What are non-occupancy charges?
People living in a housing society have to pay maintenance charges. Even when the property is unoccupied, you still are required to pay the maintenance charges without any concessions. But when the property is neither self-occupied nor occupied by an immediate family member and the flat-owner uses the property for commercial gain, non-occupancy charges are imposed. The charges are included in the maintenance bill. It’s a way for a housing society to get some share out of your overall financial gain.
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Who pays the non-occupancy charges?
The owner of the housing unit (a member of a housing society) is liable to pay the non-occupancy charges. In such cases, homeowners need to provide a copy of the lease or license agreement in addition to other required forms and documents.
When are non-occupancy charges not applicable?
These charges are not applicable in the below cases:
- In case the society member is living on the property
- In case the property is unoccupied
- In case the property is occupied by an immediate family member such as son, daughter (irrespective of their marital status), etc.
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How much housing societies levy as non-occupancy charges?
Before the Government of Maharashtra capped the non-occupancy charges at 10% of the service charges, housing societies would levy exorbitant rates as non occupancy charges. This would increase rentals and cause financial stress to non-residing flat owners, especially the Non-Resident Indians (NRIs) who are keen to invest in the Indian real estate. The absence of clear guidelines for the same, would also often give rise to disputes between societies and its members. Moreover, poor implementation by the concerned authorities and varied interpretations by legal experts made things more complicated.
In the battle, while the housing societies have stressed on their right to collect non-occupancy charges, the State Governments have tried to protect the interests of the home owners. The Government of Maharashtra, in June 1997, had appointed a committee to look at the entire matter of non-occupancy charges in detail. As per the committee’s report, the State Government, in August 2001, had ordered that the non-occupancy charges should not be more than 10% of the service charges. This decision was upheld by the Bombay High Court in March 2007. And later, the Supreme Court also approved to the State Government’s notification.
How to calculate the non-occupancy charges?
As mentioned earlier, the amount of non-occupancy charges must not exceed 10% of the service charges. The service charges are included in the maintenance bill. It usually includes costs such as sitting fees to committee members, allowances to staff, common electricity and outgoings for society office. Expenses such as property tax, maintenance and repair cost and water charges are not a part of service charges. So, if the service charges levied by a housing society amounts to Rs. 5,000 per month, then the amount levied as non-occupancy charges will be Rs. 500 per month (10% of Rs. 5,000).
What happens if the flat-owner refuses to pay non-occupancy charges?
If the owner of the flat refuses to pay non-occupancy charges, the housing society will send a reminder notice. If the situation still persists up to a certain period, the society can declare the owner as defaulter. Further, a no-dues certificate will not be handed out by the society.