All You Need To Know About Non-Occupancy Charges

By Investoxpert | 17 Nov 2023 | Real Estate

Non-occupancy charges are one of the many fees specified in the bye-laws of a Co-operative Housing Society (CHS) in Maharashtra. These apply to properties that the owner or members of his family do not occupy. The cost of maintaining the elevator, common area energy, security, and other amenities is included in the service charges, which are the basis for calculating the occupancy charges.

What Is Non Occupancy Charges?

Non-occupancy fees are assessed when a developer or society transfer’s ownership of a property to the owner, but the unit stays unoccupied even if it is ready to move into. But these only apply if the apartment is rented out. If the apartment is locked and not sublet, or if a family member, such as a parent or spouse, resides there, these fees are not due.

There have been lengthy discussions over the subject of non-occupancy costs in the past. It has frequently resulted in conflicts between a society and its members when there are no defined rules. The majority of homeowners think that society has assessed them excessive fees. The group defends these fees it charges members who sublet their apartments and make good rental money. Complicating issues are inconsistent legal expert interpretations and ineffectual enforcement by the authorities.

A non-occupancy charge is not applicable if:

The apartment is occupied by the society member.
The apartment is closed, locked, unoccupied, or neither.
Family members live in the apartment.
Court ruling regarding non-occupancy fees

State governments have attempted to step in and defend the interests of homeowners, even as cooperative societies have affirmed their right to impose non-occupancy fees. The Maharashtra government established a committee in June 1997 to thoroughly investigate the NOC problem as a whole.

In August 2001, the state government issued an order based on the committee's recommendations, stating that the NOC charges could not surpass 10% of the service prices. In March 2007, the Bombay High Court affirmed this state government judgment. The Supreme Court then approved the state government's announcement as well.

How To Calculate Non Occupancy Charges?

As previously stated, the percentage of service charges that are charged by society as non-occupancy charges should not exceed 10%. Non-occupancy charges, for instance, would be Rs 271 (10% of Rs 2,710) per month if the service charges component of the monthly maintenance computation is Rs 2,710 per month.

What are the service charges?

Bye-law 68 of the new model bye-laws states that service charges consist of common electricity prices, salaries and allowances for personnel, expenses for the society office, committee member sitting fees, printing and stationery charges, and other charges.

If a homeowner refuses to pay the non-occupancy fees, the society has the right to declare the owner in default and to deliver a reminder notice. Furthermore, the society will not issue a no-dues certificate.

Do Non-Occupancy Charges Include Parking Space As Well?

If you have a parking space inside the society's grounds, the parking area is regarded as part of the non-occupancy fees. But you won't be responsible for paying for this part if you don't own a car.

What Is The Criteria For Levy Of Non Occupancy Charges?

A flat owner is exempt from paying non-occupancy fees if he or she is living there. If the apartment is occupied by family members, such as his son, daughter (married or single), or grandkids, they will also not be charged a Non Occupancy Charges.

What Happens If The Flat Owner Does Not Pay Non-Occupancy Charges?

If the owner of the apartment fails to pay the non-occupancy charges or refuses to pay, the housing organization will send a reminder notice. If the money is not paid, it may declare the owner to be in default. Furthermore, the housing society will not offer the no-dues certificate.

What Are The Government Resolution On Non-Occupancy Charges?

The Maharashtra Cooperative Housing Societies Act, 1960 (MCS Act 1960) governs housing societies in Maharashtra. A structure of laws and regulations is established by the Act to oversee and manage the operations of housing societies. Under the Act's provisions, disagreements between housing societies and their individual members may also be settled.

The MCS Act of 1960, Section 79A, gives state governments the authority to publish circulars that specify rules for how societies should operate. Circulars published pursuant to Section 79A are legally binding. The Maharashtra government used Section 79A to stop housing societies from charging their members outrageous non-occupancy fees.

On August 13, 2001, the circular under 79A was released, capping the amount of non-occupancy charges at 10% of the society's regular service fees. A society's service costs cover things like maintenance, common area energy, lift use, and security; they do not cover municipal taxes. The circular required adherence, and noncompliance would result in punitive measures, such as the expulsion of society officials.

Are Non Occupancy Charges Legal?

Yes, they are legal as the Supreme Court has ruled that a society may impose non-occupancy costs equal to 10% of the service price.

Conclusion

Currently, housing societies are only allowed to collect Non Occupancy Charges Mumbai up to 10% of the monthly maintenance bill's service charge portion. These fees would be assessed as soon as the apartment is turned over for use or becomes empty. If the flat was unoccupied before the sale, it is also recommended that the buyer of a resale apartment look for any such arrears.

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All You Need To Know About Non-Occupancy Charges

What Is Non Occupancy Charges?

A non-occupancy charge is not applicable if:

How To Calculate Non Occupancy Charges?

What are the service charges?

Do Non-Occupancy Charges Include Parking Space As Well?

What Is The Criteria For Levy Of Non Occupancy Charges?

What Happens If The Flat Owner Does Not Pay Non-Occupancy Charges?

What Are The Government Resolution On Non-Occupancy Charges?

Are Non Occupancy Charges Legal?

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Read Also : Top 10 Best Affordable Housing Project in GoaRead Also : Top 10 Best Affordable Housing Project in Lucknow

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