common area maintenance charge my submission amitava choudhury 17/13/b gennex valley

COMMON AREA MAINTENANCE CHARGE

MY SUBMISSIONAMITAVA CHOUDHURY

17/13/B GENNEX VALLEY

FEW FACTS

1. PCTL attempted raising common area maintenance (CAM)

charge from April2009 @INR 1.50p/sq.ft/ month

2. Few of hardly 100: families then residing raised objections

toay CAM thru’ JLLM (agency maintaining GV then) since

Project was incomplete (club, swimming pool etc. Not

functioning). PCTL kept it in abeyance

3. On 08.08.2009 PCTL Management had a meeting with few

residents and had their consent for raising cam from Aug2009

@INR 1.00p/sq.ft/ month from Aug09 onward

4. In Nov 09 PCTL Wanted to raise Club Membership Fee @

INR 400/-per Flat/ month having a family size of 4 or less and

additional Membership @ INR 100/- per addl. Member/month.

This was aborted due to objections raised by Flat Owners on

the basis of PCTL Sale Agreement

FEW FACTS contd.)

5. Club, Swimming Pool, Restaurant, Fast Food Center started by

July 09; still project was incomplete viz. intercom (yet to install), 33

KV Substation ( 1 Transformer started in Feb/ March 2011) ,

piped gas supply (started in Dec2009), fire fighting system (Yet to

be fully tested and commissioned), etc.

6. PCTL did not define service levels for items included under CAM

viz. Water Quality, Housekeeping, Security, Lift Reliability and

Emergency Arrangements, Pest Control, Garbage Removal. etc.

7. On 1 Aug. 2009 approx 850 flats were at completion stage (Phase

2) and around 700 flats in Phase1 either unsold or not handed

over. In Aug 2011 around 20 Flats are Vacant and Many Investor

Flats Not Handed Over /under Resale.

8. Extensive repairs to phase1 flats were on and still continuing due

to poor design & construction quality.

9. Housekeeping, Security and Maintenance Staff( Plumbers, Carpenters, Masons, Glazed Aluminum Door Mechanic, etc. were common for both Project Work and CAM; 70-80% of these Man Power was busy for Marketing and Project Work, as unsold and not handed over Flats required Extensive Repairs to make them Fit for Hand Over

10. PCTL started Renting of Banquet Hall from Mid January 09 onward. Till date no Record/Register has been made available to Flat Owners. Renting out of Guest Rooms, Community Halls started at same time.

11. PCTL has Leased out Common Property to Vendors (Crèche, Fast Food Center, Sweet Shop, Provision Store, Medicine Store, Restaurant, Mobile Service Center at unknown terms and conditions. These vendors as Lessee should directly Purchase Electricity from WBSEDCL at commercial rates, whereas they have been provided with Sub-meters and Electricity is being sold to them by PCTL, unlawful activity as per Electricity Act

FEW FACTS contd.)

1. OUR STRENGTH : 1875 Flat Owners; one of India’s

Large Housing Complexes under Single Facility

Management:

2. Our Weakness: Very Low Occupancy (around 20%)

and hence Resident Flat Owners don’t have the

authority to agree with PCTL’ s proposal to raise CAM

3. PCTL has Moral and Legal Responsibility to pay

Following towards CAM Account:

MY SUBMISSIONS:

A. CAM for Unsold and Not Handed Over Flats

Why: PCTL has used and is using Same Maintenance, Security and Housekeeping Staff for Upkeep of Such Flats.

How Much : Estimate Only

Flats Unsold & Not Transferred in AUG 09 : 1550*

Flats Unsold & Not Transferred in AUG 11 : 100*

AVG. No. of Unsold & Not Transferred for 2 year Period:(1550 +100)/2+100=925 for Uniform Selling and Handing Over Rate.

At 60% Non Uniformity Factor, Flats unsold & not transferred:

=60% of 825 +100= 595

AVG Flat Area= 1000 Sq. ft.*

CAM Payable by PCTL for Unsold and Not Transferred Flats till AUG 2011= 595 x 1000 x 2 yrs x 12 m/yr = INR142,80000 =INR1.43 Cr

MY SUBMISSIONS (contd.)

PCTL is Morally and Legally Liable to Pay

B. FAIR RENT FOR COMMON AREAWhy: Each Flat Owner has purchased from PCTL portions of COMMON AREA @INR 1000 to 3200/ Sq. Ft (Floor Rise Included). Should we allow Common Area for Commercial Use almost rent free is a moot question. How Much : Estimate Only Assuming an AVG PURCHASE PRICE of INR2000, Fair Rent for Commercial Use= INR 2000/ 10 years Recovery Period = INR 200/- Yr.AREA Used by PCTL, PIONEER, changed considerably between Aug 09 and Aug10. Total Area used for commercial purpose : 10000 Sq ft Built up Area (Assumed)Avg. occupancy Period:1.5 yrs (From signing Agreement with PCTL)Rent Due from PCTL : 10000 x 200 x 1.5 Yrs= INR 30 Lakhs



C. CAM CHARGE for Common Area on Commercial UseWhy: Commercially Used Common Areas attract more outsider footfalls (Security Threats) than a Flat doesCreates more house keeping and garbage disposal Problems, Use more DG POWER, Water, Electrical Installations and Systems, etcTo Levy Built Up Area CAM Charge @ 2 times the rate applicable to a Flat Owner (Super Built Up Area basis) would stand to reasoning.How Much : Estimate Only CAM Recoverable from Common Area in Commercial Use= 10000 Sq Ft x18 Months x INR 2/ per Sq Ft/ month= INR 3.6 L



