When a flat in a society is rented out or stays vacant, many societies levy non-occupancy charges in addition to regular maintenance fees. This blog unpacks what these charges mean, when they are legal, how they’re calculated (especially in Maharashtra and other states), and how societies and owners can handle disputes smoothly.

What Are Non-Occupancy Charges?

Non-occupancy charges (sometimes called “non-occupancy fee” or “NOC (not to be confused with no-objection certificate)”) are extra levies a housing society imposes on a flat owner when:

• The owner does not reside in the flat.
• The flat is rented to tenants (other than close family).
• The flat remains vacant (depending on the society’s rules).

Legal Framework & State Differences

India does not have a single uniform law for non-occupancy charges. The legal stance varies by state and by whether the society’s by-laws permit it

Maharashtra (The 10% Cap)

In Maharashtra, under Section 79A of the Maharashtra Cooperative Societies Act, societies are permitted to levy non-occupancy charges but cannot exceed 10% of the service charges component of a member’s maintenance bill. This cap was upheld in the Mont Blanc CHS case. Overcharging beyond 10% can be legally challenged and refund of excess amounts is possible.

Other States & No Uniform Standard

In Karnataka, non-occupancy charges lack a clear legal basis and might be considered discriminatory. Tamil Nadu has no explicit provision. In Delhi, Gujarat, Haryana, and UP, some societies adopt the 10% convention, but without legal backing. Societies must follow their registered by-laws.

How to Calculate Non-Occupancy Charges

1. Identify “Service Charge” Component - Only the service charge portion (staff salaries, society office costs, common electricity, etc.) is relevant.
2. Apply the Percentage (usually 10%) - Multiply the service charge by 10%. Example: Rs. 4,000 × 10% = Rs. 400.
3. Ensure It Does Not Exceed Legal / By-law Caps.
4. Add to Monthly Bill (if applicable).

When Non-Occupancy Charges Do Not Apply (Exemptions)

• Owner or immediate family occupying the flat.
• Flat remains locked or vacant (no tenant).
• Short-term guest stay (non-tenants).

Common Disputes & How Committees Can Avoid Them

Dispute Areas

• Imposing NOC when by-laws don’t allow it.
• Charging more than the legal limit (e.g., >10%).
• Arbitrarily classifying flats as “vacant”.
• Not updating tenant declarations or occupancy status.
• Withholding No Dues Certificates due to unpaid non-occupancy charges.

Best Practices for Societies & Committees

• Ensure Non-Occupancy rules are part of registered by-laws.
• Clearly define calculation method and communicate transparently.
• Collect occupancy declarations annually.
• Itemise NOC in bills separately.
• Resolve disputes amicably or via Registrar if needed.

Tips for Flat Owners & Residents

• Review society by-laws for NOC provisions
• Declare occupancy status annually.
• Retain proof of occupancy if exempt.
• Clarify responsibility for NOC in rental agreement.
• Check bills for overcharging.
• Approach Registrar if disputes persist.

Conclusion

Non-occupancy charges are meant to maintain fairness within societies. However, they must comply with by-laws and legal caps. Transparent communication and proper systems reduce conflicts and foster cooperation between residents and management.