Maharashtra, India · property

Can a Housing Society Charge More Than 10 Percent Non-Occupancy Charges in Maharashtra?

Under Maharashtra law, a co-operative housing society cannot charge non-occupancy charges exceeding 10% of the basic service charges, regardless of any General Body resolution. Arbitrary per-square-foot rates or percentages of your rental income violate statutory government directives and High Court rulings. Flat owners facing inflated maintenance demands have clear legal avenues to challenge the managing committee.

The 10% Statutory Ceiling Under Maharashtra Law

In Maharashtra, the law strictly caps non-occupancy charges at a maximum of 10% of monthly service charges. Under Section 79A of the Maharashtra Co-operative Societies Act, 1960 (MCS Act), the Government of Maharashtra issued a binding order dated August 1, 2001 (Govt. Order No. SAGRUYO-1094/15165/case No. 317/14-C) mandating that co-operative housing societies cannot levy non-occupancy charges exceeding 10% of service charges, strictly excluding municipal corporation and local property taxes.

Managing committees frequently attempt to bypass this ceiling by passing resolutions in their Annual General Body Meetings (AGM) to collect arbitrary rates, such as fixed monthly fees, charges based on square footage, or a cut of your rental revenue. This practice is illegal. In Mont Blanc Co-operative Housing Society Ltd. v. State of Maharashtra (2007), the Bombay High Court upheld the validity of the August 1, 2001 government directive, ruling that statutory directions under Section 79A override society bye-laws and general body resolutions. Any resolution seeking to levy non-occupancy charges beyond this 10% limit is null and void.

When Non-Occupancy Charges Cannot Be Levied at All

Many managing committees routinely bill non-occupancy charges whenever an owner is not physically residing in the flat, but the law provides specific exemptions. Under the government notification and the Model Bye-Laws of Co-operative Housing Societies in Maharashtra (specifically Bye-Law No. 43), no non-occupancy charges can be levied if the flat is occupied by the member's immediate family.

Immediate family includes the member's spouse, children, parents, brothers, and sisters. If any of these recognized relatives reside in your flat, the society cannot levy non-occupancy charges, even if you reside elsewhere. Furthermore, non-occupancy charges cannot be calculated on statutory components like municipal taxes, water charges, or sinking funds—only on pure service components like security, lift maintenance, and common electricity.

Challenging an Overcharging Managing Committee

Unfair housing society billing often intimidates absentee landlords and NRI owners into paying excessive dues under the threat of penalties or withholding of no-objection certificates (NOCs). You do not have to accept unilateral demands. Managing committees operate under statutory oversight and can be held accountable for non-compliance with the MCS Act.

If your society persists in issuing unlawful bills, you have the right to challenge them formally through a demand notice, make statutory complaints to the local Deputy Registrar of Co-operative Societies, or pursue redressal through the Co-operative Court. You can use Caunsel to research this, save documents in a case, or talk to an independent lawyer to plan your next move.

Steps

• Scrutinize your maintenance bill to extract only the eligible service charges (lift, common electricity, security, administrative expenses), excluding municipal taxes and statutory funds.
• Calculate the legal cap: the maximum permissible non-occupancy charge is precisely 10% of that net service charge component.
• Send a written objection to the society's Secretary and Chairman citing Section 79A of the MCS Act, 1960 and the Bombay High Court ruling in the Mont Blanc case.
• Pay the undisputed maintenance charges along with the 10% capped charge via cheque or online transfer, explicitly noting on record that payment is made 'under protest' against the illegal excess.
• File a formal complaint under the Maharashtra Co-operative Societies Act with the jurisdictional Deputy Registrar of Co-operative Societies if the committee fails to rectify the bill within 15 to 30 days.

Common mistakes

• Stopping all maintenance payments, which allows the committee to label you a defaulter and seek recovery orders under Section 154B-29 of the MCS Act.
• Accepting an AGM resolution as lawful justification for charges exceeding 10%, when court rulings clearly hold that general body resolutions cannot override Section 79A government orders.
• Paying non-occupancy charges when your parents, children, or siblings are residing in the unit.
• Allowing the society to calculate 10% on your tenant's rental agreement amount or on the total maintenance bill inclusive of municipal property tax.

Questions people ask

Can a Maharashtra housing society charge 10% of my monthly rent as non-occupancy charges?

No. Non-occupancy charges are strictly capped at 10% of the society's service charges, not 10% of the rent you receive from your tenant. Linking non-occupancy charges to rental income is illegal.

Do I have to pay non-occupancy charges if my flat is kept locked and vacant?

Yes. If the flat is not occupied by you or your immediate family members, the society is entitled to levy non-occupancy charges, but the levy still cannot exceed 10% of the society's basic service charges.

What if our society's registered bye-laws specify a flat rate of ₹2,000 per month?

The provision is unenforceable. The Bombay High Court in Mont Blanc CHS v. State of Maharashtra held that the government circular issued under Section 79A binds all co-operative housing societies and supersedes conflicting society bye-laws or resolutions.

General information only, last updated 2026-10-16. Caunsel is not a law firm and does not practise law. AI answers and this guide are not legal advice. Verify filings, deadlines, and statutes with a licensed lawyer in Maharashtra, India.