Non-Occupancy Charges in Housing Societies: What You Must Know Before Renting or Leaving Your Flat Empty

Many homeowners in India face confusion and unnecessary financial burden when they do not personally occupy their flats in housing societies. Whether you rent your property to a tenant, leave it vacant, or allow a family member to use it, understanding non-occupancy charges is crucial. Unfortunately, most residents are unaware of their legal rights, which often results in excessive or illegal charges by society committees.

Non-Occupancy Charges in Housing Societies: What You Must Know Before Renting or Leaving Your Flat Empty

1. What Are Non-Occupancy Charges?

Non-occupancy charges are fees that a housing society can levy on a flat owner when the owner does not personally reside in the flat and it is used by someone else, such as:

  • A tenant who rents the flat

  • A relative not defined as a “close family member” in the society’s bylaws

However, if the flat is kept locked and unused, non-occupancy charges cannot be imposed.

These charges are separate from regular maintenance or service charges, which all members must pay regardless of occupancy.

2. Why Do Societies Charge Non-Occupancy Fees?

Society committees often justify these charges by claiming:

  • Tenants use more utilities or common areas

  • Additional administrative or security work is required

  • Extra maintenance costs arise

While these points may sound reasonable, the law clearly limits these charges and does not allow societies to use them for profit. Courts have consistently ruled that renting out a property does not financially harm the society, and owners have the right to earn income from their property.

3. Legal Framework and the 10% Limit

The Maharashtra Government, observing frequent misuse of non-occupancy fees by housing societies, issued a notification under Section 79-A of the Maharashtra Cooperative Societies Act on 1 August 2001.

Key points of the notification:

  • Non-occupancy charges cannot exceed 10% of the total service/maintenance charges

  • Societies cannot increase the percentage, even if approved in an AGM

  • The regulation applies to all cooperative housing societies in Maharashtra

This legal limit protects members from arbitrary and excessive fees.

4. Landmark Court Rulings

Venus Society vs Dr. Dattani (2003) – Mumbai High Court

The High Court reinforced the government notification:

  • Societies cannot pass resolutions violating law

  • Renters or tenants do not cause financial loss to the society

  • Owners have the right to rent their property freely

  • Maximum charge = 10% of maintenance

This ruling ensures that even a majority decision in AGM cannot override legal limits.

5. Common Misuses by Societies

Despite clear laws, many societies continue to overcharge. Examples include:

  • Charging 30-40% instead of 10%

  • Imposing additional fees during rental agreement renewals (e.g., ₹10,000 every 22 months)

  • Combining non-occupancy fees with maintenance or other “service charges”

  • Claiming AGM approval as justification

All these practices are illegal and unenforceable. Members have every right to challenge them.

6. When Non-Occupancy Charges Do Not Apply

A. Close Family Occupancy

If a flat is used by the owner’s spouse, children, parents, or siblings (as defined in society bylaws), no non-occupancy fee can be charged.

B. Locked or Vacant Flats

If the flat is completely unused and locked, non-occupancy charges cannot be imposed.

C. Apartment Associations under MAOA

Properties under the Maharashtra Apartment Ownership Act (MAOA) do not have any provision for non-occupancy charges. Owners have full rights to rent, lease, or keep the flat vacant without extra fees.

7. Maintenance Charges Are Mandatory

Regardless of whether the flat is occupied, rented, or locked, monthly maintenance fees must always be paid.

Maintenance covers:

  • Electricity for common areas

  • Water supply

  • Security services

  • Cleaning and housekeeping

  • Repairs and maintenance of common property

Non-occupancy charges are separate and limited, while maintenance fees are obligatory.

8. Protecting Yourself Against Illegal Charges

Step 1: Written Complaint to Society

  • Ask for legal justification of fees

  • Reference the 10% government limit

  • Record their response

Step 2: Complaint to Deputy/Assistant Registrar

  • File a complaint citing Sections 79A, 73, or 144 of the Cooperative Societies Act

  • The Registrar can cancel illegal resolutions and order refunds

Step 3: Cooperative Court

  • If society refuses to comply, you can appeal to the cooperative court

  • Courts can declare resolutions void and order reimbursement with interest

Step 4: Refunds and Compensation

  • Excess charges above 10%

  • Extra fees (like agreement renewal charges)

  • Interest on overpaid amounts

9. Myths vs Reality

Myth Reality
“AGM approved it, so it’s valid.” AGM cannot pass resolutions against law.
“Tenants use more facilities, so higher fees are justified.” Maintenance fees already cover these.
“Non-occupancy is part of maintenance.” It is a separate fee with a legal cap.
“Renting property means paying more fees.” Renting is your legal right.

10. Cooperative Societies vs Apartment Associations

Type Non-Occupancy Charges
Cooperative Society Max 10% of maintenance charges
Apartment Association (MAOA) No charges allowed; owners have full rights

Understanding your property type prevents disputes and illegal fee demands.

11. How to Calculate the Maximum Legal Charge

Example:

  • Maintenance = ₹4,000 per month

  • 10% of ₹4,000 = ₹400

  • Maximum non-occupancy charge = ₹400/month

Any charge above this is illegal.

12. Why Societies Overcharge

  • Lack of awareness among members

  • Committee members misusing authority

  • Misleading AGM resolutions

  • Treating tenants as “outsiders”

Knowing the law protects members from exploitation.

13. Tips for Members

  • Read society bylaws carefully

  • Keep all payment records

  • Ensure rental agreements are up-to-date

  • Verify police records for tenants

  • Attend AGMs and raise objections

  • Demand written justification for fees

14. What to Do If Society Denies NOC or Harasses Members

  • If following legal procedures, society cannot refuse NOC

  • File complaints with:

    • Deputy/Assistant Registrar

    • Cooperative Court

    • Housing Federation if necessary

15. Key Takeaways

  • Maximum non-occupancy charge = 10% of maintenance

  • AGM cannot override the law

  • High Court has reinforced the 10% cap

  • Charges above 10% or extra fees for agreement renewal are illegal

  • No charges if flat is locked or used by close family

  • Apartment associations under MAOA cannot levy these fees

Your property, your rights—always know the law before paying extra fees.

Conclusion

Non-occupancy charges are meant for minimal administrative purposes, not profit-making. Excessive fees are illegal and can be challenged effectively.

By understanding government orders, court rulings, and your society’s legal limits, you can:

  • Avoid overpaying

  • Demand refunds

  • Protect your rights as a flat owner

Remember: Your flat is your property, and the law is on your side.

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