Housing Society Rules: What Are Non-Occupancy Charges and When Are They Applicable? A Complete Guide for Members
When it comes to living in a housing society, most members are aware of the common rules—monthly maintenance, repairs, security charges, or contribution towards sinking funds. However, one particular charge often confuses and troubles homeowners: Non-Occupancy Charges (NOC).
Many housing societies, either due to lack of awareness or intentional misuse of authority, impose such charges arbitrarily. Members who rent out their flats or keep them vacant often become victims of unfair demands. This article will explain in simple and easy language everything you need to know about Non-Occupancy Charges, when they are legally applicable, what the law says, and how members can protect their rights.
What Are Non-Occupancy Charges?
In the simplest terms:
👉 Non-Occupancy Charges are fees levied by a housing society when the owner or their close family members are not living in the flat, and instead, the flat is rented out to a third party.
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If you, as a flat owner, rent your property to a tenant, your housing society can ask you to pay non-occupancy charges.
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If you keep the flat locked or vacant, no non-occupancy charge can be demanded.
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If your flat is occupied by your close relatives (as defined under society by-laws), again, no non-occupancy charges are applicable.
In short, NOC is not a penalty but an additional charge applied only when the property is used by outsiders instead of the owner or family.
Why Do Housing Societies Levy These Charges?
Housing societies argue that when outsiders (tenants) live in the society, the administrative burden increases:
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More work for security and verification.
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Frequent changes of tenants.
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Higher usage of common facilities.
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Additional monitoring required to maintain discipline and community standards.
While these reasons are often cited, it’s important to understand that societies cannot misuse this reasoning to charge members beyond the legal limit.
The Legal Framework for Non-Occupancy Charges
Non-occupancy charges are not a matter of personal choice for societies. They are regulated under The Maharashtra Co-operative Societies Act, 1960 and subsequent government directives.
Key Legal Provisions:
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Government Resolution (GR) dated 01/08/2001 – Issued under Section 79A of the Co-operative Societies Act.
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It clearly states that Non-Occupancy Charges cannot exceed 10% of the service/maintenance charges.
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This was introduced because many societies had started charging excessive fees, sometimes 20% to 40% of rent or maintenance.
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High Court Judgment (Venus Co-operative Housing Society vs Dr. J. D. Detwani, 2003)
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The Bombay High Court upheld the government’s resolution.
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The court declared that societies cannot pass any resolution that goes against the law, even if the majority of members support it.
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The judgment also emphasized that renting out one’s own flat is a fundamental right of the owner and does not harm the society’s interests.
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Applicability:
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Non-occupancy charges apply only to co-operative housing societies, not to properties registered under the Maharashtra Apartment Ownership Act.
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In apartment ownership systems, the flat is considered the owner’s absolute property, and renting it out is entirely the owner’s right.
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When Are Non-Occupancy Charges Applicable?
Let us break this down with clear scenarios:
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Flat given on rent to a tenant –
✅ Non-occupancy charges applicable (maximum 10% of service/maintenance charges). -
Flat locked/vacant (not occupied by anyone) –
❌ Non-occupancy charges not applicable. -
Flat occupied by close relatives (family members) –
❌ Non-occupancy charges not applicable. -
Flat given to a paying guest or corporate lease –
✅ Non-occupancy charges applicable.
Common Misuse by Housing Societies
Despite clear laws, many housing societies continue to exploit members. Some common illegal practices include:
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Charging 30–40% of rent as non-occupancy charges.
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Demanding fixed lump-sum amounts like ₹10,000 at the time of renewal of rent agreement.
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Passing AGM (Annual General Meeting) resolutions to justify arbitrary charges.
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Harassing members who resist paying unlawful charges by refusing No Objection Certificates (NOCs) for tenants.
These practices are illegal and amount to profiteering.
Real-Life Example
A housing society in Mumbai imposed 37% charges instead of the legal 10%, along with ₹10,000 extra for every 22-month renewal of rent agreements.
When members objected, the society claimed these were decisions passed in the AGM. But as per law:
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Society resolutions cannot override government directives.
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Even a majority decision is void if it contradicts legal provisions.
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Members can challenge such actions before the Deputy Registrar of Co-operative Societies or even in Co-operative Court.
Remedies Available to Members
If your society is overcharging you, here are steps you can take:
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Check the By-laws and Government GR – Keep a copy of the 2001 government directive stating the 10% limit.
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Write to the Society – Politely inform them of the rule and request correction.
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Approach the Deputy Registrar of Co-operative Societies – File a complaint against the society for illegal charges.
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Co-operative Court – If necessary, approach the co-operative court to declare the society’s resolution illegal.
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Consumer Forum – Since unfair charges amount to deficiency in service, you can also approach the consumer forum.
Key Clarifications for Members
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Maintenance Charges Are Always Mandatory – Regardless of whether you live in your flat or not, maintenance charges must be paid. Keeping the flat locked does not exempt you.
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Family Occupancy – If your parents, children, or siblings stay in the flat, it is considered “owner occupancy,” and no non-occupancy charges can be applied.
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Apartment Ownership Act – If your flat is registered under this act, non-occupancy charges do not apply at all.
Frequently Asked Questions (FAQs)
1. Can my society charge more than 10% if members approve it in AGM?
❌ No. Even if 100% of members agree, the law caps it at 10%.
2. What if I do not pay these illegal charges?
You can refuse, but societies may harass you (e.g., refusing services). In such cases, approach the Registrar or Co-operative Court.
3. Can the society ban renting out flats?
❌ No. They can regulate tenant verification but cannot stop you from renting.
4. Are these charges applicable if I give my flat to my cousin?
Depends. If the person falls under the definition of “close relative” in the by-laws, no charges apply. Otherwise, charges may be applicable.
Why Awareness Is Important
Most members are unaware of these rules. Societies take advantage of this ignorance to impose unjustified charges. Knowing the law empowers you to:
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Avoid financial exploitation.
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Ensure fair practices in your society.
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Maintain your right to use your property freely.
Conclusion
Non-Occupancy Charges are a legitimate provision but strictly regulated by law. Housing societies cannot misuse their authority to impose arbitrary or excessive charges. The legal position is clear:
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Maximum permissible charge = 10% of service/maintenance charges.
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Applicable only when the flat is rented to outsiders.
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Not applicable if the flat is vacant or given to family members.
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Any society resolution contrary to law is invalid.
If your society is violating these rules, you have the right to challenge such actions before the Registrar, Co-operative Court, or Consumer Forum.
As a flat owner, remember: Owning and renting out your property is your right. Awareness of the law is your strongest protection.
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