping and quality of service from associations.



                    Note that property taxes is a entirely different subject and not connected to maintenance charges.

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