Non-Occupancy Charges in Society: Guide for Flat Owners
Property owners face extra costs through non-occupancy charges in society when renting out their flats. These charges affect your finances a lot, especially when you have a rented property. Maharashtra now limits these charges to 10% of service charges. Some owners used to pay rates up to ₹9 per square foot. Non-resident Indians (NRIs) deal with the steepest costs, with their annual charges adding up to several lakh rupees. Know your society charges and other details without fail with NoBrokerHood Society Management System Software
Property management needs a clear grasp of these charges if you own but don’t live in your flat. This piece covers everything about non-occupancy charges in society its application, calculation methods and the legal framework that protects your property owner’s rights.
What is Non Occupancy Charges in Society?
Non-occupancy charges in society are charges levied by the housing society on a flat owner when the flat or apartment is not occupied by them or their immediate family and instead is either left vacant or rented out to someone else.
Applicability of Non-Occupancy Charges in Society
| Applicability | 1. Property is transferred to you and remains vacant 2. Property is rented out |
| Charges must be paid in three cases: | 1. Flat stays empty after possession 2. Property is rented to tenants 3. Commercial spaces are leased |
| Exemptions from non-occupancy charges in society: | 1. You live in the flat yourself 2. Immediate family members occupy the property 3. Flat remains locked without tenants |
| State-specific regulations: | Karnataka: Prohibits collecting non-occupancy charges in society. Maharashtra: Enforces charges with strict regulations |
| Consequences of non-payment: | 1. Society can mark you as a defaulter 2. Reminder notices may be sent 3. No-dues certificate can be withheld until payment is cleared |
| The property owner (society member) is responsible for these charges | Tenants may pay based on the tenancy agreement |
How to calculate non-occupancy charges in society
The calculation of non-occupancy charges in society follows a simple formula based on service charges. These charges can’t go beyond 10% of your monthly maintenance bill’s service charges component.
Service charges cover:
- Society staff’s salaries and allowances
- Society office expenses
- Committee member sitting fees
- Stationery and printing costs
- Common electricity charges
Non-occupancy charges in cooperative housing society calculation starts with identifying the service charges in your maintenance bill. Multiply that amount by 10% and you’ll have your non-occupancy charges. A bill with service charges of ₹5,820 would mean non-occupancy charges of ₹582.
Parking spaces within society premises add another dimension to these charges. You’ll need to factor in your designated parking spot when calculating non-occupancy charges in society. All but one of these rules apply differently to members without vehicles or designated parking spaces – they don’t pay this component.
The Consumer Protection Act prohibits housing societies from charging random amounts. Make sure your charges stay within the 10% limit of service charges. For example, A maintenance bill of ₹3,500 with service charges of ₹2,500 should have non-occupancy charges of ₹250 – this is a simple way to verify the calculation.
Also Read: Society Maintenance Charges
Legal Framework and Regulations
Non occupancy charges as per society bye laws went through major changes after housing societies faced criticism for overcharging. The Maharashtra government created a committee in June 1997 to get into this matter. The committee made recommendations that led to the 26-year old state guidelines under Section 79A of the Maharashtra Cooperatives Societies Act 1960.
Mont Blanc Cooperative Housing Society brought a landmark case by challenging Section 79A with a petition under Article 226. The society questioned the state government’s right to limit their charging freedom. The Bombay High Court supported the state government’s decision in March 2007, and the Supreme Court later backed this ruling.
The current non occupancy charges as per bye laws has these key provisions:
- Housing societies must follow guidelines issued under Section 79A
- Non-occupancy charges in society must stay within 10% of service charges
- Societies that charge more than limits face action under Consumer Protection Act
- Corporate-owned flats where actual staff members live don’t need to pay these charges
The state government keeps watch over housing societies through these regulations. Societies breaking these guidelines face legal action under both the Consumer Protection Act and Indian Penal Code. These measures will give a fair balance between society operations and homeowner protection.
Implications for Property Owners
Living in a housing society brings financial duties beyond simple maintenance costs. Defaulting on non-occupancy charges in society can set off a chain of events. These events can limit your property rights and affect your transactions.
Your housing society follows a step-by-step process against defaulters. You will get reminder notices about pending payments. Society can label you as a defaulter if you continue to miss payments. This label creates serious problems and limits your property dealings.
Property sales or transfers face the biggest hurdles. The society can hold back your no-dues certificate which you need to:
- Complete property sales
- Transfer ownership
- Get necessary clearances
- Execute rental agreements
NRI property owners should pay special attention to these rules since many invest in Indian real estate from overseas. Some societies used to charge steep rates of several lakh rupees each year before the Maharashtra government stepped in. This created a heavy burden on non-resident owners.
The best way to avoid trouble is to pay your dues on time. The society might take legal action to recover pending amounts in certain cases. Buyers should check any pending society non-occupancy charges while purchasing a resale flat. Societies often ask new buyers to clear old dues before they approve the deal.
Also Read: Apartment Maintenance Charges
Conclusion
Non-occupancy charges in society vary by state, with Maharashtra capping them at 10% of service charges and Karnataka banning them entirely. Property owners should be aware of their rights, ensure correct calculation of charges, and maintain clear communication with housing societies. These charges are particularly relevant for NRIs and can impact property transactions. Including these costs in financial planning helps in better property management for both current owners and potential buyers.
FAQs
Q1. What are non-occupancy charges in society and when do they apply?
Non-occupancy charges are fees levied by housing societies when a flat is vacant or rented out. They apply when the property has been transferred to you by the society or builder and is not occupied by you or your immediate family members.
Q2. How are non-occupancy charges in society calculated?
Non-occupancy charges are calculated as 10% of the service charges component in your monthly maintenance bill. For example, if your service charges are ₹2,500, the non-occupancy charge would be ₹250.
Q3. Are there any exemptions from paying non-occupancy charges in society?
Yes, you’re exempt from paying these charges if you personally reside in the flat, if your immediate family members occupy the property, or if the flat remains locked without being rented out.
Q4. What are the consequences of not paying non-occupancy charges in society ?
Failing to pay non-occupancy charges can result in the housing society issuing reminder notices, declaring you a defaulter, and withholding your no-dues certificate. This can affect property transactions such as sales or transfers.
Q5. Do non-occupancy charges in society apply uniformly across all states in India?
No, non-occupancy charges vary across different states. While Maharashtra has capped these charges at 10% of service charges, some states like Karnataka have issued guidelines against collecting non-occupancy charges altogether.