Service Fee in New Builds: What’s Included and How to Verify It

What is a service fee and why it matters 🏙️

A service fee (sometimes called common charges or maintenance fee) covers shared services in a new building: cleaning, security, elevator maintenance, landscaping, waste removal, insurance for common areas, and administrative costs. For buyers, understanding what you commit to paying from day one is essential for budgeting and avoiding surprises.

Typical components of a service fee

• Day-to-day cleaning and lighting of common areas.
• Technical maintenance: elevators, boilers, HVAC systems.
• Security and access control systems.
• Groundskeeping and outdoor maintenance.
• Insurance for communal areas and liability coverage.
• Administrative overhead: accounting, billing, vendor management.
• Reserve fund for major repairs and unexpected works.

Where to look in the paperwork 📄

1. Purchase contract and its annexes — look for definitions and obligations related to the fee.
2. Management agreement or building charter — these documents should describe the calculation method and change procedure.
3. Sample budgets or historical invoices (if parts of the building are already occupied).
4. Rules for the reserve fund: purpose, storage, access, and decision-making rules.

Tip: If the documentation uses vague language like "maintenance costs to be determined," ask for a detailed breakdown and the calculation formula.

Practical checklist: how to verify the service fee before buying ✅

1. Request a detailed budget and the exact formula used to calculate each owner’s share (by area, by unit, etc.).
2. Ask who manages the building: developer-controlled company, an independent management firm, or a homeowners’ association.
3. Check contracts with service providers — length and prices.
4. Confirm billing currency and frequency, and whether fees are indexed to inflation.
5. Understand how changes to the fee are approved — who votes and what notice is required.
6. If possible, review recent real invoices to compare claimed versus actual expenses.

Red flags to watch for 🚩

• No itemized budget or missing calculation method.
• Reserve fund not separated or controlled solely by the developer without oversight.
• Developer has unilateral right to increase fees without consultation.
• No signed contracts with service providers — risks of sudden price increases.
• Opaque reporting and no access to financial statements.

How to reduce risks and manage costs

• Insist on clear contract wording: calculation method, payment frequency, and limits on annual increases.
• Ask for a commitment to transfer management to an independent firm or homeowners’ association after occupancy.
• Ensure the reserve fund is kept in a separate account with periodic reports.
• Coordinate with other buyers to clarify expectations and, if needed, create a legal entity for joint management.

Example clause ideas to request in the contract (for guidance)

• “Service fees include expenses for maintenance of common areas, security, technical servicing, waste removal, groundskeeping and the creation of a reserve fund.”
• “Charges are calculated monthly pro rata to the unit’s share in common property, based on the approved budget. Fee adjustments may occur no more than once per year with prior notice and published justification.”

Steps if you feel something’s unclear

1. Compile the documents and a list of specific questions for the developer or management company.
2. Consult a real estate lawyer or an adviser (we at BuyHome can review documents and highlight risks).
3. Visit the property and inspect common areas — do they match the promised level of service?
4. Negotiate contract additions that provide more protection, or request written commitments from the developer.

If you’re exploring new-build options and want help verifying service fees, we can review the documentation and walk you through the risks. Check available properties and get professional assistance: https://buyhome.ge/en/search

Contact BuyHome for friendly, practical help choosing a property with transparent maintenance terms. 📞