D. RENT From Community Halls

Why: It is our Property for Family Functions/ Get-together

How Much : Estimate Only

Assumption : At least100 days of Hiring of Main Banquet Hall (Ground Floor) at least in a year since January 2009; 1st Floor Hall at Club House: 30 days/year since Jan2010

Other Community Halls : 80 days/year

Main Banquet Halls at Club House : INR 10,000/- per day

Other Halls : INR 3000/- per day

Total Community Hall Rent Credit to CAM A/c: 10000x 100x2.75 yrs + 10000x30x1.75 yrs + 3000x80x2.75 =

INR 39.35 Lakhs

TOTAL PCTL LIABILITY ESTIMATE for Items A to D = INR 2.16 Cr.



E. ELECTRICITY CHARGE FOR COMMON AREA ON COMMERCIAL USE:

All Vendors including PCTL and Pioneer, Club House, Banquet Halls,

Community Halls, Pump Houses must have independent Metering

Arrangement with WBSEDCL. PCTL can not transfer the present sub-

metering arrangement to Genexx Valley Flat Owners. I understand

Vendors are being charged at a very low and uniform tariff @

INR3.00 per KWH. Post Installation of Independent Meters, PCTL has

to determine and collect the differential amount from each vendor and

credit the same to GV Maintenance A/c.



TWO SEPARATE ASPECTS:1.MAINTENANCE OF COMMON AREA (MCA): Shared

Expense2.MAINTENNCE OF INDIVIDUAL FLAT (MIF): Personal

Expense

• Both Activities by same set of manpower (e.g. Plumber, Carpenter, Electrician, House Keepers, etc.) is not feasible due to conflicts in urgency / Scheduling Interests.

• Organising MIF by Individual Owner is difficult and costly due to busy personal schedules and Zero Competitive Advantage for small scope of work.

• It is possible to create a Win-Win condition in this conflict.


PROJECT IS OVER, MAINTENANCE IS A DIFFERENT BALL GAME

ROLE OF MCA & CONTRACTORS• We Flat Owners and MCA Administrator have to shift focus

from Contractors for skilled Man Power Supply to Job Outsourcing to Qualified/ Experienced Contractors thru’ Competitive Itemised Annual Rate Contract bids.

• MCA Administrator to Route MIF to Contractor Panel. • Contractor to Allocate Man Power for both MCA & MIF

schedules• MCA Administrator to Manage MCA thru’ such Rate

Contracts • Contractors to arrange for Quality Materials and Standard

Spares from Reputed Vendors



NECESSARY COMMITMENT FROM ALL FLAT OWNERS :

• To Request MCA Administrator for all MIF

• To authorise MCA – To place MIF work order on Contractor

– To seek fund from Individual Flat Owner– To raise final MIF bill to individual Flat Owner for collection and

payment to Contractor– To collect token service charge for MIF on case to case basis

and credit CAM A/c

• No Personal Arrangement for MIF :Avoid Potential Security

Threats within the Complex



END RESULT:• No Conflict Between MIF and MCA Work• Good Quality Work at Competitive Cost and Efficient

Execution• Minimum Security Threat• Minimum Wage Calculation for Head Counts by MCA

Administrator Not Necessary • No underemployed work force within complex: We have

discussed this issue in many meetings• Rate Contracts to Indirectly Define Service Levels vis-à-vis

CAM Charge• May be possible to reduce CAM Charge from Present Level.



END RESULT:• No Conflict Between MIF and MCA Work

• Good Quality Work at Competitive Cost and Efficient Execution

• Minimum Security Threat

• Assured Comfort Level to Flat Owners to get MIF work done.

• Minimum Wage Calculation for Head Counts by MCA Administrator Not

Necessary

• No underemployed work force within complex: We have discussed this issue in many meetings

• Improved Morale and Motivation for Workforce within GV

• Rate Contracts to Indirectly Define Service Levels vis-à-vis CAM Charge

• May be possible to reduce CAM Charge from Present Level.• Assured Improvement in CAM Service Level



OTHER POINTS:

1. CLUB FACILITY USAGE CHARGE:

Monthly Area-wise Usage Charge (Depreciation, Power, Housekeeping, AMC, Fair Floor Area Rental, consumables Expenses based) must be defined transparently and objectively for different Activity Areas by PCTL Immediately, viz.

– Swimming Pool, - GYM, – Billiard, - Library, – Table Tennis, Badminton and Squash – Other Indoor Games (Card, Chess, Carom, Pool Table)

Swipe Card/ Biometric Readers must be installed at these locations to allow entry to subscribing members only



OTHER POINTS:

2. DIFFERENTIAL RENT FOR BANQUET HALL:

This was discussed in General Body Meeting on July 3 called by GVWS and agreed by all present to allow preferential rates to Direct Family Members of Flat Owners PCTL must implement it immediately

3. Security to Monitor Entry of Visitors to Banquet Hall/ Pioneer Marketing and raise hourly Visitor Car Parking Fee Bills in the name of Flat Owner Hosting the Party/ Pioneer Marketing.



common area maintenance charge my submission amitava choudhury 17/13/b gennex valley

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