Non-occupancy charges: the limit and who pays
A society may charge a member who has let the flat a non-occupancy charge. The amount is capped by Government.
Key points
- Non-occupancy charges may be levied when a flat is let out, not when the member or the member’s family lives there.
- Under the Government Resolution of 01.08.2001, the charge may not exceed 10% of the service charges, excluding municipal taxes.
- The Bombay High Court has set aside non-occupancy charges levied above the limit.
- Paying guests are dealt with by a separate GR of 25.02.2011.
When the charge applies
A non-occupancy charge is a charge on a member who does not live in the flat and has let it to someone else. It is not payable where the member, or close family members, occupy the flat.
How much
The Government Resolution of 01.08.2001 limits the non-occupancy charge to 10% of the service charges, excluding municipal taxes. A society may not levy a higher charge, and may not calculate it on the rent received or on the area of the flat.
What the courts have said
The Bombay High Court has held that non-occupancy charges in excess of the limit cannot be recovered, in a decision of 07.09.2023 included in the library below.
Paying guests
Where a member keeps paying guests, the GR of 25.02.2011 governs the non-occupancy charges.
Documents
This guide explains the general position in Maharashtra. A society’s bye-laws and the facts of a case can change the answer. Nothing here is legal advice.
Have a question about your society?
Write to the office with a brief description of the matter. Meetings are by prior appointment.