Non-occupancy charges: what are they?
Housing societies assess non-occupancy fees when a property is vacant after being hand to the owner by the society or a builder. The reason for this non-residence could be that the apartment is rent out or unoccupy. However, if the property is occupy by the owner’s blood relatives, such as parents or siblings, non-occupancy costs will not be apply in accordance with the bye-laws.
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In a housing society, who is responsible for paying non-occupancy fees?
The non-occupancy fees must be paid by the homeowner who is also a member of the organization. However, if the home owner had the contract written that way, the tenant could be able to pay the non-occupancy fines.
If the apartment is kept empty after ownership or if the landlord or their immediate family does not use the apartment, non-occupancy costs will be assess, per the bylaws.
What conditions must be met in order to impose non-occupancy charges?
As previously state, a non-occupancy charge may be impose in society for a rent or vacant apartment. Every cooperative housing society is able to impose a fee.
- Fees for a vacant flat that are not occupied
- Charges for a rented apartment that are not in use
- Non-occupancy fees for business space
Keep in mind that these fees differ from one state to another. For example, non-occupancy taxes are levied in some jurisdictions, such as Maharashtra, while they have been abolish in others, such as Karnataka, where the state government has issue stringent regulations against the practice.
Who is not subject to the non-occupancy fees?
The owner of the apartment does not have to pay non-occupancy fees if he lives there himself. Members of his immediate family, such as his son, daughter (marry or not), or grandkids, will also not be require to pay non-occupancy fees if they live in the apartment.
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Service charges: what are they?
The wages paid to society personnel, stationary fees, overhead costs, and other expenses are all considered service charges. The non-occupancy charges are made up of this and utility fees, such as energy fees.
What is the maximum amount that societies can charge for non-occupancy?
Arbitrariness was pervasive in the imposition and collection of non-occupancy charges prior to the Maharashtra government capping the amount at 10% of the service charges. Societies will demand outrageous prices for non-occupancy spaces, up to Rs 9 per square foot.
This had the unfavorable effect of raising rental prices and draining non-resident apartment owners of their money. Particularly impacted were non-resident Indians (NRIs), many of whom are enthusiastic real estate investors in India. Examples of extremely unreasonable non-occupancy charges, amounting to several lakh rupees annually, were also emerging.
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How are the non-occupancy charges calculate?
According to a circular released by the Maharashtra government, non-occupancy fees under Section 79A of the Maharashtra Cooperative Societies Act, 1960, cannot be more than 10% of the society’s service fees (not including municipal taxes).
Assume, for instance, that a member’s entire maintenance bill for a society is Rs 3,500, which includes Rs 2,500 in service fees. A non-occupancy charge of Rs 250, or 10% of Rs 2,500, will thereafter be assess by the society.
When it comes to non-occupancy charges, what is illegal?
Apart from the 10% fixed charge, any sum imposed under any other heading is unlawful. In such a situation, the society may face legal action under the Consumer Protection Act for willful carelessness, inadequate services, excessive charges, power abuse, and harassment. When bringing legal action, the lessee must follow the proper processes and provide pertinent documentation.
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What conditions must be met in order to impose non-occupancy charges?
A flat owner is not responsible for non-occupancy fees if he lives in the apartment himself. Members of his immediate family, such as his son, daughter (marry or not), or grandkids, will also not be require to pay non-occupancy fees if they live in the apartment.
What is the maximum amount that societies can charge for non-occupancy?
Arbitrariness was pervasive in the imposition and collection of non-occupancy charges prior to the Maharashtra government capping the amount at 10% of the service charges. Societies will demand outrageous prices for non-occupancy spaces, up to Rs 9 per square foot. This had the unfavorable effect of raising rental prices and draining non-resident apartment owners of their money. Particularly impacted were non-resident Indians (NRIs), many of whom are enthusiastic real estate investors in India. Additionally, instances of incredibly irrational non-occupancy fees that totaled several lakh rupees a year were beginning to surface.
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What occurs if non-occupancy charges are not paid by the apartment owner?
If the apartment owner fails to pay the non-occupancy fees or declines to do so, the housing society will send a reminder notice. If the money is not paid, it may declare the owner in default. Moreover, the no-dues certificate will not be provided by the housing association.
Are the charges for non-occupancy taxable?
No, non-occupancy charges are exempt from income tax under the rules.
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These days, housing societies are only allow to collect non-occupancy fees up to 10% of the monthly maintenance bill’s service charge component. These fees may be assess as soon as the apartment is place on leave and is license, or as soon as it becomes unoccupy. It is advise that a buyer of a resale flat look for any such arrears before making the purchase because the society could refuse to grant the buyer a NOC or demand payment of non-occupancy fees in order for the transaction to fail.
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