From Confusion to Clarity: Simplifying Non-Occupancy Charges

Have you ever wondered what those extra charges on your monthly Housing Society bill are? Non-occupancy charges can be a mystery to many property owners, leading to confusion, frustration, and even legal disputes. Understanding non-occupancy charges is vital for ensuring that you are not paying more than you should.

This blog aims to discuss all the important aspects of non-occupancy charges, including their calculation, criteria, and regulations set by the government.

So, grab a cup of coffee, settle in, and let’s explore everything you need to know about non-occupancy charges!

What are Non-Occupancy Charges?

When a property remains unoccupied despite being in a move-in-ready condition, housing societies may impose a fee called non-occupancy charges or non-occupancy fees (NOC).

These fees are meant to cover maintenance costs, such as lift maintenance, security, common area energy, and amenities upkeep.

Who Pays the Non-Occupancy Charges?

As per the Society Bye-Laws, non-occupancy charges usually come under the purview of the property owner who is also a member of the society. If you own a property in a housing society but don’t reside in it, you are generally responsible for paying these charges.

However, there are certain scenarios where the responsibility of non-occupancy charges can be transferred. As per the terms of a tenancy agreement, if both the landlord (property owner) and the tenant agree, the tenant can be made liable for paying these charges.

This agreement must be mutually agreed upon and explicitly mentioned in the tenancy agreement for it to be enforceable.

When are the Non-Occupancy Charges Not Applicable?

Non-occupancy charges are typically imposed on properties that remain unoccupied, especially when they are sublet.

Nevertheless, there are certain exceptions to this rule. –

• Property owners are exempt from non-occupancy charges if they or their direct family members reside in the property.
• Immediate family members comprise spouses, children (whether unmarried or married), and grandchildren.

How to Calculate the Non-Occupancy Charges?

Non-occupancy charges are calculated differently depending on the location, but they are often based on a percentage of the service fees.

For instance, in Maharashtra, where regulations limit non-occupancy charges to 10% of the service charges, the calculation is relatively simple.

Property owners must pay a percentage of the service fees determined by the housing society.

Suppose the monthly service charges for a housing society in Maharashtra are Rs. 5,000. As per the Maharashtra regulations, non-occupancy charges are limited to 10% of the service charges.

Calculation:

Service Charges: Rs. 5,000 per month

Non-occupancy Charges (10% of service charges): Rs. 500 per month.

How Much Can a Society Charge as Non-Occupancy Charges?

Previously, housing societies had the authority to impose non-occupancy charges arbitrarily, which resulted in conflicts and concerns among property owners.

However, government intervention, especially in Maharashtra, has restricted the amount that societies can charge as non-occupancy fees.

Currently, the highest permissible charge is restricted to 10% of the service fees, ensuring impartiality and preventing exploitation by societies.

Implications of Non-Payment

Here are the consequences of non-payment-

• Reminder Notices: When property owners fail to pay non-occupancy charges on time, housing societies send reminder notices to them.

• Declaration of Default: If the charges remain unpaid despite reminders, the housing society may declare the owner to be in default, indicating a violation of their financial obligations.

• Withholding of No-Dues Certificate: Failure to pay non-occupancy charges may result in the withholding of a no-dues certificate by the housing society.

• Impact on Property Transactions: The withholding of a no-dues certificate can have negative consequences for property transactions and ownership transfers since it serves as a clearance indicating that all financial obligations to society have been fulfilled.

Government Resolution on Non-Occupancy Charges

To address concerns regarding non-occupancy charges, the government has framed resolutions and issued circulars that regulate their imposition and collection.

In Maharashtra, housing cooperatives are governed by the Maharashtra Cooperative Housing Societies Act, 1960, and guidelines for non-occupancy charges are established by circulars issued under Section 79A of the act.

These regulations intend to prevent societies from imposing excessive charges and ensure compliance with legal standards.

Summing Up:

To foster effective property management and a harmonious community, promoting transparency and communication between housing societies and property owners is crucial.

Property owners can avoid potential conflicts and ensure compliance with legal requirements by understanding the criteria for levying the non-occupancy charges, which are an integral part of property ownership, particularly in housing societies.

At Save Max, we prioritize accuracy and reliability in every piece of information we share, making us a trusted source for all your real estate needs. As a leading brokerage company in India, we offer a diverse portfolio of projects and properties across major cities, including Delhi, Gurgaon, Noida, Bangalore, Pune, Kolkata, and Chandigarh.