Frequently Asked Questions: In Sectional Properties, is security deposit different from the service charge ?

 Yes, under sectional properties, a "security deposit" is typically considered a separate charge from a "service charge," with the security deposit acting as a refundable upfront payment to cover potential damages, while the service charge is an ongoing fee used to maintain and operate shared common areas within the development.

Key points to remember:

Security Deposit:

• Paid upfront by the unit owner when they move in.
• Usually refundable when the unit is vacated, provided no damage is found.
• Intended to safeguard the property owner against potential damage caused by the tenant.

Service Charge:

• Regular monthly or annual fee paid by all unit owners.
• Covers costs associated with maintaining common areas like landscaping, building maintenance, security services, utilities for shared spaces, etc.
• The amount of the service charge is usually calculated based on the unit's share of the overall property value.