🏢 Introduction
In cities like Mumbai, Thane, Navi Mumbai and Pune, thousands of flat owners rent out their properties.
When a flat is given on leave & license or tenancy, societies often levy Non-Occupancy Charges (NOC Charges).
Common questions include:
- How much can society legally charge?
- Can society charge 20% or 25%?
- Is 10% the maximum limit?
- Are family members exempt?
- Can society stop renting?
These charges are governed under Maharashtra Government directives and Model CHS Bye Laws.
This guide explains everything clearly.
1️⃣ What Are Non-Occupancy Charges?
Non-Occupancy Charges are additional charges levied when:
- The flat owner does NOT reside in the flat.
- The flat is rented out to a tenant.
- The flat is given on leave & license.
It is charged because:
- Tenant increases usage of common services.
- Administrative work increases.
- Wear and tear may increase.
However, it cannot be arbitrary.
2️⃣ What Is the Legal Limit in Maharashtra?
As per Government notification:
👉 Maximum 10% of Service Charges
Important:
- 10% applies only on service charges.
- It does NOT apply on total maintenance.
- It does NOT apply on sinking fund.
- It does NOT apply on repair fund.
Example:
If Service Charges = ₹5,000
Maximum Non-Occupancy Charges = ₹500
Many societies wrongly calculate 10% of total maintenance.
That is illegal.
3️⃣ What Are “Service Charges”?
Service charges generally include:
- Security salary
- Lift maintenance
- Common electricity
- Cleaning expenses
- Administrative expenses
It does NOT include:
- Sinking fund
- Repair fund
- Property tax
- Water charges (if separately billed)
Calculation clarity is very important.
4️⃣ Can Society Charge More Than 10%?
No.
Any society charging:
- 15%
- 20%
- 25%
- Flat ₹5,000 rental fee
- Percentage of rent
is violating government directives.
Members can challenge such charges.
5️⃣ When Are Non-Occupancy Charges Not Applicable?
Charges are NOT applicable if flat is occupied by:
- Husband or wife
- Parents
- Children
- Brother or sister
In short: Immediate family members.
Society cannot treat family occupation as rental.
6️⃣ Can Society Ban Renting?
No.
Flat owners have legal right to:
- Rent their property.
- Enter leave & license agreement.
- Earn rental income.
Society cannot:
❌ Impose rental ban
❌ Restrict number of rental units
❌ Demand share of rental income
However, society can:
- Insist on police verification
- Collect tenant details
- Ensure compliance with bye laws
7️⃣ Can Society Charge Tenant Separately?
Society cannot directly charge tenant.
Maintenance and non-occupancy charges are payable by owner.
Owner may recover from tenant contractually.
8️⃣ Security Deposit or Tenant Registration Fee
Society may collect:
- Refundable move-in deposit (if approved)
- Nominal documentation fee
But it must be:
- Reasonable
- Approved in General Body
- Not discriminatory
High arbitrary “tenant entry fee” can be challenged.
9️⃣ Non-Occupancy Charges During Redevelopment
In redevelopment cases:
- Transit rent paid by developer
- Maintenance terms defined in agreement
- Sometimes non-occupancy charges waived
Members must review redevelopment agreement carefully.
🔟 What If Society Charges Excess Non-Occupancy Fees?
Steps:
- Request written breakup of maintenance.
- Verify 10% calculation.
- Raise issue in AGM.
- Submit complaint to Registrar.
- Approach Cooperative Court if needed.
Keep payment receipts.
1️⃣1️⃣ Common Illegal Practices in Mumbai Societies
- Charging ₹3,000–₹10,000 per month flat fee
- Charging percentage of rent
- Charging non-occupancy on total maintenance
- Imposing penalty on tenants
- Restricting rental to “families only”
- Denying lift access to tenants
Such practices violate bye laws.
1️⃣2️⃣ Court View on Non-Occupancy Charges
Courts have consistently held:
- Societies cannot profiteer from rentals.
- 10% cap protects owners.
- Bye laws override arbitrary resolutions.
Any resolution exceeding 10% is invalid.
1️⃣3️⃣ Can Society Increase Service Charges to Indirectly Increase Non-Occupancy?
Some societies increase service charges to indirectly raise 10% amount.
This can be challenged if:
- Increase not justified.
- Budget not approved properly.
- Discriminatory impact observed.
Transparency in budget approval is critical.
📊 Quick Summary Table
| Issue | Legal Position |
|---|---|
| Maximum Non-Occupancy | 10% of Service Charges |
| Based on Total Maintenance? | No |
| Applicable to Family Members | No |
| Rental Ban Allowed? | No |
| % of Rent Allowed? | No |
| Flat Fee Allowed? | No |
❓ Frequently Asked Questions
Can society charge 25% non-occupancy?
No. Maximum is 10% of service charges.
Is it calculated on total maintenance?
No. Only on service charges.
Can society ban bachelors?
Society cannot discriminate arbitrarily.
Can tenant attend AGM?
No. Only member has voting rights.
Is police verification compulsory?
Society can insist for security reasons.
🏁 Conclusion
Non-Occupancy Charges are meant to compensate societies for additional administrative load — not to generate profit.
In Maharashtra:
- Maximum 10% of service charges is allowed.
- Charges beyond this are illegal.
- Renting cannot be banned.
- Family occupation is exempt.
With rental demand high in Mumbai and Thane, awareness of these rules protects flat owners from financial exploitation.
Always verify calculation method before paying excess charges.
Disclaimer: This is not legal advice. Kindly consult a qualified lawyer or legal professional for advice specific to your situation.