Non-Occupancy Fees In Cooperative Housing Societies
Cooperative Housing Societies- Non-occupancy costs are explained in terms of its application under the Maharashtra Cooperative Societies Act. A non-occupant residence is one that is not occupied by the landlord.
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What are non-occupancy charges?
Housing societies charge non-occupancy fees to member flat owners who do not live in their own properties. Such non-residence may be due to the flat being vacant or rented out.
What are the requirements for levying non-occupancy charges?
As previously stated, non-occupancy charges can be levied in society for vacant or rented flats. Every cooperative housing society has the authority to charge.
- Non-occupancy charges for vacant apartments
- The Non-occupancy fees for a rental flat
- Non-occupancy fees for commercial spaces
These fees differ from state to state. For example, while some states, such as Maharashtra, charge non-occupancy fees, others, such as Karnataka, have eliminated them, with the state government issuing severe restrictions against them.
Who is excluded from the non-occupancy charges?
If the flat owner lives in the flat, he does not have to pay non-occupancy rates. If the flat is occupied by members of his close family, such as a son, daughter (married or single), or grandchildren, they will also be excused from paying non-occupancy fees.
What are the service charges?
Service charges are the salary paid to society personnel, stationary charges, administration costs, and other expenses incurred by the society. This, combined with utility rates such as electricity, constitutes the non-occupancy charges.
How much can societies demand as non-occupancy fees?
Before the Maharashtra government regulated non-occupancy charges at 10% of service charges, they were levied and collected arbitrarily. Societies will impose exorbitant prices, up to Rs 9 per square foot, for non-occupancy premises. This had the negative effect of raising rents and creating a financial burden on non-resident apartment owners. Non-resident Indians (NRIs), many of whom are active investors in Indian real estate, were notably impacted. There were also reports of non-occupancy charges being levied at a disproportionate rate, totaling several lakh rupees per year.
How do you compute non-occupancy charges?
According to a circular published by the Maharashtra government under Section 79A of the Maharashtra Cooperative Societies Act of 1960, non-occupancy charges cannot exceed 10% of the society’s service charges (excluding municipal taxes).
For example, imagine a society’s entire maintenance price for a member is Rs 3,500, which includes Rs 2,500 in service charges. The society would then levy a non-occupancy tax of Rs 250, which is 10% of Rs 2,500.
What is considered illegal in terms of non-occupancy fees?
Any amount charged under any additional head, other than the 10% fixed charge, is illegal. In such a circumstance, the society may be prosecuted under the Consumer Protection Act for purposeful carelessness, deficiency in services, overcharging, abuse of authority, and harassment. When pursuing legal action, the lessee must follow proper procedures and provide necessary documentation proof.
What are the requirements for levying non-occupancy charges?
If the flat owner resides in the flat, he is not required to pay non-occupancy charges. If the flat is occupied by members of his close family, such as a son, daughter (married or unmarried), or grandchildren, they will also be excluded from paying non-occupancy charges.
How much can societies demand as non-occupancy fees?
Before the Maharashtra government regulated non-occupancy charges at 10% of service charges, they were levied and collected arbitrarily. Societies will impose exorbitant prices, up to Rs 9 per square foot, for non-occupancy premises. This had the negative effect of raising rents and creating a financial burden on non-resident apartment owners. Non-resident Indians (NRIs), many of whom are active investors in Indian real estate, were notably impacted. There were also reports of non-occupancy charges being levied at a disproportionate rate, totaling several lakh rupees per year.
What happens if the flat owner does not pay the non-occupancy charges?
If the flat owner does not pay the non-occupancy charges, the housing organisation will send a reminder notice. If the payment is not made, the owner may be declared a defaulter. Moreover, the housing society would not offer the no-dues certificate.
Navimumbaihouses.com Point of View
Today, housing societies’ non-occupancy charges are limited to 10% of the service charge component of the monthly maintenance bill. These fees might be assessed when the apartment is given on leave and licence or becomes empty. It is recommended that a resale apartment purchaser check for such arrears, if any, before purchasing the flat, as the society may refuse to provide the buyer a NOC or may require the buyer to pay the non-occupancy charges, causing the transaction to fail.
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Registrar Of Cooperative Societies’ Authority And Responsibilities
